UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD ENDED DECEMBER 31, 2001
COMMISSION FILE NUMBER 1-31215
MeadWestvaco Corporation
(Exact name of registrant as specified in its charter)
Delaware One High Ridge Park (State of incorporation) Stamford, CT 06905 Telephone 203-461-7400 31-1797999 (Address and telephone number of (I.R.S. Employer Identification No.) registrant's principal executive offices) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of each exchange Title of each class on which registered Common Stock- $0.01 par value New York Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange |
At February 28, 2002, the number of shares of common stock outstanding and aggregate market value of voting common stock held by nonaffiliates were 198,808,267 and $7,107,395,545, respectively, determined by multiplying the highest selling price of a common share on the New York Stock Exchange - Composite Transaction Tape on such date times the amount by which the total stock outstanding exceeded the stock beneficially owned by directors and executive officers of the Registrant. Such determination shall not, however, be deemed to be an admission that any person is an "affiliate" as defined in Rule 405 under the Securities Act of 1933.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Proxy Statement for the Annual Meeting of Shareholders scheduled to be held on April 23, 2002, are incorporated by reference in Part III; definitive copies of said Proxy Statement will be filed with the Securities and Exchange Commission (the "SEC") on or before March 29, 2002.
TABLE OF CONTENTS PART I Item Page 1. Business I-1 -------- 2. Properties I-6 ---------- 3. Legal proceedings I-9 ----------------- 4. Submission of matters to a vote of security holders I-11 --------------------------------------------------- PART II 5. Market for the registrant's common stock and related security holder matters II-1 ---------------------------------------------------------------------------- 6. Selected financial data II-2 ----------------------- 7. Management's discussion and analysis of financial condition and results of operations II-3 ------------------------------------------------------------------------------------- 7A. Quantitative and qualitative disclosures about market risk II-3 ---------------------------------------------------------- 8. Financial statements and supplementary data II-3 ------------------------------------------- 9. Changes in and disagreements with accountants on accounting and financial disclosure II-3 ------------------------------------------------------------------------------------ PART III 10. Directors and executive officers of the registrant III-1 -------------------------------------------------- 11. Executive compensation III-1 ---------------------- 12. Security ownership of certain beneficial owners and management III-1 -------------------------------------------------------------- 13. Certain relationships and related transactions III-1 ---------------------------------------------- PART IV 14. Exhibits, financial statement schedules and reports on Form 8-K IV-1 --------------------------------------------------------------- |
Introduction
MeadWestvaco was formed on January 29, 2002, as a result of the merger of equals of The Mead Corporation and Westvaco Corporation. Because for accounting purposes the merger is treated as an acquisition of Mead by Westvaco, the historical financial statements of Westvaco become the historical financial statements of MeadWestvaco. Accordingly, the financial results included in this report are the financial results of Westvaco. Additionally, because Westvaco changed its fiscal year from a fiscal year ending October 31, to a fiscal year ending December 31, the period covered by this report is the two-month period ending December 31, 2001 (the "Transition Period").
The businesses of Westvaco and Mead have been combined as a result of the merger. However, because this Transition Report covers the financial results of Westvaco corporation for this two month Transition Period, in addition to presenting business and other information concerning MeadWestvaco, this Transition Report presents some of this information for Westvaco and Mead separately. Future reports will include the business of MeadWestvaco on a combined basis from the date of the merger.
Part I
Item 1. Business
General
MeadWestvaco Corporation is a Delaware corporation formed for the purpose of
consummating the business combination of The Mead Corporation and Westvaco
Corporation. The business combination was consummated on January 29, 2002.
MeadWestvaco's business consists exclusively of the businesses of Mead and
Westvaco. Unless otherwise indicated or the context otherwise requires, the term
"MeadWestvaco" refers to MeadWestvaco Corporation and its consolidated
subsidiaries, including Mead and Westvaco, and the terms "Mead" and "Westvaco"
refer to The Mead Corporation and Westvaco Corporation, respectively, in each
case together with their consolidated subsidiaries. Because for accounting
purposes the merger is treated as an acquisition, effective January 29, 2002, of
Mead by Westvaco, the historical financial statements of Westvaco become the
consolidated financial statements of MeadWestvaco, the registrant. The
historical financial information contained herein reflects periods prior to the
merger of Mead and Westvaco and as such do not reflect accounting for the
business combination.
Westvaco changed its fiscal year-end from October 31, to December 31 and MeadWestvaco has a December 31 year end. This report covers the two-month period ended December 31, 2001 (the "Transition Period"). The Transition Period results do not necessarily reflect results for a full year.
Information concerning Mead's financial results for the twelve-month period ended December 31, 2001, is contained in MeadWestvaco's Current Report on Form 8-K/A filed with the Securities and Exchange Commission on March 8, 2002.
Westvaco, a Delaware corporation, was incorporated in 1899 as West Virginia Pulp and Paper Company. Westvaco's historical business has been as a producer of packaging, paper and specialty chemicals. Westvaco has served customers in more than 70 countries with operations in the United States, Brazil, Europe and Asia. Westvaco has produced paper and paperboard to convert into a variety of packaging products. Westvaco has also been a leading global supplier of premium packaging for consumer products markets.
Mead, an Ohio corporation, was incorporated in 1930 as the outgrowth of a paper manufacturing business founded in 1846. Mead's historical business has been as a producer of paper, packaging systems, pulp, paperboard, lumber and other wood products. Mead also has manufactured and distributed consumer and office supplies including time management products. Mead has served customers in approximately 100 countries with operations in the United States, Canada, Latin America, Europe and Asia.
Business segments
MeadWestvaco's principal business segments on a combined basis are (1) packaging
products, (2) coated and specialty papers, (3) consumer and office products and
(4) specialty chemicals. While the forest resources operations represent a
segment of MeadWestvaco's business, it does not meet the threshold to be
reported separately.
Westvaco's principal business segments have been the manufacture of (1) packaging products, (2) paper products, and (3) chemicals. A more detailed description of Westvaco's segments, including financial information, is contained in Note S to the consolidated financial statements included in the MeadWestvaco 2001 Financial Report to Shareholders, and is incorporated herein by reference.
Mead's principal business segments have been the manufacture of (1) paper, (2) packaging and paperboard, and (3) consumer and office products. A more detailed description of Mead's segments, including financial information, is contained in Note T to the consolidated financial statements for Mead for the twelve-month period ended December 31, 2001, as included in MeadWestvaco's Current Report on Form 8-K/A filed with the Securities and Exchange Commission on March 8, 2002.
Marketing and distribution
The principal markets for MeadWestvaco's products are in the United States,
Canada, Latin America, Europe and Asia. MeadWestvaco operates in 33 countries
and serves customers in approximately 100 nations. MeadWestvaco expects to
continue to utilize marketing and distribution methods of Westvaco and Mead to
serve the combined business while conducting a review of these methods as part
of the company's overall integration efforts.
The principal markets for Westvaco's products have been in the United States, Brazil, Europe and Asia. Substantially all products have been sold through Westvaco's own sales force. The principal markets for Mead's products have been in the United States, Canada, Latin America, Europe and Asia. Mead's products have been sold through a mixture of its own sales force and through paper merchants and distributors. Each company has maintained sales offices in key cities for their respective markets throughout the world.
Forest resources
The principal raw material used in the manufacture of paper, paperboard and pulp
is wood. MeadWestvaco's strategy, based on the location of its mills and the
composition of surrounding forestland ownership, is to provide a portion of its
wood fiber from company-owned land and to rely on private woodland owners and
private contractors and suppliers for the balance. MeadWestvaco owns
approximately 3.5 million acres of forests worldwide. As part of MeadWestvaco's
strategic review of its timberlands holdings, the company expects to reduce its
U.S. land base over the next several years, disposing of parcels which are not
strategically significant to the company due to their location in areas where
the company otherwise has sufficient appropriate supply for its mills.
MeadWestvaco expects to continue to obtain most of its wood requirements from company owned or controlled timberlands, from private woodland owners and private contractors or suppliers, including participants in the company's Cooperate Forest Management Program (CFM) which provides an additional source of wood fiber from acreage owned by participating landowners and managed with assistance from company foresters. The company believes that these sources will be able to adequately supply the company's needs. Additionally, the company has the capacity to supply all of the wood for its Brazilian mill from company plantations.
As of December 31, 2001, Westvaco owned 1,378,000 acres of forestland with approximately 1,068,000 in the South and Middle Atlantic United States, 190,000 acres in the Central United States and approximately 120,000 acres in southern Brazil (more than 2,000 miles from the Amazon rainforests). As of December 31, 2001, Mead owned or controlled approximately 2,087,000 acres of timberlands in the United States, with approximately 820,000 acres in the Midwest, 660,000 in the Northeast and 607,000 acres in the South.
Patents
MeadWestvaco has a large number of foreign and domestic trademarks, trade names,
patents, patent rights and licenses relating to its business. While, in the
aggregate, intellectual property rights are material to MeadWestvaco's business,
the loss of any one or any related group of such rights would not have a
material adverse effect on the business of MeadWestvaco, with the exception of
the "Mead(R)" mark for consumer and office products.
Competition
MeadWestvaco operates in very competitive domestic and foreign markets,
competing with many large, well-established and highly competitive manufacturers
and service providers. In addition, the company's business is affected by a
range of macroeconomic conditions, such as: industry capacity; industry
consolidations; global competition; economic growth in the U.S. and abroad; and
currency exchange rates.
The company competes principally through quality; value-added products and services (packaging solutions); customer service; innovation; technology; and product design and price. The company's proprietary trademarks and patents are also important to the company's competitive position in certain markets.
Research
MeadWestvaco's research and development efforts are primarily focused on
increased timber and fiber production on a sustainable basis, as well as new
product innovation and process enhancements.
Environmental Laws and Regulations
MeadWestvaco's operations are subject to extensive regulation by federal, state
& local authorities, as well as regulatory authorities with jurisdiction over
foreign operations of the company. These regulations impose effluent and
emission limitations, waste disposal and other requirements upon the operations
of the company, and require the company to obtain and operate in compliance with
the conditions of permits and similar authorizations from the appropriate
governmental authorities. Through its operating subsidiaries, MeadWestvaco has
obtained, has applications pending, or is making application for such permits
and authorizations. MeadWestvaco does not anticipate that compliance with such
statutes and regulations will have a material adverse effect on its competitive
position or its overall business. MeadWestvaco's competitors are subject to the
same statutes and regulations, and while individual regulatory programs may
impact competitors somewhat differently, MeadWestvaco expects that in the
aggregate these statutes and regulations affect competitors to a relatively
similar degree.
Environmental expenditures in the future are anticipated to include long-term projects for maintenance and upgrade of wastewater treatment plants, process modifications and air emission controls. Due to changes in environmental laws and regulations, the application of such laws and regulations and changes in environmental control technology, it is not possible for MeadWestvaco to predict with certainty the amount of capital expenditures to be incurred for environmental purposes. Taking these uncertainties into account, MeadWestvaco estimates that it may incur approximately $40 million in expenditures for Westvaco facilities for the year ending December 31, 2002, and approximately $22 million in expenditures over the next three calendar years for Mead facilities.
A portion of anticipated future environmental capital expenditures of MeadWestvaco will concern compliance with regulations promulgated under the Clean Air Act and Clean Water Act (the "Cluster Rules") designed to reduce air and water discharges of specific substances from U.S. pulp and paper mills by 2006. MeadWestvaco has taken major steps to comply with the Cluster Rules which require new and existing integrated pulp and paper mills to install control devices to limit the release of certain pollutants into the air and water. MeadWestvaco expects to incur additional capital expenditures of approximately $80 million over the next five years to comply with the Cluster Rules. Additional operating expenses will be incurred as capital installations required by the Cluster Rules are put into service. Environmental organizations are challenging the Cluster Rules in the U.S. Court of Appeals. MeadWestvaco and other companies are participating in the litigation which could result in additional compliance costs in excess of $150 million over several years if the legal challenge by these environmental organizations is successful.
In 1999, the United States Environmental Protection Agency (the "EPA") announced its intention to emphasize enforcement of the Clean Air Act's major source air permitting program. The Agency identified certain industries on which it intended to focus, including the pulp and paper industry. During 1999 and 2000, EPA issued Notices of Violation against eight companies, including Westvaco, with kraft pulp mills in Maryland, Pennsylvania, Virginia, West Virginia and Wisconsin, alleging various violations of the Clean Air Act Prevention of Significant Deterioration ("PSD") dating back to the late 1970s and early 1980s. Subsequently, EPA proceeded to file suit in Federal District Court against Westvaco (see Part I, Item 3, "Legal Proceedings"). To MeadWestvaco's knowledge, none of these enforcement matters against pulp and paper companies have been settled or resolved. In 1999 and 2000, Mead received multiple requests for information (pursuant to Section 114 of the Clean Air Act) from EPA concerning Mead's kraft pulp mills in Chillicothe, Ohio, Rumford, Maine, Phenix City, Alabama and Escanaba, Michigan. Mead has responded to all of the requests and MeadWestvaco is continuing to cooperate with EPA. Mead did not receive any Notices of Violations or other claims relating to these matters.
The EPA has undertaken several initiatives to reduce ozone-causing pollutants from large utility and industrial sources in the Midwest, including a call for states to adopt more stringent emission controls on all or some of the sources within their boundaries (the "NOx SIP Call") and the promulgation of new federal emission standards that may be applied to specific identified sources in the affected states. Alabama, Michigan and Ohio are among the states affected by these EPA initiatives. MeadWestvaco has developed plans for compliance with the applicable federal programs and the Alabama, Michigan and Ohio programs, and does not expect that any significant capital expenditures beyond the expenditures stated above for the Mead facilities will be necessary in the next three years to assure compliance. MeadWestvaco also expects capital expenditures in the range of $15-20 million will be required to install additional controls on facilities located in Kentucky, Maryland and Virginia by 2004. Estimated expenditures assume the technology identified by the EPA is capable of achieving the NOx reductions projected by the EPA, which MeadWestvaco has not independently confirmed.
Mead and Westvaco have been notified by the EPA or by various state or local governments that they may be liable under federal environmental laws or under applicable state or local laws with respect to the cleanup of hazardous substances at sites currently operated or used by each company. Mead and Westvaco are also currently named as a potentially responsible party ("PRP"), or have received third party requests for contribution under federal, state or local laws with respect to at least 20 sites. Some of these proceedings are described in more detail in Part I, Item 3, "Legal Proceedings." There are other sites which may contain contamination or which may be potential Superfund sites but for which MeadWestvaco has not received any notice or claim. The potential liability for all these sites will depend upon several factors, including the extent of contamination, the method of remediation, insurance coverage and contribution by other PRPs. Although the costs associated with remediation of all these sites are not certain at this time, MeadWestvaco has established reserves of approximately $57 million relating to current environmental litigation and proceedings which it believes are probable and reasonably estimable. These reserves were established after considering the number of other PRPs, their ability to pay their portion of the costs, Mead's or Westvaco's relative contribution to the site, and other factors. Expenses to be charged to this reserve are not included in the anticipated capital expenditures for the next three years stated above. MeadWestvaco believes that it is reasonably possible that costs associated with these sites may exceed current reserves by amounts that may prove insignificant or by as much as approximately $40 million. This estimate of the range of reasonably possible additional costs is less certain than the estimate upon which reserves are based.
Additional matters involving environmental proceedings for MeadWestvaco are set forth in Part I, Item 3, "Legal proceedings".
Employees
MeadWestvaco employs approximately 32,500 people worldwide, of which 25,300 are employed in the United States and 7,200 are employed internationally. Of this group, approximately 16,400 employees are represented by various labor unions under collective bargaining agreements. Additionally, most of MeadWestvaco's European facilities have separate house union agreements or series of agreements specific to the workforce at such facility.
International operations
MeadWestvaco's operations outside the United States are conducted through subsidiaries located in Canada, South America, Latin America, Europe and Asia. While there are risks inherent in foreign investments, MeadWestvaco does not believe at this time that such risks are material to its overall business prospects.
Westvaco's sales that were attributable to domestic operations were 85% during the Transition Period, 89% in the fiscal year ended October 31, 2001, and 94% in the fiscal years ended October 31, 2000 and 1999. Westvaco's sales that were attributable to foreign operations were 15% during the Transition Period, 11% in fiscal year 2001, 6% in fiscal years 2000 and 1999. Export sales from Westvaco's U.S. operations made up approximately 15% during the Transition Period and 14%, 15% and 17% of Westvaco's fiscal year sales in 2001, 2000 and 1999, respectively. For more information about domestic and foreign operations, see Note S to the consolidated financial statements, included in the MeadWestvaco 2001 Financial Report to Shareholders, incorporated herein by reference.
Item 2. Properties
MeadWestvaco is headquartered in Stamford, Connecticut, and maintains a significant corporate and operational presence in Dayton, Ohio. MeadWestvaco considers that its facilities have sufficient capacity to meet current production requirements. For information concerning the company's timberlands, see Part I, Item 1, "Business". The location of MeadWestvaco's production facilities are as follows:
Packaging --------- Paperboard mills Cottonton, Alabama Covington, Virginia Evadale, Texas North Charleston, South Carolina Stevenson, Alabama Tres Barras, Santa Catarina, Brazil Valinhos, Sao Paulo, Brazil Extrusion and sheeting plants Low Moor, Virginia Silsbee, Texas Venlo, The Netherlands Consumer packaging plants Berkshire, United Kingdom Birmingham, United Kingdom Bydgoszcz, Poland Caguas, Puerto Rico (Leased) Chatham, New Jersey Cleveland, Tennessee Corby, United Kingdom Crimmitschau, Germany Dresden, Germany Dublin, Ireland (Leased) Enschede, The Netherlands Franklin Park, Illinois (Leased) Freden, Germany Garner, North Carolina Graz, Austria Greenville, Mississippi Grover, North Carolina Haarlem, The Netherlands Jacksonville, Illinois Kearny, New Jersey Krakow, Poland Littlehampton, United Kingdom (Leased) London, United Kingdom (Leased) Louisa, Virginia (Leased) Louisville, Kentucky Mebane, North Carolina Melrose Park, Illinois (Leased) Newark, Delaware Norwich, Connecticut Pittsfield, Massachusetts (Leased) Richmond, Virginia Salzburg, Austria (Leased) Slough, United Kingdom Svitavy, Czech Republic Swindon, United Kingdom (Leased) Uden, The Netherlands (Leased) Valinhos, Sao Paulo, Brazil Warrington, Pennsylvania (Leased) Wiltshire, United Kingdom Lumber product plants Cottonton, Alabama Greenville, Georgia Stevenson, Alabama Summerville, South Carolina |
Corrugated container plants Blumenau, Santa Catarina, Brazil Bridgeview, Illinois Covington, Georgia Fort Smith, Arkansas Lewisburg, Tennessee Manaus, Amazonas, Brazil Milwaukee, Wisconsin Pacajus, Ceara, Brazil Spartanburg, South Carolina Valinhos, Sao Paulo, Brazil Washington Court House, Ohio Multiple packaging systems plants Ajax, Ontario, Canada Atlanta, Georgia Bilboa, Spain Borghetto, Italy Bristol, United Kingdom Buena Park, California Chateauroux, France Chicago, Illinois Deols, France Lanett, Alabama Osaka, Japan Roosendaal, The Netherlands Shimada, Japan Smyrna, Georgia Trier, Germany Coated & Specialty Papers ------------------------- Paper mills Chillicothe, Ohio County Devon, United Kingdom Escanaba, Michigan Luke, Maryland Potsdam, New York Rumford, Maine South Lee, Masachussetts Wickliffe, Kentucky Carbonless converting plant Freemont Ohio Consumer & Office Products -------------------------- Plants and distribution centers Alexandria, Pennsylvania Front Royal, Virginia Garden Grove, California Garland, Texas Mexico City, Mexico Nuevo Laredo, Mexico Sidney, New York St. Joseph, Missouri Toronto, Ontario, Canada |
Envelope plants and print centers Atlanta, Georgia Bethlehem, Pennsylvania Charlotte, North Carolina Cleveland, Ohio Dallas, Texas Danville, Illinois Denver, Colorado Enfield, Connecticut Indianapolis, Indiana Kenosha, Wisconsin Los Angeles, California Springfield, Massachusetts Tampa, Florida Williamsburg, Pennsylvania Worcester, Massachusetts Specialty Chemicals ------------------- Covington, Virginia DeRidder, Louisiana North Charleston, South Carolina Wickliffe, Kentucky Forestry centers ---------------- Chillicothe, Ohio Escanaba, Michigan Phenix City, Alabama Rumford, Maine Rupert, West Virginia Stevenson, Alabama Summerville, South Carolina Tres Barras, Santa Catarina, Brazil Wickliffe, Kentucky Research facilities ------------------- Chillicothe, Ohio Laurel, Maryland North Charleston, South Carolina |
Leases
See Note L to the consolidated financial statements, included in the MeadWestvaco 2001 Financial Report to Shareholders, and incorporated herein by reference, for financial data on certain Westvaco leases.
Other information
A limited number of MeadWestvaco facilities are owned, in whole or in part, by municipal or other public authorities pursuant to standard industrial revenue bond financing arrangements and are accounted for as property owned by MeadWestvaco. MeadWestvaco holds options under which it may purchase each of these facilities from such authorities by paying a nominal purchase price and assuming the indebtedness of the industrial revenue bonds at the time of the purchase.
With the exception of certain warehouses and general offices, MeadWestvaco owns in fee all of the facilities listed above, except where noted, and except pending purchases. The property accompanied by an asterisk has lease arrangement in respect of air, water and solid waste pollution control systems and equipment.
Item 3. Legal proceedings
The Cluster Rules' regulations, issued by EPA in April 1998, established new requirements regarding air emissions and wastewater discharges from pulp and paper mills to be met by the year 2006. See Part I, Item 1, "Business - Environmental Laws and Regulations". Environmental organizations are challenging the Cluster Rules in the U.S. Court of Appeals. MeadWestvaco and other companies are participating in the litigation which could result in additional compliance costs in excess of $150 million over several years if the legal challenge by these environmental organizations is successful.
In 1998 and 1999, the EPA issued Notices of Violation to eight paper industry facilities, including Westvaco's Luke, MD, mill, alleging violation of EPA's Prevention of Significant Deterioration (PSD) regulations under the Clean Air Act requiring permitting and emissions evaluation prior to industrial expansion. On August 28, 2000, an enforcement action in Federal District Court in Maryland was brought against Westvaco which charges these violations and addresses capital projects at the mill carried out in the 1980s. The action alleges that Westvaco did not obtain PSD permits or install required pollution controls, and sought penalties of $27,500 per day for each claimed violation together with the installation of control equipment. MeadWestvaco strongly disagrees with EPA's allegations of Clean Air Act violations by Westvaco and is vigorously defending this action. On April 23, 2001, the Court granted Westvaco's Motion for Partial Dismissal and dismissed the EPA's claims for civil penalties under the major counts of the complaint. The Court held that these significant penalties were barred by the applicable statute of limitations.
On March 6, 1991, Beazer East Inc. ("Beazer") sued Mead in the United States District Court for the Western District of Pennsylvania alleging liability for certain past and future environmental remediation costs incurred by Beazer at the former Mead Woodward Facility located in Dolomite, Alabama. In March 2000, the court entered an allocation order establishing Mead's share of recoverable costs at 67.5%. A trial of all remaining issues was held in February 2002, and the parties are awaiting a decision from the court. The allocation order cannot be appealed until the trial litigation is concluded. Although the extent of contamination and the method of remediation to be required are not known at this time, based on information currently available, after considering established reserves and rights to contribution, MeadWestvaco does not expect this proceeding will have a material adverse effect on the financial condition, liquidity or results of operations of the company.
In June 1996, EPA announced plans to undertake an interim removal action
involving the excavation and treatment/disposal of bulk tar deposits located in
or near the Chattanooga Creek and certain waste piles located near a closed Mead
manufacturing facility located in Chattanooga, Tennessee (the "Coke Plant
Site"). Costs of the proposed removal action were estimated by EPA at the time
to be approximately $5.1 million. In July 1996, several PRPs, including Mead and
the U.S. Department of Defense, received special notice letters from EPA
advising them of their potential liability for the removal action. In December
1996, EPA issued Unilateral Administrative Orders under Section 106 of CERCLA to
Mead and two other private parties. In January 1997, Mead indicated its intent
to not comply with the Section 106 Order. Preliminary analyses by EPA have
indicated that dumping in Chattanooga Creek occurred when the coke plant was
doubled in size to meet World War II government requirements. A party who,
without sufficient cause, refuses to comply with an order issued under Section
106 of CERCLA may be subject to fines of up to $27,500 per day and punitive
damages in an amount up to three times the costs incurred by the EPA as a result
of the failure to comply with such order. MeadWestvaco believes, based on its
review of the facts and the law applicable to the matter, including the absence
of findings by the EPA, that Mead had sufficient cause not to comply with the
Section 106 Order.
However, if the EPA decides to bring an enforcement action against Mead as a result of its failure to comply with the 106 Order, there can be no assurance as to the outcome of such action. EPA completed the removal action in November, 1998 and issued a Final Action Report in 1999. More contamination than expected was excavated. In a January 2000 letter, EPA indicated that the cost of the removal action was approximately $13 million and the EPA would seek recovery of these costs from the PRPs. During 2001, EPA and the PRPs commenced settlement discussions concerning the removal action. The January 2000 letter and subsequent settlement discussions do not address future remediation costs; however, EPA issued a draft Feasibility Study in 1999 that estimated future costs to complete the remediation of Chattanooga Creek in the range of $6.3 million to $12.6 million. Based on information currently available, after considering established reserves and rights to contribution, MeadWestvaco does not expect this proceeding will have a material adverse effect on the financial condition, liquidity or results of operations of the company.
In August 1997, Mead filed a Complaint in the Circuit Court for Jefferson County, Alabama (Case No. CV9705117) against a number of insurance companies who had provided insurance to the Woodward Iron Company and/or Mead facilities operated under the former Industrial Products division. The Complaint seeks a declaratory judgment and damages for the insurers' failure to provide a defense and coverage for claims in Beazer East Inc., the Coke Plant Site and Chattanooga Creek proceedings. This case is being pursued and is currently in the discovery phase.
In 1999, Mead received notice from the Rock-Tenn Company of a demand from the Michigan Department of Environmental Quality ("MDEQ") concerning Rock-Tenn's Otsego, Michigan mill property. In the notice to Rock-Tenn, MDEQ referred to potential liability under federal and state environmental laws for certain discharges to the Kalamazoo River, including discharges of polychlorinated biphenyls ("PCBs"), and for environmental response actions that have been or may be undertaken at the Allied Paper, Inc./Portage Creek/Kalamazoo River Superfund Site or the Otsego mill property because of the presence of PCBs. Mead sold the Otsego mill and other assets to Rock-Tenn in 1987. Rock-Tenn alleges Mead is legally responsible for the presence of PCBs at the Otsego mill and that Rock-Tenn is entitled to indemnification from Mead for all costs and liabilities associated with the presence or discharge of PCBs. MeadWestvaco disputes Rock-Tenn's allegations and legal conclusions concerning Mead's responsibility, based in part on Rock-Tenn's operations at the Otsego mill since 1987. Based on information currently available, after considering established reserves and rights to contribution, MeadWestvaco does not expect these proceedings will have a material adverse effect on the financial condition, liquidity or results of operations of the company.
In 1999, Mead received notice from the Maine Department of Environmental Protection ("MDEP") that it was seeking an investigation and possible remediation of certain solid waste management areas at Mead's Rumford, Maine mill, including areas that may be a source of mercury contamination. Prior to Mead's acquisition of the mill in November 1996, a chlor-alkali facility using mercury operated on portions of the property. Mead has engaged in discussions with the MDEP concerning the scope and nature of any required investigation and/or remediation, and during 2001 reached agreement on initial investigation efforts to be undertaken by Mead. Based on information currently available, after considering rights to contribution, MeadWestvaco does not expect this proceeding will have a material adverse effect on the financial condition, liquidity or results of operations of the company.
Mead established reserves of approximately $40 million relating to the aforementioned proceedings. Such reserves will be considered by Westvaco in its acquisition accounting for the merger.
Additional information is included in Part I, Item 1, "Business--Environmental Laws and Regulations," and Note R to the consolidated financial statements included in the MeadWestvaco 2001 Financial Report to Shareholders incorporated herein by reference.
MeadWestvaco is involved in various other litigation and administrative proceedings arising in the normal course of business. Although the ultimate outcome of such matters cannot be predicted with certainty, management does not believe that the currently expected outcome of any proceeding, lawsuit or claim that is pending or threatened, or all of them combined, will have a material adverse effect on its consolidated financial position, liquidity or results of operation.
Item 4. Submission of matters to a vote of security holders
There were no matters submitted to a vote of security holders of MeadWestvaco, Westvaco or Mead, through the solicitation of proxies or otherwise, during the Transition Period.
Executive officers of the registrant
The following table sets forth certain information concerning the executive officers of MeadWestvaco:
Year in which service in present Name Age Present position Position began ---- --- ---------------- -------------- Jerome F. Tatar* 55 Chairman 2002 John A. Luke, Jr.* 53 President and Chief Executive Officer 2002 James A. Buzzard 47 Executive Vice President 2002 Raymond W. Lane 53 Executive Vice President 2002 Ian W. Millar 51 Executive Vice President 2002 Richard H. Block 61 Senior Vice President 2002 Rita V. Foley 48 Senior Vice President 2002 Cynthia A. Niekamp 42 Senior Vice President 2002 Karen R. Osar 52 Senior Vice President and Chief Financial Officer 2002 Linda V. Schreiner 42 Senior Vice President 2002 Mark T. Watkins 48 Senior Vice President 2002 Wendell L. Willkie, II 50 Senior Vice President and General Counsel 2002 John W. Hetherington 63 Vice President and Secretary 2002 Ned W. Massee 51 Vice President 2002 Barbara L. Brasier 43 Treasurer 2002 John E. Banu 54 Comptroller 2002 |
*Director of MeadWestvaco
MeadWestvaco's officers are elected by the Board of Directors annually for
one-year terms. Prior to the merger of Mead and Westvaco, the executive officers
served in the following capacities: Jerome F. Tatar, Chairman of the Board,
Chief Executive Officer and President of Mead since 1997, President and Chief
Operating Officer since 1996; John A. Luke, Jr., Chairman of the Board, Chief
Executive Officer and President of Westvaco since 1996, President and Chief
Executive Officer since 1992; James A. Buzzard, Executive Vice President of
Westvaco since 2000, Senior Vice President, 1999, Vice President, 1992-1999;
Raymond W. Lane, Executive Vice President of Mead since 1996, Vice President,
1994-1996; Ian W. Miller, Executive Vice President since 2001 and President of
the Mead Paper Division since 1998 and President of the Mead Packaging Division
1998-1993; Richard H. Block, Senior Vice President of Westvaco since 2000,
President and Chief Executive Officer of IMPAC Group, Inc., 1998-2000, President
and Chief Executive Officer of AGI Inc., 1987-1998; Rita V. Foley, Senior Vice
President of Westvaco since 1999, Independent Consultant, 1998-1999, Executive
Vice President Sales and Marketing, QAD, Inc., 1997-1998, Vice President,
Digital Equipment Corporation, 1994-1997; Cynthia A. Niekamp, President of the
Mead Specialty Paper Division since 1998, Vice President, 1995; Karen R. Osar,
Senior Vice President and Chief Financial Officer of Westvaco since 1999, Vice
President and Treasurer of Tenneco Inc., 1994-1999; Linda V. Schreiner, Senior
Vice President of Westvaco since 2000, Manager of Strategic Leadership
Development, 1999-2000, Senior Manager of Arthur D. Little, Inc., 1998-1999,
Vice President of Signet Banking Corporation, 1988-1998; Mark T. Watkins, Vice
President of Mead since 2000, Vice President, Human Resources and Organizational
Development of the Mead Paper Division, 1999, Vice President, Michigan
Operations of Mead Paper Division, 1997; Wendell L. Willkie, II, Senior Vice
President and General Counsel of Westvaco since 1996; John W. Hetherington, Vice
President, Assistant General Counsel and Secretary of Westvaco since 1987; Ned
W. Massee, Vice President of Westvaco since 1991; Barbara L. Brasier, President
of Mead's Gilbert Paper since 2000; John E. Banu, Vice President of Westvaco
since 1999, Comptroller 1995-1999.
Part II
Item 5. Market for the registrant's common stock and related security holder
matters
(a) Market and price range of common stock
MeadWestvaco's stock is traded on the New York Stock Exchange under the symbol MWV. Westvaco's common stock was traded on the New York, Chicago and Pacific Stock Exchanges under the symbol W. The New York Stock Exchange was the principal market on which the common stock was traded.
Transition Period Fiscal year ended October 31 ------------------------------------------------------------------------------------ STOCK PRICES Ended 12/31/01 2001 2000 --------------------------------------------------------- -------------------------- High Low High Low High Low Transition Period $29.70 $24.20 First $30.63 $25.00 $34.75 $26.00 Second 27.65 22.70 34.50 25.63 Third 27.60 23.15 34.75 24.44 Fourth 32.10 22.68 29.94 24.06 This table reflects the range of market prices of Westvaco common stock as quoted in the New York Stock Exchange Composite Transactions. The New York Stock Exchange was the principal market in which the securities were traded. |
(b) Approximate number of common shareholders
At December 31, 2001, the number of shareholders of record of Westvaco common stock was approximately 18,920. This number included 12,629 current or former employees of the company who were Westvaco shareholders by virtue of their participation in the company's savings and investment plans.
(c) Dividends
MeadWestvaco has announced an annualized dividend rate of $0.92 per share, subject to approval by the company's Board of Directors from time to time after consideration of such matters as the Board of Directors deems appropriate.
The following table reflects historical dividend information for Westvaco for the periods indicated.
DIVIDENDS PER SHARE Transition Period Fiscal year ended October 31 Ended 12/31/01 2001 2000 Transition Period $.22 First $.22 $.22 Second .22 .22 Third .22 .22 Fourth .22 .22 Year $.88 $.88 |
II-2
Item 6. Selected financial data
Two- months Year ended October 31 ended --------------------- 12/31/01 2001 2000 1999 1998 1997 EARNINGS In millions, except per share data Sales $603 $3,935 $3,857 $2,953 $3,050 $3,152 Net income [loss] before extraordinary charge and cumulative effect of accounting changes (22) 88 255 111 132 163 Net income [loss] (22) 88 /1/ 246 /2/ 111 /3/ 132 /4/ 163 Net income [loss] per share - basic (0.21) 0.87 2.44 1.11 1.30 1.60 Net income [loss] per share - diluted (0.21) 0.87 2.44 1.11 1.30 1.58 Depreciation and amortization 61 347 314 280 281 269 COMMON STOCK Number of common shareholders 18,920 19,070 19,000 19,070 20,140 20,240 Weighted average number of shares outstanding Basic 102 101 101 100 101 102 Diluted 103 102 101 100 102 103 Cash dividends $23 $89 $88 $88 $89 $90 Per share: Dividends 0.22 0.88 0.88 0.88 0.88 0.88 Book value 22.58 22.86 23.17 21.65 22.39 22.35 FINANCIAL POSITION In millions Working capital $308 $315 $497 $313 $272 $400 Current ratio 1.4 1.4 1.9 1.7 1.6 2.0 Plant and timberlands, net $4,236 $4,227 $4,197 $3,581 $3,802 $3,684 Total assets 6,828 6,787 6,570 4,897 5,009 4,899 Long-term debt 2,697 2,660 2,687 1,427 1,456 1,449 Shareholders' equity 2,315 2,341 2,333 2,171 2,246 2,279 Debt to total capital 46% 46% 46% 33% 34% 33% OPERATIONS Primary production of paper, paperboard and market pulp [tons, in thousands] 553 3,641 3,749 2,992 3,028 3,058 New investment in plant and Timberlands [in millions] $56 $296 $212 $232 $420 $614 Acres of timberlands owned [in thousands] 1,378 1,378 1,418 1,446 1,465 1,461 Employees 17,410 17,530 17,050 12,750 13,070 13,370 |
II-3
/1/ 2001 results include a net after-tax restructuring charge of $35.2 million, or $.35 per share, a credit of $11.5 million, or $.11 per share, for tax benefits related to audits and other adjustments, and an after-tax gain of $3.2 million, or $.03 per share, from the sale of a lease.
/2/ 2000 results include a net after-tax restructuring charge of $11.2 million, or $.11 per share, an after-tax extraordinary charge of $8.8 million, or $.09 per share, for the extinguishment of higher interest rate debt and a gain of $3.6 million, or $.04 per share, from the sale of assets.
/3/ 1999 results include an after-tax charge for restructuring of $49 million, or $.49 per share, and a credit of $15 million, or $.15 per share, for a release of deferred taxes.
/4/ 1998 results include an after-tax charge for restructuring of $3 million, or $.03 per share.
Item 7. Management's discussion and analysis of financial condition and results
of operations
Information required by this item is included in the Financial Review section of the MeadWestvaco 2001 Financial Report to Shareholders under the captions "MEADWESTVACO Merger", "Results of Operations", "Fiscal year 2001", "Fiscal year 2000", "Liquidity and capital resources," "Forward-looking statements," "Review of Operations", "Special Items", "Paper Segment", "Packaging and Paperboard Segment" and "Consumer and Office Products Segment" and is incorporated herein by reference.
Item 7A. Quantitative and qualitative disclosures about market risk
MeadWestvaco's financial market risk arises from fluctuations in interest rates and foreign currency exchange rates. The company's exposure to foreign currency fluctuations on its financial instruments is not material because most instruments are denominated in U.S. dollars. Furthermore, the company's exposure to foreign currency fluctuations on its income is not material because a majority of the company's sales are in U.S. dollars. The company does not hold financial instruments for trading purposes.
Most of Westvaco's debt obligations at December 31, 2001 were at fixed interest rates. Consequently, a 10% change in market interest rates would not have a material effect on Westvaco's results of operations or cash flows for the Transition Period.
Item 8. Financial statements and supplementary data
Information required by this item is included in the MeadWestvaco 2001 Financial Report to Shareholders under the captions "Consolidated statements of income," "Consolidated balance sheets," "Consolidated statements of shareholders' equity," "Consolidated statements of cash flows," "Notes to financial statements" and "Report of independent accountants," and is incorporated herein by reference.
II-4
Item 9. Changes in and disagreements with accounting and financial disclosure
None
Part III
Item 10. Directors and executive officers of the registrant
Information required by this item for MeadWestvaco's directors will be contained in MeadWestvaco's 2002 Proxy Statement, pursuant to Regulation 14A, to be filed with the Securities and Exchange Commission on or before March 29, 2002, and is incorporated herein by reference. Information required by this item for the MeadWestvaco's executive officers is contained in Part I of this report under the caption "Executive officers of the registrant."
Item 11. Executive compensation
Information required by this item will be contained in MeadWestvaco's 2002 Proxy Statement, pursuant to Regulation 14A, to be filed with the Securities and Exchange Commission by March 29, 2002, and is incorporated herein by reference.
Item 12. Security ownership of certain beneficial owners and management
Information required by this item will be contained in MeadWestvaco's 2002 Proxy Statement, pursuant to Regulation 14A, to be filed with the Securities and Exchange Commission by March 29, 2002, and is incorporated herein by reference.
Item 13. Certain relationships and related transactions
Information required by this item will be contained in MeadWestvaco's 2002 Proxy Statement, pursuant to Regulation 14A, to be filed with the Securities and Exchange Commission by March 29, 2002, and is incorporated herein by reference.
Part IV
Item 14. Exhibits, financial statement schedules and reports on Form 8-K
(a) Documents filed as part of this report:
1. Consolidated financial statements
The consolidated financial statements of Westvaco Corporation and consolidated subsidiaries listed below are incorporated herein by reference to the following pages of the MeadWestvaco 2001 Financial Report to Shareholders:
Consolidated statements of income for the transition period ended December 31, 2001 and fiscal years ended October 31, 2001, 2000 and 1999
Consolidated balance sheets at December 31, 2001 and October 31, 2001 and 2000
Consolidated statements of shareholders' equity at December 31, 2001 and October 31, 2001, 2000 and 1999
Consolidated statements of cash flows for transition period ended December 31, 2001 and fiscal years ended October 31, 2001, 2000 and 1999
Notes to financial statements
Report of independent accountants
2. Consolidated financial statement schedules
All financial statement schedules have been omitted because they are inapplicable, not required, or shown in the consolidated financial statements and notes thereto contained herein.
3. Exhibits 3.i Amended and Restated Certificate of Incorporation of the Registrant, previously filed as Exhibit 3.1, Form 8-K filed on January 29, 2002, incorporated herein by reference. 3.ii Bylaws of the Registrant, previously filed as Exhibit 3.2 to the company's Form 8-K filed on January 29, 2002, and incorporated herein by reference. 4.i $500 million Five -Year Credit Agreement dated December 21, 2001, by and among the Registrant, The Bank of New York, as agent, and the banks named therein. 4.ii $500 million 364-Day Credit Agreement dated December 21, 2001, by and among the Registrant, The Bank of New York, as agent, and the banks named therein. |
4.iii Form of Indenture among the Registrant, Westvaco Corporation, The Mead Corporation and The Bank of New York, as trustee, previously filed as Exhibit 4(a) to the company's Form S-3 filed on March 8, 2002, and incorporated herein by reference. 4.iv First Supplemental Indenture between Westvaco Corporation and The Bank of New York dated January 31, 2002, previously filed as Exhibit 4.1 to the company's Form 8-K, filed on February 1, 2002, incorporated herein by reference. 4.v Fourth Supplemental Indenture between The Mead Corporation and Bankers Trust Company dated January 31, 2002, previously filed as Exhibit 4.2 to the company's Form 8-K, filed on February 1, 2002, incorporated herein by reference. 4.vi First Supplemental Indenture between The Mead Corporation and Bank One Trust Company, NA dated January 31, 2002, previously filed as Exhibit 4.3 to the company's Form 8-K, filed on February 1, 2002, incorporated herein by reference. 4.vii Form of Indenture, dated as of March 1, 1983, between Westvaco Corporation and The Bank of New York (formerly Irving Trust Company), as trustee, previously filed as Exhibit 2 to the company's Registration Statement on Form 8-A, File No. 1-3013, dated January 24, 1984. The company agrees to furnish copies of other instruments defining the rights of holders of long-term debt to the Commission upon its request. 4.viii Rights Agreement dated as of January 29, 2002 between MeadWestvaco Corporation and The Bank of New York, previously filed as Item 2 to the company's Form 8-A dated January 29, 2002, File No. 333-71124, incorporated herein by reference. 4.viv Indenture dated as of July 15, 1982 between The Mead Corporation and Bankers Trust Company, as Trustee, First Supplemental Indenture dated as of March 1, 1987, Second Supplemental Indenture dated as of October 15, 1989 and Third Supplemental Indenture dated as of November 15, 1991. 4.vv Indenture dated as of February 1, 1993 between The Mead Corporation and The First National Bank of Chicago, as Trustee. 10.i The Westvaco Corporation 1983 Stock Option and Stock Appreciation Rights Plan, as amended, filed to Registration Statement on Form S-8 dated January 29, 2002, File No. 333-81638, incorporated herein by reference. 10.ii The Westvaco Corporation 1988 Stock Option and Stock Appreciation Rights Plan, as amended, filed to Registration Statement on Form S-8 dated January 29, 2002, File No. 333-81638, incorporated herein by reference. 10.iii Copies of Westvaco Corporation Savings and Investment Restoration Plan, as amended, effective January 1, 1990, and Retirement Income Restoration Plan and Excess Benefit Plan, as amended, effective January 1, 1990, previously filed as Exhibit 10(d) to the company's Annual Report on Form 10-K for the fiscal year ended October 31, 1989, File No. 1-3013, and incorporated herein by reference. |
10.iv Amendment to the Westvaco Corporation Savings and Investment Restoration Plan, effective January 1, 1991, previously filed as Exhibit 10(e) to the company's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, File No. 1-3013, and incorporated herein by reference. 10.v Amendment to the Westvaco Corporation Savings and Investment Restoration Plan, effective October 1, 1995, previously filed as Exhibit 10(e) to the company's Annual Report on Form 10-K for the fiscal year ended October 31, 1996, File No. 1-3013, and incorporated herein by reference. 10.vi The Westvaco Corporation 1995 Salaried Employee Stock Incentive Plan, effective February 28, 1995, filed to Registration Statement on Form S-8 dated January 29, 2002, File No. 333-81638, incorporated herein by reference. 10.vii The Westvaco Corporation Annual Incentive Compensation Plan, effective November 1, 1995, previously filed as Appendix A to the company's Notice of 1996 Annual Meeting of Shareholders and Proxy Statement dated December 29, 1995, File No. 1-3013, incorporated herein by reference. 10.viii The Westvaco Corporation 1995 Non-Employee Director Stock Incentive Plan, effective February 28, 1995, filed to Registration Statement on Form S-8 dated January 29, 2002, File No. 333-81638, incorporated herein by reference. 10.ix The Westvaco Corporation Deferred Compensation Plan for Outside Directors dated December 1986, previously filed as Exhibit 10(j) to the company's Annual Report on Form 10-K for the fiscal year ended October 31, 1996, incorporated herein by reference. 10.x Form of Employment Agreement dated by and among Jerome F. Tatar and John A. Luke, Jr., and the Registrant, filed to Registration Statement on Form S-4 dated December 20, 2001, File No. 333-71124, and incorporated herein by reference. 10.xi Form of Employment Agreement by and between Westvaco Corporation and certain individual officers of the company dated January 1999, previously filed as Exhibit 10(f) and 10(g)to the company's Quarterly Report on Form 10-Q for the three months ended January 31, 1999, File No. 1-3013, and incorporated herein by reference. 10.xii Employment Agreement dated as of January 27, 1999, by and between Westvaco Corporation and James A. Buzzard, previously filed as Exhibit 10(a) to the company's Quarterly Report on Form 10-Q for the three months ended January 31, 2000, File No. 1-3013, and incorporated herein by reference. 10.xiii Employment Agreement dated as of January 27, 1999, by and between Westvaco Corporation and Karen R Osar, previously filed as Exhibit 10(b) to the company's Quarterly Report on Form 10-Q for the three months ended January 31, 2000, File No. 1-3013, and incorporated herein by reference. |
10.xiv Employment Agreement dated as of April 20, 2000, by and between Westvaco Corporation and Richard H. Block, previously filed as Exhibit 10(a) to the company's Quarterly Report on Form 10-Q for the three months ended July 31, 2000, File No. 1-3013, and incorporated herein by reference. 10.xv The Westvaco Corporation 1999 Salaried Employee Stock Incentive Plan, effective September 17, 1999, filed to Registration Statement on Form S-8 dated January 29,2002, File No. 333-81638, incorporated herein by reference. 10.xvi The Westvaco Corporation Annual and Long-Term Incentive Plan effective November 28, 2000 previously filed as Exhibit 10(a) to the company's Quarterly Report on Form 10-Q/A for the three months ended April 30, 2001, File No. 1-3013, and incorporated herein by reference. 10.xvii The Westvaco Corporation Annual and Long-Term Incentive Plan for Executives Exempt from Internal Revenue Code Section 162(m) effective November 28, 2000, previously filed as Exhibit 10(b) to the company's Quarterly Report on Form 10- Q/A for the three months ended April 30, 2001, File No. 1- 3013, and incorporated herein by reference. 10.xviii The Westvaco Corporation Deferred Compensation Plan effective March 1, 2001, previously filed as Exhibit 10(c) to the company's Quarterly Report on Form 10-Q/A for the three months ended April 30, 2001, File No. 1-3013, and incorporated herein by reference. 10.xix The Westvaco Corporation Severance Benefit Plan for Senior Executives effective March 1, 2001, previously filed as Exhibit 10(d) to the company's Quarterly Report on Form 10- Q/A for the three months ended April 30, 2001, File No. 1- 3013, and incorporated herein by reference. 10.xxiii Amended and Restated Agreement and Plan of Merger, dated October 5, 2001, by and among MW Holding Corporation, Michael Merger Corporation, William Merger Sub corporation, The Mead Corporation and Westvaco Corporation, previously filed as Annex A to Registration Statement on Form S-4, File No. 333- 71124, incorporated herein by reference. 10.xx The Westvaco Corporation Employee Stock Ownership Plan for Salaried Employees, filed to Registration Statement on Form S-8 dated January 29, 2002, File No. 333-81636, incorporated herein by reference. 10.xxi The Westvaco Corporation Employee Stock Ownership Plan for Hourly Employees, filed to Registration Statement on Form S-8 dated January 29, 2002, File No. 333-81642, incorporated herein by reference. |
10.xxiii Lease Agreement between The Industrial Development Board of the City of Phenix City, Alabama and Mead Coated Board, Inc., dated as of December 1, 1988, as amended. 10.xxiv Lease Agreement between The Industrial Development Board of the City of Phenix City, Alabama and Mead Coated Board, Inc., dated as of June 1, 1993, as amended. 10.xxv Lease Agreement between The Industrial Development Board of the City of Phenix City, Alabama and Mead Coated Board, Inc., dated as of September 1, 1997, as amended. 10.xxvi Lease Agreement between The Industrial Development Board of the City of Stevenson, Alabama and The Mead Corporation, dated as of March 1, 1998. 10.xxvii 1991 Stock Option Plan of The Mead Corporation, as amended through June 24, 1999. 10.xxviii 1996 Stock Option Plan of The Mead Corporation as amended through June 24, 1999; as amended February 22, 2001. 10.xxix 1985 Supplement to The Mead Corporation's Incentive Compensation Election Plan, as amended November 17, 1987, and as further amended October 29, 1988; as amended effective June 24, 1998; as amended effective October 26, 2001. 10.xxx Excess Benefit Plan of The Mead Corporation dated January 1, 1996; as amended effective June 24, 1998; as amended effective October 26, 2001. 10.xxxi Excess Earnings Benefit Plan of The Mead Corporation dated January 1, 1996; as amended effective June 24, 1998; as amended effective October 26, 2001. 10.xxxii Restated Supplemental Executive Retirement Plan effective January 1, 1997; as amended effective June 24, 1998; as amended effective August 28, 2001. 10.xxxiii Form of Severance Agreement between The Mead Corporation and Raymond W. Lane; and, Amendment to Severance Agreement. 10.xxxiv Restated Benefit Trust Agreement dated August 27, 1996 between The Mead Corporation and Society Bank, National Association; as amended effective June 24, 1998; as amended effective October 28, 2000; as amended effective June 28, 2001; as amended August 28, 2001. 10.xxxv Restricted Stock Plan effective December 10, 1987, as amended through June 24, 1999. 10.xxxvi Deferred Compensation Plan for Directors of The Mead Corporation, as amended through October 29, 1988; as amended effective June 24, 1998; as amended effective October 26, 2001. 10.xxxvii 1985 Supplement to The Mead Corporation's Deferred Compensation Plan for |
Directors, as amended through October 29, 1988; as amended effective June 24, 1998; as amended effective October 26, 2001. 10.xxxviii Restated Directors Capital Accumulation Plan effective January 1, 2000; as amended effective October 26, 2001. 10.xxxix Form of Executive Life Insurance Policy for Key Executives. 10.xxxx Long Term Incentive Plan effective 2002; as amended November 7, 2001. 10.xxxxi Restated Executive Capital Accumulation Plan effective January 1, 2000; as amended effective October 26, 2001. 13. The pages 9 through 53 of the MeadWestvaco 2001 Financial - -- Report to Shareholders. Except for the information that is expressly incorporated by reference, the Financial Report to Shareholders is furnished for the information of the Securities and Exchange Commission and is not deemed to be filed as part of this report. 21. Subsidiaries of the registrant. 23. Consent of independent accountants. |
IV-5
(b) Reports on Form 8-K.
A report on Form 8-K was filed on January 30, 2002, and is incorporated herein by reference. The contents of the report are summarized below:
Item 5. Other Events: On January 30, 2002, Mead
and Westvaco issued a joint press release
announcing the completion of a merger of
equals.
Item 7. Financial Statements and Exhibits
Item 8. Change in fiscal year: On January 29,
2002, MeadWestvaco determined, in
connection with the Mergers, to change its
fiscal year end from October 31 to
December 31, to be effective beginning
December 31, 2001. A report on Form 10-K
covering the two months ended December 31,
2001 (transition period) will be filed in
accordance with the Securities and
Exchange Commission filing requirements.
A report on Form 8-K was filed on January 31, 2002, and is incorporated herein by reference. The contents of the report are summarized below:
Item 5. Other Events - MeadWestvaco Corporation
("MeadWestvaco") issued a news release on
January 30, 2002, announcing the following
actions taken by the Board of Directors:
. the declaration of a regular quarterly dividend of 23 cents per common share,
. the election of corporate officers and
. the selection of PricewaterhouseCoopers LLP to serve as MeadWestvaco's independent auditors.
Item 7. Financial Statements and Exhibits
IV-6
A report on Form 8-K was filed February 1, 2001, and is incorporated herein by reference. The contents of the report are summarized below:
Item 5. Other Events - On January 31, 2002, two of
MeadWestvaco Corporation's subsidiaries,
Westvaco Corporation and The Mead
Corporation, entered into Supplemental
Indentures with respect to their
respective debt securities.
Item 7. Exhibits
A report on Form 8-K was filed February 6, 2002, and is incorporated herein by reference. The contents of the report are summarized below:
Item 4. Change In Registrant's Certifying
Accountants - On January 30, 2002,
MeadWestvaco engaged
PricewaterhouseCoopers LLP, longstanding
independent accountants for Westvaco as
its independent accountants. Deloitte &
Touche LLP had been the independent
accountants for Mead and for MW Holding
Corporation (predecessor of MeadWestvaco).
MeadWestvaco's Audit Committee and Board
of Directors participated in and approved
the decision regarding independent
accountants.
Item 7. Financial Statements and Exhibits
A report on Form 8-K was filed on March 8, 2002, and is incorporated herein by reference. The contents of the report are summarized below:
Item 5. On January 29, 2002, The Mead Corporation
("Mead") and Westvaco Corporation
("Westvaco") merged resulting in the
formation of MeadWestvaco Corporation
("MeadWestvaco"). The merger is being
accounted for as an acquisition of Mead by
Westvaco and, consequently, the historical
financial statements of Westvaco became
the historical financial statements of
MeadWestvaco. Accordingly, Exhibit 99.1
and 99.2 are the audited financial
statements of the business being acquired
(Mead) and the related pro forma combined
condensed financial date, respectively.
Item 7. Financial Statements and Exhibits.
IV-7
A report on Form 8-K was filed on December 20, 2001 and is incorporated herein by reference. The contents of the report are summarized below:
Item 5. Other Events -Westvaco issued a news
release on November 20, 2001, announcing
fourth quarter and fiscal year 2001
earnings.
Item 7. Financial Statements and Exhibits
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MEADWESTVACO CORPORATION
(Registrant)
March 15, 2002 By /s/ John A. Luke, Jr. ------------------------------ John A. Luke, Jr. President and Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Jerome F. Tatar ------------------------------------- Jerome F. Tatar Chairman of the Board of Directors March 15, 2002 /s/ John A. Luke, Jr. President, March 15, 2002 ------------------------------------- Chief Executive Officer John A. Luke, Jr. and Director /s/ Karen R. Osar Senior Vice President March 15, 2002 ------------------------------------- (Principal Financial Officer) Karen R. Osar /s/ John E. Banu Comptroller March 15, 2002 -------------------------------------- (Principal Accounting Officer) John E. Banu /s/ John G. Breen Director March 15, 2002 -------------------------------------- John G. Breen /s/ Michael E. Campbell Director March 15, 2002 -------------------------------------- Michael E. Campbell /s/ Dr. Thomas W. Cole, Jr. Director March 15, 2002 -------------------------------------- Dr. Thomas W. Cole, Jr. /s/ Duane E. Collins Director March 15, 2002 -------------------------------------- Duane E. Collins /s/ William E. Hoglund Director March 15, 2002 -------------------------------------- William E. Hoglund /s/ James G. Kaiser Director March 15, 2002 ---------------------------------------- James G. Kaiser |
/s/ Richard B. Kelson Director March 15, 2002 ---------------------------------------- Richard B. Kelson /s/ John A. Krol Director March 15, 2002 ---------------------------------------- John A. Krol /s/ Susan J. Kropf Director March 15, 2002 ---------------------------------------- Susan J. Kropf /s/ Douglas S. Luke Director March 15, 2002 ---------------------------------------- Douglas S. Luke /s/ Robert C. McCormack Director March 15, 2002 ---------------------------------------- Robert C. McCormack /s/ Lee J. Styslinger, Jr. Director March 15, 2002 ---------------------------------------- Lee J. Styslinger, Jr. /s/ Jane L. Warner Director March 15, 2002 ---------------------------------------- Jane L. Warner /s/ J. Lawrence Wilson Director March 15, 2002 ---------------------------------------- J. Lawrence Wilson /s/ Richard A. Zimmerman Director March 15, 2002 ---------------------------------------- Richard A. Zimmerman |
Exhibit 4.i
$500,000,000
FIVE-YEAR CREDIT AGREEMENT
dated as of
December 21, 2001
among
MW HOLDING CORPORATION
(which, after the consummation of the Initial Transactions (as defined herein), shall be known as MeadWestvaco Corporation),
The Banks Listed Herein,
THE BANK OF NEW YORK, as Administrative Agent,
BANK ONE, NA, as Syndication Agent,
JP MORGAN CHASE BANK, CITICORP USA, INC. and BANK OF AMERICA, N.A.,
as Documentation Agents,
BARCLAYS BANK PLC, COMMERZBANK AG NEW YORK AND GRAND CAYMAN BRANCHES,
FLEET NATIONAL BANK, THE BANK OF NOVA SCOTIA and
WACHOVIA BANK, as Managing Agents,
and
SUMITOMO MITSUI BANKING CORPORATION and SUNTRUST BANK, as Co-Agents
BNY CAPITAL MARKETS, INC. and BANC ONE CAPITAL MARKETS, INC.,
as Lead Arrangers and Book Runners
TABLE OF CONTENTS ARTICLE 1. DEFINITIONS.......................................................1 Section 1.1. Definitions............................................1 Section 1.2. Accounting Terms and Determinations...................13 Section 1.3. Types of Borrowing....................................13 Section 1.4. Incorporation by Reference............................13 Section 1.5. Default Exceptions.....................................14 ARTICLE 2. THE CREDITS......................................................14 Section 2.1. Commitments to Lend...................................14 Section 2.2. Notice of Committed Borrowing.........................14 Section 2.3. Money Market Borrowings...............................15 Section 2.4. Notice to Banks; Funding of Loans.....................18 Section 2.5. Notes.................................................19 Section 2.6. Maturity of Loans.....................................19 Section 2.7. Interest Rates........................................19 Section 2.8. Fees..................................................21 Section 2.9. Optional Termination..................................22 Section 2.10. Mandatory Termination of Commitments.................22 Section 2.11. Optional Prepayments.................................22 Section 2.12. General Provisions as to Payments....................22 Section 2.13. Funding Losses.......................................23 Section 2.14. Computation of Interest and Fees.....................23 Section 2.15. Special Mandatory Payment/Commitment Termination......23 ARTICLE 3. CONDITIONS.......................................................24 Section 3.1 Effectiveness..........................................24 Section 3.2 Closing................................................25 Section 3.3. Borrowings............................................26 ARTICLE 4. REPRESENTATION AND WARRANTIES....................................26 Section 4.1. Corporate Existence and Power.........................26 Section 4.2. Corporate and Governmental Authorization..............26 Section 4.3. Binding Effect........................................27 Section 4.4. Financial Information.................................27 Section 4.5. Litigation............................................28 Section 4.6. Compliance with ERISA.................................28 Section 4.7. Subsidiaries..........................................29 Section 4.8. Not an Investment Company.............................29 Section 4.9. Merger................................................29 i |
ARTICLE 5. COVENANTS........................................................29 Section 5.1. Information...........................................29 Section 5.2. Maintenance of Property; Insurance....................30 Section 5.3. Payment of Taxes and Assessments, Conduct of Business and Maintenance of Existence........................30 Section 5.4. Compliance with Laws..................................31 Section 5.5. Restrictions on Sale and Lease-Back Transactions......31 Section 5.6. Negative Pledge.......................................32 Section 5.7. Consolidations, Mergers, Sales of Assets and Issuances of Capital Stock of the Guarantors........34 Section 5.8. Use of Proceeds.......................................36 Section 5.9. Total Debt to Total Capitalization Ratio..............36 Section 5.10. Amendment to Documents................................37 Section 5.11. Incorporation by Reference............................37 ARTICLE 6. DEFAULTS.........................................................37 Section 6.1. Events of Default.....................................37 Section 6.2. Notice of Default.....................................39 ARTICLE 7. THE AGENTS.......................................................39 Section 7.1. Appointment and Authorization.........................39 Section 7.2. Agents and Affiliates.................................40 Section 7.3. Action by Agents......................................40 Section 7.4. Consultation with Experts.............................40 Section 7.5. Liability of Agents...................................40 Section 7.6. Indemnification.......................................40 Section 7.7. Credit Decision.......................................40 Section 7.8. Successor Administrative Agent........................41 Section 7.9. Syndication Agent, Documentation Agents, Managing Agents and Co-Agents................................41 ARTICLE 8. CHANGE IN CIRCUMSTANCES..........................................41 Section 8.1. Basis for Determining Interest Rate Inadequate or Unfair...........................................41 Section 8.2. Illegality............................................42 Section 8.3. Increased Cost and Reduced Return.....................42 Section 8.4. Base Rate Loans Substituted for Affected Fixed Rate Loans..........................................44 Section 8.5. Substitution or Removal of Bank.......................44 ARTICLE 9. MISCELLANEOUS....................................................45 Section 9.1. Notices...............................................45 Section 9.2. No Waivers............................................45 Section 9.3. Expenses; Documentary Taxes; Indemnification..........45 ii |
Section 9.4. Sharing of Set-Offs...................................46 Section 9.5. Amendments and Waivers................................46 Section 9.6. Successors and Assigns................................47 Section 9.7. Collateral............................................48 Section 9.8. New York Law..........................................48 Section 9.9. Jurisdiction; Consent to Service of Process............49 Section 9.10. Jury Trial............................................49 Section 9.11. Counterparts; Integration............................49 Exhibit A - Note Exhibit B - Money Market Quote Request Exhibit C - Invitation for Money Market Quotes Exhibit D - Money Market Quote Exhibit E - Form of Assignment and Acceptance Exhibit F - Form of Opinion of the Borrower's General Counsel Exhibit G - Form of Guarantee Agreement |
FIVE-YEAR CREDIT AGREEMENT, dated as of December 21, 2001, among MW HOLDING
CORPORATION (which, after the consummation of the Initial Transactions, shall be
known as MeadWestvaco Corporation), the BANKS listed on the signature pages
hereof, THE BANK OF NEW YORK, as Administrative Agent, BANK ONE, NA, as
Syndication Agent, JP MORGAN CHASE BANK, CITICORP USA, INC. and BANK OF AMERICA,
N.A., as Documentation Agents, BARCLAYS BANK PLC, COMMERZBANK AG NEW YORK AND
GRAND CAYMAN BRANCHES, FLEET NATIONAL BANK, THE BANK OF NOVA SCOTIA and WACHOVIA
BANK, as Managing Agents, and SUMITOMO MITSUI BANKING CORPORATION and SUNTRUST
BANK, as Co-Agents.
The parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1. Definitions. The following terms, as used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3.
"Adjusted London Interbank Offered Rate" has the meaning, set forth in
Section 2.7(b).
"Administrative Agent" means The Bank of New York in its capacity as Administrative Agent hereunder, and its successors in such capacity.
"Administrative Questionnaire" means, with respect to each Bank, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including, with correlative meaning, the term "controlled"), as applied to any Person, means the possession, directly or indirectly, of the power to direct the management and policies of that Person, whether through the ownership of voting securities or otherwise.
"Agent" means the Administrative Agent, the Syndication Agent, the Documentation Agents, the Managing Agents or the Co-Agents, as the context may require.
"Applicable Lending Office" means, with respect to any Bank, (i) in the case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of its Money Market Loans, its Money Market Lending Office.
"Applicable Percentage" means (i) with respect to Euro-Dollar Borrowings, at all times during which the applicable Pricing Level set forth below is in effect, the percentage set forth
below for such Pricing Level under the heading "Euro-Dollar Margin" and (ii) with respect to the Facility Fee, at all times during which the applicable Pricing Level set forth below is in effect, the percentage set forth below for such Pricing Level under the heading "Facility Fee Rate":
====================================================== Pricing Euro-Dollar Facility Fee Levels Margin Rate ------------------------------------------------------ I 0.2900% 0.0850% ------------------------------------------------------ II 0.4000% 0.1000% ------------------------------------------------------ III 0.5000% 0.1250% ------------------------------------------------------ IV 0.6000% 0.1500% ------------------------------------------------------ V 0.8000% 0.2000% ------------------------------------------------------ VI 1.0000% 0.2500% ====================================================== |
Changes in the Applicable Percentage resulting from a change in the Pricing Level shall become effective on the effective date of any change in the Senior Unsecured Debt Rating from S&P or Moody's, as the case may be. Notwithstanding anything herein to the contrary, in the event that (A) the applicable Senior Unsecured Debt Ratings by S&P and Moody's are split-rated (i) by one rating category, the Pricing Level shall be determined by the higher of such two rating categories, and (ii) by more than one ratings category, the Pricing Level shall be one rating category below the higher of the two ratings categories, (B) either S&P or Moody's (but not both) shall no longer issue a rating for the Borrower's senior unsecured long-term debt, the Pricing Level shall be determined by the remaining Senior Unsecured Debt Rating, and (C) in the event that both S&P and Moody's shall no longer issue a rating for the Borrower's senior unsecured long-term debt unless and until the date, if any, that the Borrower and Required Lenders agree on a different arrangement, the existing Pricing Level shall continue in effect for the 60 day period immediately following such event and Pricing Level VI shall apply at all times after such period.
"Assignment and Acceptance" means an assignment and acceptance entered into by a Bank and an assignee (with the consent of any party whose consent is required by Section 9.6), and accepted by the Administrative Agent, substantially in the form of Exhibit E or any other form approved by the Administrative Agent.
"Bank" means each bank or financial institution listed on the signature pages hereof, and its successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a Base Rate Loan in accordance with the applicable Notice of Committed Borrowing or pursuant to Article 8.
"Benefit Arrangement" means at any time an employee benefit plan within the meaning of Section 3 (3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of an ERISA Group.
"Borrower" means MW Holding Corporation (which, after the consummation of the Initial Transactions, shall be known as MeadWestvaco Corporation), a Delaware corporation, and its successors.
"Borrower Name Change" means the changing of the Borrower's name in the records of the Secretary of State of the State of Delaware from "MW Holding Corporation" to "MeadWestvaco Corporation".
"Borrowing" has the meaning, set forth in Section 1.3.
"Cabin Bluff Notes" means the Loan and Guaranty Agreement, dated as of August 23, 1998, among Cabin Bluff Partners, Mead and Scott Paper Company, as guarantors, and the Sumitomo Bank, Limited, New York Branch, or the Loan and Guaranty Agreement among Cabin Bluff Partners, Mead and Kimberly-Clark Corporation, as guarantors, the lenders party thereto, The Sumitomo Bank, Limited, New York Branch, as a lender and syndication agent, Bank of America, N.A. (successor to Bank of America National Trust and Savings Association), as a lender and documentation agent, and The Chase Manhattan Bank, as a lender and administrative agent, as the same or any substitute or replacement agreement may be amended, restated, modified or replaced from time to time.
"Closing Date" means the date upon which all of the conditions set forth in
Section 3.2 shall be satisfied (or waived in accordance with Section 9.5).
"Co-Agents" means Sumitomo Mitsui Banking Corporation and Suntrust Bank in their capacity as Co-Agents hereunder, and their respective successors in such capacity.
"Commitment" means, with respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages hereof, as such amount may be changed from time to time pursuant to Sections 2.9, 2.10, 8.5 and 9.6.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.1.
"Consolidated Net Tangible Assets" means the total of all the assets appearing on the consolidated balance sheet of the Borrower and its Consolidated Subsidiaries less the following:
(1) current liabilities, including liabilities for indebtedness maturing more than 12 months from the date of the original creation thereof but maturing, within 12 months from the date of determination;
(2) reserves for depreciation and other asset valuation reserves;
(3) intangible assets such as goodwill, trademarks, trade names, patents, and unamortized debt discount and expense carried as an asset on said balance sheet; and
(4) appropriate adjustments on account of minority interests of other persons holding stock in any Subsidiary of the Borrower.
Consolidated Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Borrower and its Subsidiaries are engaged and which are approved by the independent accountants regularly retained by the Borrower, and may be determined as of a date not more than sixty days prior to the happening of the event for which such determination is being made.
"Consolidated Subsidiary" means at any date and with respect to any Loan Party any Subsidiary of such Loan Party or other entity the accounts of which would be consolidated with those of such Loan Party in its consolidated financial statements if such statements were prepared as of such date.
"Corporation" includes corporations, partnerships, associations, companies and business trusts.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, and
(iii) all Debt of others guaranteed directly or indirectly by such Person.
"Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.
"Defeased Debt" means any Debt which has been defeased (a)(i) in accordance with generally accepted accounting principles or (ii) pursuant to the deposit of cash, or debt securities backed by the full faith and credit of the United States, in either case in an amount sufficient to satisfy all such Debt at maturity or redemption, as applicable, and all payments of interest and premium, if any, in a trust or account created or pledged for the sole benefit of the holders of such Debt, and subject to no other Lien, and (b) in accordance with the other applicable terms of the instrument governing such Debt.
"Documentation Agents" means JP Morgan Chase Bank, Citicorp USA, Inc. and Bank of America, N.A. in their capacity as Documentation Agents hereunder, and their respective successors in such capacity.
"Domestic Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent.
"Domestic Subsidiary" means, with respect to any Loan Party, any Subsidiary thereof which owns a Principal Property.
"Effective Date" means the date this Agreement becomes effective in accordance with Section 3.1.
"Effective Time" has the meaning set forth in the Merger Agreement as in effect on the date hereof.
"Environmental Laws" means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means any Loan Party, any Subsidiary thereof and all members of a controlled group of Corporations and all trades or businesses (whether or not incorporated) under common control which, together with such Loan Party or any Subsidiary thereof, are treated as a single employer under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as a Euro-Dollar Loan in accordance with the applicable Notice of Committed Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.7(b).
"Event of Default" has the meaning set forth in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.
"Fixed Rate Loans" means Euro-Dollar Loans or Money Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base Rate pursuant to Section 8.1(a)) or any combination of the foregoing.
"Guarantee Agreement" means the guarantee agreement of Mead and Westvaco, substantially in the form of Exhibit G hereto.
"Guarantors" means each of Mead and Westvaco from the Effective Date to but excluding the date, if any, as it shall be released from its obligations under and in accordance with the Guarantee Agreement, together with any other Person that shall become a Guarantor in accordance with this Agreement, and "Guarantor" means any one of them.
"Incorporated Covenants" has the meaning set forth in Section 5.11.
"Incorporated Default" means (a) any "Event of Default" within the meaning of clauses (a), (d), (e), (h), or (i) of Section 6.1 of the Westvaco Credit Agreement, (b) any "Default" within the meaning of Sections 7.2, 7.5, 7.8, 7.9, 7.10 or 7.11 of the Mead 364-Day Credit Agreement, or (c) any "Default" within the meaning of Sections 7.2, 7.5, 7.8, 7.9, 7.10 or 7.11 of the Mead 5-Year Credit Agreement.
"Initial Transaction Documents" means (i) the Merger Agreement, and (ii) each other agreement, instrument or other document executed or delivered in connection therewith, including all approvals and consents obtained, and all legal opinions delivered, in connection with the Initial Transactions.
"Initial Transactions" means (i) the Mead Merger, (ii) the Westvaco Merger,
(iii) the Borrower Name Change, and (iv) each other transaction contemplated by
the Initial Transaction Documents to occur on or about the Merger Date.
"Interest Period" means: (1) with respect to each Euro-Dollar Borrowing, the period commencing on the date of such Borrowing and ending one, two, three or six months thereafter, as the Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls (i) after the Maturity Date, or (ii) in another calendar month, in either of which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period (other than an Interest Period determined pursuant to clause (b) below) which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding, Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
(3) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of months
thereafter (but not more than 6) as the Borrower may elect in accordance with
Section 2.3; provided that:
(a) any Interest Period (other than a Interest Period determined pursuant to clause (c) below) which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
(4) with respect to each Money Market Absolute Rate Borrowing, the period commencing on the date of such Borrowing and ending such number of days thereafter (but not less than 7 nor more than 180 days) as the Borrower may elect in accordance with Section 2.3; provided that:
(a) any Interest Period (other than an Interest period defined pursuant to clause (b) below) which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, or any successor statute.
"LIBOR Auction" means a solicitation of Money Market Quotes setting forth
Money Market Margins based on the London Interbank Offered Rate pursuant to
Section 2.3.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan or a Money Market Loan and "Loans" means Base Rate Loans or Euro-Dollar Loans or Money Market Loans or any combination of the foregoing.
"Loan Documents" means the Agreement, the Notes and the Guarantee Agreement, and "Loan Document" means any one of them.
"Loan Parties" means the Borrower and the Guarantors, and "Loan Party" means any one of them.
"London Interbank Offered Rate" has the meaning set forth in Section 2.7(b).
"Managing Agents" means Barclays Bank plc, Commerzbank AG New York and Grand Cayman Branches, Fleet National Bank, The Bank of Nova Scotia and Wachovia Bank in their capacity as Managing Agents hereunder, and their respective successors in such capacity.
"Material Debt" means Debt (other than the Notes) of the Borrower and/or one or more of its Domestic Subsidiaries, arising in one or more related or unrelated transactions, in an aggregate principal amount exceeding $75,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $75,000,000.
"Maturity Date" means December 21, 2006, or, if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Mead" means The Mead Corporation, an Ohio corporation.
"Mead Merger" means the merger of Mead into Michael Merger Sub with Mead as the surviving corporation, in accordance with the terms of the Merger Agreement as in effect on and as of the date hereof.
"Mead 364-Day Credit Agreement" means the 364-Day Credit Agreement, dated as of November 10, 2000, among Mead, the institutions from time to time parties thereto as "Lenders", Morgan Guaranty Trust Company of New York, as administrative agent, Bank One, NA, as syndication agent, and Bank of America, N.A., as documentation agent, as amended, supplemented or otherwise modified.
"Mead 5-Year Credit Agreement" means 5-Year Credit Agreement, dated as of November 10, 2000, among Mead, the institutions from time to time parties thereto as "Lenders", Morgan Guaranty Trust Company of New York, as administrative agent, Bank One, NA, as syndication agent, and Bank of America, N.A., as documentation agent, as amended, supplemented or otherwise modified.
"Mead's 2000 Form 10-K" means Mead's annual report on Form 10-K for 2000, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of August 21, 2001, by and among the Borrower, Michael Merger Sub, William Merger Sub, Mead and Westvaco, as the same may be amended, supplemented or otherwise modified from time to time.
"Merger Date" means the Closing Date as such term is defined in the Merger Agreement.
"Michael Merger Sub" means Michael Merger Sub Corporation, a Delaware corporation.
"Money Market Absolute Rate" has the meaning set forth in Section 2.3(d).
"Money Market Absolute Rate Loan" mean a loan to be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic Lending Office or such other office, branch or affiliate of such Bank as it may hereafter designate as its Money Market Lending Office by notice to the Borrower and the Administrative Agent; provided that any Bank may from time to time by notice to the Borrower and the Administrative Agent designate separate Money Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate Loans, on the other hand, in which case all references herein to the Money Market Lending Office of such Bank shall be deemed to refer to either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the Base Rate pursuant to Section 8.1 (a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.3(d).
"Money Market Quote" means an offer by a Bank to make a Money Market Loan in accordance with Section 2.3.
"Moody's" means Moody's Investors Service, Inc., or any successor thereto.
"mortgage" has the meaning set forth in Section 5.6.
"Multiemployer Plan" means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of an ERISA Group has an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of such ERISA Group during such five year period.
"Notes" means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as defined in
Section 2.2) or a Notice of Money Market Borrowing (as defined in Section
2.3(f)).
"Other Credit Agreement" means the 364-Day Credit Agreement, dated as of the date hereof, among the Borrower, the lenders listed therein, The Bank of New York, as administrative agent, Bank One, NA, as syndication agent, JP Morgan Chase Bank, Citicorp USA, Inc. and Bank of America, N.A., as documentation agents, Barclays Bank plc, Commerzbank AG New York and Grand Cayman Branches, Fleet National Bank, The Bank of Nova Scotia and Wachovia Bank, as managing agents, and Sumitomo Mitsui Banking Corporation and Suntrust Bank, as co-agents, as amended, supplemented or otherwise modified.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Participant" has the meaning set forth in Section 9.6(e).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any member of any ERISA Group for employees of any member of such ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of such ERISA Group for employees of any Person which was at such time a member of such ERISA Group.
"Pricing Level I" will be applicable for so long as the Senior Unsecured Debt Rating is A or higher by S&P or A2 or higher by Moody's.
"Pricing Level II" will be applicable for so long as the Senior Unsecured Debt Rating is A- or higher by S&P or A3 or higher by Moody's and Pricing Level I is not applicable.
"Pricing Level III" will be applicable for so long as the Senior Unsecured Debt Rating is BBB+ or higher by S&P or Baa1 or higher by Moody's and neither Pricing Level I nor II is applicable.
"Pricing Level IV" will be applicable for so long as the Senior Unsecured Debt Rating is BBB or higher by S&P or Baa2 or higher by Moody's and none of Pricing Levels I, II or III are applicable.
"Pricing Level V" will be applicable for so long as the Senior Unsecured Debt Rating is BBB- or higher by S&P or Baa3 or higher by Moody's and none of Pricing Levels I, II, III or IV are applicable.
"Pricing Level VI" will be applicable for so long as the Senior Unsecured Debt Rating is less than or equal to BB+ by S&P or less than or equal to Ba1 by Moody's or none of Pricing Levels I, II, III, IV or V are applicable.
"Prime Rate" means the rate of interest publicly announced by the Administrative Agent in New York City from time to time as its prime commercial lending rate.
"Principal Property" means any mill, converting plant, manufacturing plant, manufacturing facility, including, in each case, the equipment therein, or timberlands, located within the continental United States of America (other than any of the foregoing acquired principally for the control or abatement of atmospheric pollutants or contaminants or water, noise, odor or other pollution, or any facility financed from the proceeds of pollution control or revenue bonds), whether owned at March 1, 1983 or thereafter acquired, having a gross book value (without deductions of any applicable depreciation reserves) on the date as of which the determination is being made of more than two percent of Consolidated Net Tangible Assets, but shall not include any minerals or mineral rights, or any timberlands designated by the Board of Directors of the Borrower or of a Domestic Subsidiary thereof, as the case may be, as being held primarily for development and/or sale.
"Prior Credit Agreements" means, collectively, (i) the Westvaco Credit Agreement, (ii) the Mead 364-Day Credit Agreement, and (iii) the Mead 5-Year Credit Agreement.
"Receivables Facility Attributed Indebtedness" means the amount of obligations outstanding under a receivables purchase facility on any date of determination that would be
characterized as principal if such facility were structured as a secured lending transaction rather than as a purchase.
"Reference Banks" means the principal London offices of the Administrative Agent and the Syndication Agent.
"Refunding Borrowing" means a Committed Borrowing which, after application of the proceeds thereof, results in no net increase in the outstanding principal amount of Committed Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having, more than 50% of the aggregate amount of the Commitments or, if the Commitments shall have been terminated, holding Notes evidencing more than 50% of the aggregate unpaid principal amount of the Loans.
"Responsible Officer" means the chief executive officer, the chief financial officer, the chief accounting officer, the treasurer or the general counsel of the Borrower.
"Revolving Credit Period" means the period from and including the Closing Date to but excluding the Maturity Date.
"S&P" means Standard & Poor's Rating Group, a division of the McGraw-Hill Companies, or any successor thereto.
"Senior Unsecured Debt Ratings" means the Borrower's senior unsecured long-term debt ratings designated from time to time by S&P and Moody's.
"Significant Subsidiary" means any Subsidiary which is a "significant subsidiary" of the Borrower as defined in Rule 1-02 of Regulation S-X under the Securities Exchange Act of 1934.
"Subsidiary" means, with respect to any Loan Party, a Corporation more than 50% of the Voting Stock of which is owned or controlled, directly or indirectly, by such Loan Party or by one or more other Subsidiaries of such Loan Party, or by such Loan Party and one or more other Subsidiaries of such Loan Party.
"Syndication Agent" means Bank One, NA in its capacity as Syndication Agent hereunder, and its successors in such capacity.
"Unfunded Liabilities" means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential
liability of a member of any ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"Voting Stock" means stock of the class or classes having general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a Corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).
"Westvaco" means Westvaco Corporation, a Delaware corporation.
"Westvaco Credit Agreement" means the Credit Agreement, dated as of November 16, 2000, among Westvaco, the lenders listed therein, The Bank of New York, as administrative agent, Bank of America, N.A., as documentation agent, and Citibank, N.A., as syndication agent, as the same may have been amended, supplemented or otherwise modified.
"Westvaco Merger" means the merger of Westvaco into William Merger Sub with Westvaco as the surviving corporation, in accordance with the terms of the Merger Agreement as in effect on and as of the date hereof.
"Westvaco's 2000 Form 10-K" means Westvaco's annual report on Form 10-K for 2000, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"William Merger Sub" means William Merger Sub Corporation, a Delaware corporation.
Section 1.2. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the relevant Loan Party's independent public accountants) with the most recent audited consolidated financial statements of such Loan Party and its Consolidated Subsidiaries delivered to the Banks.
Section 1.3. Types of Borrowing. The term "Borrowing" denotes the aggregation of Loans of one or more Banks to be made to the Borrower pursuant to Article 2 on a single date and for a single Interest Period. Borrowings are classified for purposes of this Agreement either by reference to the pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions of Article 2 under which participation therein is determined (i.e., a "Committed Borrowing" is a Borrowing under Section 2.1 in which all Banks participate in proportion to their Commitments, while a "Money Market Borrowing" is a Borrowing under Section 2.3) in which the Bank participants are determined on the basis of their bids in accordance therewith).
Section 1.4. Incorporation by Reference. Provisions of the Mead 364-Day Credit Agreement, the Mead 5-Year Credit Agreement and the Westvaco Credit Agreement identified herein as the "Incorporated Defaults" and the "Incorporated Covenants" are incorporated by
reference herein as if fully set forth herein, including the defined terms used in such Incorporated Defaults and Incorporated Covenants, in each case mutatis mutandis (such Incorporated Defaults, Incorporated Covenants and related defined terms being collectively referred to as the "Incorporated Provisions"). Under no circumstances shall an Incorporated Provision apply to any Person to which it would not otherwise apply pursuant to the terms of the applicable Prior Credit Agreement. Notwithstanding the fact that the Incorporated Provisions hereafter may be altered, amended, changed, extended, modified, restated, revised, supplemented or waived (collectively, "Amended or Waived") by the parties to the Mead 364-Day Credit Agreement, the Mead 5-Year Credit Agreement or the Westvaco Credit Agreement, such Incorporated Provisions shall not be Amended or Waived for purposes of this Agreement without the prior written consent of the Required Banks (as defined in this Agreement). If the Required Banks do not consent to any such alteration, amendment, change, extension, modification, restatement, revision, supplement or waiver (collectively, an "Amendment or Waiver") of any Incorporated Provision, such Incorporated Provision shall be in effect hereunder as it existed prior to such Amendment or Waiver. On and as of the Closing Date, the Incorporated Provisions shall cease to be incorporated herein by reference and shall be of no further force or effect, provided that any Default under an Incorporated Provision that existed immediately prior to the Closing Date shall continue hereunder until cured or waived under this Agreement.
Section 1.5. Default Exceptions. Any Default that, but for this Section 1.5, shall have occurred under Sections 5.3, 5.5, 5.6, 5.7, 6.1(d), 6.1(e)(ii), 6.1(h) or 6.1(i) prior to the Closing Date shall be deemed not to have occurred to the extent that the event, condition, action or omission that caused such Default would not have caused a Default had such event, condition, action or omission occurred immediately after the consummation of the Initial Transactions.
ARTICLE 2.
THE CREDITS
Section 2.1. Commitments to Lend.
During the Revolving Credit Period each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section from time to time in amounts such that the aggregate
principal amount of Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each Borrowing, under this
Section shall be in an aggregate principal amount of $10,000,000 or any larger
multiple of $1,000,000 (except that any such Borrowing may be in the aggregate
amount available in accordance with Section 3.3(b)) and shall be made from the
several Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, repay, or to the
extent permitted by Section 2.11, prepay Loans and reborrow at any time during
the Revolving Credit Period under this Section.
Section 2.2. Notice of Committed Borrowing. The Borrower shall give the
Administrative Agent notice (a "Notice of Committed Borrowing") not later than
10:00 A.M. (New York City time) on (x) the date of each Base Rate Borrowing and
(y) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Euro-Dollar Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period.
Section 2.3. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings pursuant to Section 2.1, the Borrower may, as set forth in this Section, request the Banks during the Revolving Credit Period to make offers to make Money Market Loans to the Borrower. The Banks may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request offers to make Money Market Loans under this Section, it shall transmit to the Administrative Agent by telex or facsimile transmission a Money Market Quote Request substantially in the form of Exhibit B hereto so as to be received no later than 10:00 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic Business Day next preceding the date of Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be $20,000,000 or a larger multiple of $5,000,000,
(iii) the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one Interest Period in a single Money Market Quote Request. No more than four Money Market Quote Requests shall be given in any one calendar month.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a Money Market Quote Request, the Administrative Agent shall send to the Banks by telex or facsimile transmission an Invitation for Money Market Quotes substantially in the form of Exhibit C hereto, which shall constitute an invitation by the Borrower to each Bank to submit Money Market Quotes offering to make the Money Market Loans to which such Money Market Quote Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank may submit a Money Market Quote containing an offer or offers to make Money Market Loans in response to any Invitation for Money Market Quotes. Each Money Market Quote must comply with the requirements of this subsection (d) and must be submitted to the Administrative Agent by telex or facsimile transmission at its offices specified in or pursuant to Section 9.1 not later than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:15 A.M. (New York City time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective); provided that Money Market Quotes submitted by the Administrative Agent (or any affiliate of the Administrative Agent) in the capacity of a Bank may be submitted, and may only be submitted, if the Administrative Agent or such affiliate notifies the Borrower of the terms of the offer or offers contained therein not later than (x) 1:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to the proposed date of Borrowing in the case of a LIBOR Auction or (y) 9:00 A.M. (New York City time) on the proposed date of Borrowing in the case of an Absolute Rate Auction. Subject to Articles 3 and 6, any Money Market Quote so made shall be irrevocable except with the written consent of the Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each such offer is being made, which principal amount (w) may be greater than or less than the Commitment of the quoting Bank, (x) must be $5,000,000 or a larger multiple of $1,000,000, (y) may not exceed the principal amount of Money Market Loans for which offers were requested and (z) may be subject to an aggregate limitation as to the principal amount of Money Market Loans for which offers being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the applicable London Interbank Offered Rate (the "Money Market Margin") offered for each such Money Market Loan, expressed as a percentage (specified to the nearest 1/10,000th of 1%) to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting Bank with respect to each Interest Period specified in the related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or does not specify all of the information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly notify the Borrower of the terms (x) of any Money Market Quote submitted by a Bank that is in accordance with subsection (d), and (y) of any Money Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote submitted by such Bank with respect to the same Money Market Quote Request. Any such subsequent Money Market Quote shall be disregarded by the Administrative Agent unless such subsequent Money Market Quote is submitted solely to correct a manifest error in such former Money Market Quote. The Administrative Agent's notice to the Borrower shall specify (A) the aggregate principal amount of Money Market Loans for which offers have been received for each Interest Period specified in the related Money Market Quote Request, (B) the respective principal amounts and Money Market Margins or Money Market Absolute Rates, as the case may be, so offered and (C) if applicable, limitations on the aggregate principal amount of Money Market Loans for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:00 A.M. (New York City time) on (x) the third Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified the Banks not later than the date of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective), the Borrower shall notify the Administrative Agent of its acceptance or non-acceptance of the offers so notified to it pursuant to subsection (e). In the case of acceptance, such notice (a "Notice of Money Market Borrowing") shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing may not exceed the applicable amount set forth in the related Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must be $20,000,000 or a larger multiple of $5,000,000,
(iii) acceptance of offers may only be made on the basis of ascending Money Market Margins or Money Market Absolute Rates, as the case may be, and
(iv) the Borrower may not accept any offer that is described in subsection (d)(iii) or that otherwise fails to comply with the requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by two or more
Banks with the same Money Market Margins or Money Market Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount in respect
of which such offers are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are accepted shall
be allocated by the Administrative Agent among such Banks as nearly as possible
(in multiples of $1,000,000, as the Administrative Agent may deem appropriate)
in proportion to the aggregate principal amounts of such offers. Determinations
by the Administrative Agent of the amounts of Money Market Loans shall be
conclusive in the absence of manifest error.
Section 2.4. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Administrative Agent shall promptly notify each Bank of the contents thereof and of such Bank's share (if any) of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of each Borrowing, each Bank participating therein shall (except as provided in subsection (c) of this Section) make available its share of such Borrowing, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address referred to in Section 9.1. Unless the Administrative Agent determines that any applicable condition specified in Article 3) has not been satisfied, the Administrative Agent will make the funds so received from the Banks available to the Borrower at the Administrative Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the Borrower is to repay all or any part of an outstanding Loan from such Bank, such Bank shall apply the proceeds of its new Loan to make such repayment and only an amount equal to the difference (if any)
between the amount being borrowed and the amount being repaid shall be made
available by such Bank to the Administrative Agent as provided in subsection
(b), or remitted by the Borrower to the Administrative Agent as provided in
Section 2.12, as the case may be.
(d) Unless the Administrative Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Administrative Agent such Bank's share of such Borrowing, the Administrative Agent may assume that such Bank has made such share available to the Administrative Agent on the date of such Borrowing in accordance with subsections (b) and (c) of this Section 2.4 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Administrative Agent, such Bank and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. The provisions of this Section 2.4(d) shall not relieve any Bank of responsibility for its obligations under this Agreement or any default in the performance thereof.
Section 2.5. Notes. (a) The Loans of each Bank shall be evidenced by a single Note payable to the order of such Bank for the account of its Applicable Lending Office in an amount equal to the aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Administrative Agent, request that its Loans of a particular type be evidenced by a separate Note in an amount equal to the aggregate unpaid principal amount of such Loans. Each such Note shall be in substantially the form of Exhibit A hereto with appropriate modifications to reflect the fact that it evidences solely Loans of the relevant type. Each reference in this Agreement to the "Note" of such Bank shall be deemed to refer to and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.1(b), the Administrative Agent shall forward such Note to such Bank. Each Bank shall record the date, amount, type and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the failure of any Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required.
Section 2.6. Maturity of Loans. Each Loan included in any Borrowing shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Borrowing.
Section 2.7. Interest Rates. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day. Such interest shall be payable for each Interest Period on the last day thereof. Any overdue principal of or interest on any Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 1% plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding, principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the Applicable Percentage plus the applicable Adjusted London Interbank Offered Rate. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof.
The "Adjusted London Interbank Offered Rate" applicable to any Interest Period means a rate per annum equal to the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period means the London interbank offered rate for deposits in U.S. dollars appearing on Reuters screen FRBD (or its successors) as of 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period, and having a maturity equal to such Interest Period, provided that, if no such London interbank offered rate is available to the Administrative Agent, the applicable London Interbank Offered Rate for the relevant Interest Period shall instead equal the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per annum at which deposits in dollars are offered to each of the Reference Banks in the London interbank market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of such Reference Bank to which such Interest Period is to apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of "Eurocurrency liabilities" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Bank to United States residents). The Adjusted London
Interbank Offered Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day from and including the date payment
thereof was due to but excluding the date of actual payment, at a rate per annum
equal to the sum of 1% plus the Applicable Percentage plus the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (x)
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which one day (or, if such amount due remains
unpaid for more than three Euro-Dollar Business Days, then for such other period
of time not longer than six months as the Administrative Agent may select)
deposits in dollars in an amount approximately equal to such overdue payment due
to each of the Reference Banks are offered to such Euro-Dollar Reference Bank in
the London interbank market for the applicable period determined as provided
above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.1 shall exist, at a
rate per annum equal to the sum of 1% plus the rate applicable to Base Rate
Loans for such day).
(d) Subject to Section 8.1(a), each Money Market LIBOR Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the London Interbank Offered Rate for such Interest Period (determined in accordance with Section 2.7(b) as if the related Money Market LIBOR Borrowing were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the Bank making such Loan in accordance with Section 2.3). Each Money Market Absolute Rate Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Money Market Absolute Rate quoted by the Bank making such Loan in accordance with Section 2.3. Such interest shall be payable for each Interest Period on the last day thereof. Any overdue principal of or interest on any Money Market Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 1% plus the Base Rate for such day.
(e) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder. The Administrative Agent shall give prompt notice to the Borrower and the participating Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish quotations to the Administrative Agent as contemplated by this Section. If any Reference Bank does not furnish a timely quotation, the Administrative Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Bank or Banks or, if none of such quotations is available on a timely basis, the provisions of Section 8.1 shall apply.
Section 2.8. Fees.
(a) Facility Fee. The Borrower shall pay to the Administrative Agent for the account of the Banks ratably a facility fee at a rate per annum equal to the Applicable Percentage. Such facility fee shall accrue (i) from and including the Merger Date to but excluding the Maturity
Date, on the daily average aggregate amount of the Commitments (whether used or unused) and (ii) from and including the Maturity Date to but excluding the date the Loans shall be repaid in their entirety, on the daily average aggregate outstanding principal amount of the Loans.
(b) Utilization Fee. The Borrower shall pay to the Administrative Agent for the account of the Banks ratably in accordance with their Commitments a utilization fee at a rate per annum equal to 0.125% on the aggregate outstanding principal balance of the Loans for each day that such aggregate outstanding principal balance together with the aggregate outstanding principal balance of all loans under the Other Credit Agreement shall exceed 33.0% of the sum of aggregate Commitments and the aggregate commitments of the lenders under the Other Credit Agreement.
(c) Payments. Accrued fees under this Section shall be payable quarterly on each March 31, June 30, September 30 and December 31 and upon the date of termination of the Commitments in their entirety (and, if later, the date the Loans shall be repaid in their entirety) and upon each optional reduction of the Commitments.
Section 2.9. Optional Termination or Reduction of Commitments. During the Revolving Credit Period, the Borrower may, upon at least three Domestic Business Days' notice to the Administrative Agent, (i) terminate the Commitments at any time, if no Loans are outstanding at such time or (ii) ratably reduce from time to time by an aggregate amount of $5,000,000 or in an integral multiple of $1,000,000 in excess thereof, the aggregate amount of the Commitments in excess of the aggregate outstanding principal amount of the Loans.
Section 2.10. Mandatory Termination of Commitments. The Commitments shall terminate on the Maturity Date, and any Loans then outstanding (together with accrued interest thereon) shall be due and payable on such date.
Section 2.11. Optional Prepayments. (a) The Borrower may, upon (i) the same Domestic Business Day's notice to the Administrative Agent, prepay any Base Rate Borrowing (or any Money Market Borrowing bearing interest at the Base Rate pursuant to Section 8.1(a)) or (ii) three Domestic Business Days' notice to the Administrative Agent, prepay any Euro-Dollar Borrowing, in whole at any time, or from time to time in part in amounts aggregating $5,000,000 or any larger multiple of $1,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment and in the case of a prepayment of a Money Market Borrowing or a Euro-Dollar Borrowing, together with compensation therefor pursuant to Section 2.13. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the Administrative Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share (if any) of such prepayment and such notice shall not thereafter be revocable by the Borrower.
Section 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 12:00
Noon (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address referred to in Section 9.1. Except as otherwise provided in Section 8.5, the Administrative Agent will promptly distribute to each Bank its ratable share of each such payment received by the Administrative Agent for the account of the Banks. Whenever any payment of principal of, or interest on, the Base Rate Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. Whenever any payment of principal of, or interest on, the Money Market Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Administrative Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Rate.
Section 2.13. Funding Losses. If the Borrower makes any payment of principal with respect to any Fixed Rate Loan (pursuant to Article 6 or 8 or otherwise) on any day other than the last day of the Interest Period applicable thereto, or the last day of an applicable period fixed pursuant to Section 2.7(c), or if the Borrower fails to borrow any Fixed Rate Loans after notice has been given to any Bank in accordance with Section 2.4(a), the Borrower shall reimburse each Bank within 15 days after demand for any resulting loss or expense incurred by it (or by an existing or prospective Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after any such payment or failure to borrow, provided that such Bank shall have delivered to the Borrower a certificate as to the amount of such loss or expense, setting forth in reasonable detail the calculation thereof, which certificate shall be conclusive if prepared in good faith and on a reasonable basis.
Section 2.14. Computation of Interest and Fees. (a) Interest on Base Rate Borrowings shall be computed on the basis of a 365 or 366 day year for the actual number of days elapsed. Interest on Money Market Borrowings and Euro-Dollar Borrowings shall be computed on the basis of a 360 day year for the actual number of days elapsed.
(b) All fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).
Section 2.15. Special Mandatory Prepayment/Commitment Termination. If either of the events described in Sections 2.15(a) and 2.15(b) below (each a "Change in Control") occur, at any time during the 45 day period following the Event Date, Required Banks may determine to require a special mandatory prepayment of all Loans outstanding hereunder and terminate the Commitments of all of the Banks following 180 days notice to the Borrower. If the Required Banks shall make such a determination, on the 180th day following notice to the Borrower of such determination, all principal and accrued and unpaid interest and all accrued and unpaid fees and other sums then owing hereunder or under the Notes shall be immediately due and payable and the Commitments of all Banks hereunder shall terminate. Promptly after a Responsible Officer obtains knowledge of a Change of Control, the Borrower shall deliver to the Administrative Agent and each Bank written notice thereof, provided that with respect to a Change of Control referred to in Section 2.15(b), the knowledge of each Responsible Officer shall be limited to information pursuant to formal written notices delivered to the Borrower of which such Responsible Officer is aware and information in public securities law filings. The events which may permit such special mandatory prepayment and Commitment termination are:
(a) During any period of three consecutive years individuals who at the beginning of such period constituted the board of directors of the Borrower, together with any directors whose election or nomination for election by the Borrower's stockholders was approved by a vote of at least majority of the directors then still in office who were directors at the beginning of the period, cease for any reason to constitute a majority of the board of directors of the Borrower.
(b) Any person or group of persons (within the meaning of Section 13 and 14 of the Exchange Act) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under the Exchange Act) of Voting Securities of the Borrower representing in excess of 35% of the votes entitled to vote for the election of directors of the Borrower.
For purposes of this Section 2.15:
"Voting Securities" means all capital stock of the Borrower which is ordinarily entitled to vote for the election of directors.
"Event Date" means the date on which the Borrower notifies the Banks, in writing, that an event described in Section 2.15(a) or 2.15(b) above has occurred.
ARTICLE 3.
CONDITIONS
Section 3.1. Effectiveness. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied (or waived in accordance with Section 9.5 with the consent of each Loan Party):
(a) receipt by the Administrative Agent of counterparts hereof signed by each of the parties hereto (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Administrative Agent in form satisfactory to it of telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party);
(b) receipt by the Administrative Agent for the account of each Bank of a duly executed Note dated on or before the Effective Date complying with the provisions of Section 2.5;
(c) receipt by the Administrative Agent of counterparts of the Guarantee Agreement signed by each of Mead and Westvaco; and
(d) receipt by the Administrative Agent of (i) evidence that, prior to or simultaneously with the Effective Date, the Other Credit Agreement shall have become effective, and (ii) all documents it may reasonably request relating to the existence of the Borrower, the corporate authority of the Borrower or the validity of this Agreement and the Notes, and any other matters relevant hereto, all in form and substance satisfactory to the Administrative Agent;
provided that this Agreement shall not become effective or be binding on any party hereto unless not later than February 28, 2002 all of the foregoing conditions are satisfied (or waived in accordance with Section 9.5 with the consent of each Loan Party) and the Other Credit Agreement shall have become effective. The Administrative Agent shall promptly notify the Borrower and the Banks of the Effective Date, and such notice shall be conclusive and binding on all parties hereto.
Section 3.2. Closing. In addition to the requirements set forth in Sections 3.1 and 3.3, the obligation of each Bank to make a Loan is subject to the satisfaction (or waiver in accordance with Section 9.5 with the consent of each Loan Party) of the following conditions on or prior to the initial Borrowing:
(a) receipt by the Administrative Agent of an opinion of the General Counsel of the Borrower, substantially in the form of Exhibit F hereto, and covering such other matters relating to the Loan Parties, the Loan Documents and the Transactions as the Administrative Agent or Required Banks may reasonably request;
(b) consummation of the Initial Transactions in accordance with the terms and conditions of the Initial Transaction Documents, and the receipt by the Administrative Agent of a certificate, dated the Merger Date and signed by the chief executive officer or the chief financial officer of the Borrower, (i) certifying that the representations and warranties contained in Section 4.9 are true and correct and that no Default has occurred or is continuing, (ii) certifying, to the best knowledge of such officer, that the consummation of the
Initial Transactions will not have any immediate adverse tax consequences to the Borrower and its Subsidiaries taken as a whole, and (iii) attaching a true, complete and correct copy of each Initial Transaction Document (including, without limitation, (A) a certificate of merger filed in, and certified by, the Secretary of State of Ohio reflecting the consummation of the Mead Merger, (B) a certificate of merger filed in, and certified by, the Secretary of State of Delaware reflecting the consummation of the Westvaco Merger, (C) the amended Articles of Incorporation of the Borrower filed in, and certified by, the Secretary of State of Delaware after giving effect to the Initial Transactions, and (D) the By-laws of the Borrower as in effect on the Merger Date, certified as such by the Secretary or Assistant Secretary of the Borrower after giving effect to the Initial Transactions), which in each case shall be in form and substance satisfactory to the Administrative Agent;
(c) receipt by the Administrative Agent of all documents it may reasonably request relating to the Initial Transactions, the existence of the Guarantors, their corporate authority or the validity of the Guaranty Agreement, and any other matters relevant hereto or thereto, all in form and substance satisfactory to the Administrative Agent; and
(d) the fact that any amounts outstanding under the Prior Credit Agreements, together with accrued interest and fees thereunder, shall have been paid in full, and all commitments to extend credit thereunder shall have been terminated;
provided that the foregoing conditions shall conclusively be deemed not to have been satisfied (in which event each Commitment hereunder shall automatically terminate) unless all of the foregoing conditions are satisfied (or waived in accordance with Section 9.5 with the consent of each Loan Party) not later than February 28, 2002. The Agent shall promptly notify the Borrower and the Banks of the Closing Date, and such notice shall be conclusive and binding on all parties hereto. The Borrower and the Banks party to the Prior Credit Agreements, to the extent that the Banks constitute "Required Banks" or "Required Lenders" thereunder, hereby agree that the commitments to extend credit thereunder shall terminate automatically upon the Closing Date.
Section 3.3. Borrowings. In addition to the requirements set forth in Sections 3.1 and 3.2, the obligation of any Bank to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as required by Section 2.2 or 2.3, as the case may be;
(b) the fact that, immediately after such Borrowing, the aggregate outstanding principal amount of the Loans will not exceed the aggregate amount of the Commitments; (c) the fact that, immediately after such Borrowing, no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of a Refunding Borrowing, the
representations and warranties set forth in Sections 4.4(c), (f) and (h) and
Section 4.5, in each case as to any matter which has theretofore been disclosed
in writing by the Borrower to the Banks) shall be true on and as of the date of
such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
Section 4.1. Corporate Existence and Power. Each Loan Party is a corporation validly existing and in good standing under the laws of the state of its formation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.
Section 4.2. Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party are within such Loan Party's corporate powers, have been authorized by all necessary corporate action, require no action by or in respect of, or (except for informational filings under section 13 or 15(d) of the Exchange Act) filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Loan Party or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Loan Party or result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
Section 4.3. Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrower and the Notes and the Guarantee Agreement, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of each Loan Party party thereto.
Section 4.4. Financial Information.
(a) The consolidated balance sheets of Westvaco and its Consolidated Subsidiaries as at October 31, 1999 and 2000, and the related consolidated statements of income and retained income and cash flows for each of the three years in the period ended October 31, 2000, reported on by PricewaterhouseCoopers and incorporated by reference in Westvaco's 2000 Form 10-K, a copy of which has been delivered to each of the Banks, present fairly, in all material respects, the consolidated financial position of Westvaco and its Consolidated Subsidiaries as at such dates and the results of their operations and their cash flows for each such year, in conformity with generally accepted accounting principles.
(b) The unaudited consolidated balance sheet of Westvaco and its Consolidated Subsidiaries as of July 31, 2001 and the related unaudited consolidated statements of income for the three and nine months ended July 31, 2001 and the unaudited consolidated statement of cash flows for the nine months ended July 31, 2001, set forth in Westvaco's quarterly report for the fiscal quarter ended July 31, 2001 as filed with the Securities and Exchange Commission on Form 10-Q, a copy of which has been delivered to each of the Banks, contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of Westvaco and its Consolidated Subsidiaries as of July 31, 2001 and the results of their operations for the three and nine months ended
July 31, 2001 and their cash flows for the nine months ended July 31, 2001. These statements have been prepared on the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of Westvaco's 2000 Form 10-K.
(c) Since July 31, 2001, there has been no material adverse change in the business or financial position of Westvaco and its Consolidated Subsidiaries, considered as a whole, nor have any matters or occurrences come to any Loan Party's attention which are likely to cause any material adverse change in the business or financial position of Westvaco.
(d) The consolidated balance sheets of Mead and its Consolidated Subsidiaries as at December 31, 1999 and 2000, and the related consolidated statements of income and retained income and cash flows for each of the three years in the period ended December 31, 2000, reported on by Deloitte & Touche LLP and incorporated by reference in Mead's 2000 Form 10-K, a copy of which has been delivered to each of the Banks, present fairly, in all material respects, the consolidated financial position of Mead and its Consolidated Subsidiaries as at such dates and the results of their operations and their cash flows for each such year, in conformity with generally accepted accounting principles.
(e) The unaudited consolidated balance sheet of Mead and its Consolidated Subsidiaries as of September 30, 2001 and the related unaudited consolidated statements of income for the three and nine months ended September 30, 2001 and the unaudited consolidated statement of cash flows for the nine months ended September 30, 2001, set forth in Mead's quarterly report for the fiscal quarter ended September 30, 2001 as filed with the Securities and Exchange Commission on Form 10-Q, a copy of which has been delivered to each of the Banks, contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of Mead and its Consolidated Subsidiaries as of September 30, 2001 and the results of their operations for the three and nine months ended September 30, 2001 and their cash flows for the nine months ended September 30, 2001. These statements have been prepared on the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of Mead's 2000 Form 10-K.
(f) Since September 30, 2001, there has been no material adverse change in the business or financial position of Mead and its Consolidated Subsidiaries, considered as a whole, nor have any matters or occurrences come to any Loan Party's attention which are likely to cause any material adverse change in the business or financial position of Mead.
(g) The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at September 21, 2001, presents fairly, in all material respects, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as at such date, in conformity with generally accepted accounting principles.
(h) Since September 21, 2001 and since the Merger Date, there has been no material adverse change in the financial position of the Borrower and its Consolidated Subsidiaries, considered as a whole, nor have any matters or occurrences come to the Borrower's attention which are likely to cause any material adverse change in the financial position of the Borrower.
Section 4.5. Litigation. There is no action, suit or proceeding pending against, or to the knowledge of any Loan Party threatened against, any Loan Party or any of such Loan Party's Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business or consolidated financial position of such Loan Party and its Consolidated Subsidiaries, considered as a whole, or which in any manner draws into question the validity of this Agreement, the Guarantee Agreement or the Notes.
Section 4.6. Compliance with ERISA. Each member of each ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code with respect to each Plan. No member of any ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which failure or amendment has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Internal Revenue Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA.
Section 4.7. Subsidiaries. Each Loan Party's Domestic Subsidiaries is a Corporation validly existing and in good standing under the laws of its jurisdiction of formation, and has all corporate or analogous powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.
Section 4.8. Not an Investment Company. No Loan Party is an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
Section 4.9. Merger. At the Effective Time (a) each of the Mead Merger, the
Westvaco Merger and the Borrower Name Change shall have occurred, (b) each of
Mead and Westvaco shall be a direct, wholly-owned Subsidiary of the Borrower,
(c) each of the Mead Merger and the Westvaco Merger was consummated in
accordance with the Merger Agreement, and (d) each condition precedent set forth
in Article VII of the Merger Agreement to the obligation of each party thereto
to effect the Mead Merger and the Westvaco Merger was satisfied (and not
waived), other than in connection with any such waiver thereof that would not
materially and adversely affect the interests of the Banks under the Loan
Documents.
ARTICLE 5.
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder or any amount payable under any Note remains unpaid:
Section 5.1. Information. The Borrower will deliver to each of the Banks:
(a) as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income and retained income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without material qualification by independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated statements of income for such quarter and for the portion of the Borrower's fiscal year ended at the end of such quarter, and the related consolidated statement of cash flows for the portion of the Borrower's fiscal year ended at the end of such quarter, prepared in conformity with generally accepted accounting principles;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of a Responsible Officer
(i) stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto, and (ii)
setting forth the Total Debt to Total Capitalization Ratio (as defined in
Section 5.9) as in effect on the last day of the immediately preceding fiscal
quarter of the Borrower and showing the calculation thereof in reasonable
detail;
(d) to the extent prepared or required by the Exchange Act to be prepared or filed, promptly after such preparation or the due date for such preparation or filing a consolidated balance sheet of each Guarantor and its Consolidated Subsidiaries as of the end of each fiscal year occurring prior to the Merger Date and the related consolidated statements of income and retained income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without material qualification by such Guarantor's independent public accountants who shall be of nationally recognized standing;
(e) to the extent prepared or required by the Exchange Act to be prepared or filed, promptly after such preparation or the due date for such preparation or filing a consolidated balance sheet of each Guarantor and its Consolidated Subsidiaries as of the end of each of the first three fiscal quarters (but only if such quarter end occurred prior to the Merger Date) of each fiscal year of such Guarantor and the related consolidated statements of income for such quarter and for the portion of such Guarantor's fiscal year ended at the end of such quarter, and the related consolidated statement of cash flows for the portion of such Guarantor's fiscal year ended at the end of such quarter;
(f) within five days after a Responsible Officer obtains knowledge of any Default, if such Default is then continuing, a certificate of a Responsible Officer setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; and
(g) from time to time such additional information regarding the financial position or business of the Borrower and its Subsidiaries as the Administrative Agent, at the request of any Bank, may reasonably request.
Section 5.2. Maintenance of Property; Insurance. (a) The Borrower will keep, and will cause each of its Domestic Subsidiaries (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted.
(b) The Borrower will, and will cause each of its Domestic Subsidiaries (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to, maintain (either in the name of the relevant Loan Party or in the relevant Domestic Subsidiary's own name) with financially sound and responsible insurance companies, insurance on all their respective properties in at least such amounts and against at least such risks (and with such risk retention) as are usually insured against in the same general area by companies of established repute of similar size engaged in the same or a similar business; and will furnish to the Banks, upon request from the Administrative Agent, information presented in reasonable detail as to the insurance so carried.
Section 5.3. Payment of Taxes and Assessments, Conduct of Business and Maintenance of Existence. (a) Subject to Section 1.5, the Borrower will, and will cause each Domestic Subsidiary thereof (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to, pay all taxes, assessments and governmental charges lawfully levied or assessed upon it, its property, or upon any part thereof or upon its income or profits, or any part thereof, before the same shall become delinquent, and will observe and conform to all lawful requirements of any governmental authority relative to any of its property, and all covenants, terms and conditions upon or under which any of its property is held; and within four months after receipt of notice of any lawful claims or demands for labor, materials or supplies or other objects which might become a lien or charge, material in amount, upon any Principal Property of the Borrower or any Domestic Subsidiary thereof or the income therefrom, it will pay or cause to be discharged to make adequate provision to satisfy and discharge the same; provided that nothing in this Section 5.3 or elsewhere in this Agreement contained shall require the Borrower or any Domestic Subsidiary thereof to observe or conform to any requirement of governmental authority or to cause to be paid or discharged, or to make provision for, any such claim, demand, lien or charge or to pay any such tax, assessment or governmental charge so long as the validity thereof shall be contested in good faith.
(b) Subject to the other provisions of this Agreement, the Borrower will, and will cause each Domestic Subsidiary thereof (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to, maintain its corporate or analogous existence and right to carry on its business and procure all necessary renewals and extensions thereof and use its best efforts to maintain, preserve and renew all such rights, powers, privileges and franchises; provided, however, that nothing herein contained shall be construed to prevent any Loan Party or a Domestic Subsidiary thereof from ceasing or omitting to exercise any rights, powers, privileges or franchises (including, in the case of such a Domestic Subsidiary, the corporate or analogous
existence thereof) which in the judgment of the Board of Directors of such Loan Party or any such Domestic Subsidiary can no longer be profitably exercised, or to prevent the liquidation of any such Domestic Subsidiary or the consolidation or merger of any such Domestic Subsidiary or Domestic Subsidiaries with or into any other such Domestic Subsidiary or Domestic Subsidiaries and/or any Loan Party.
Section 5.4. Compliance with Laws. The Borrower will comply, and cause each Domestic Subsidiary thereof (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to comply, in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, ERISA and the rules and regulations thereunder and Environmental Laws) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.
Section 5.5. Restrictions on Sale and Lease-Back Transactions. Subject to
Section 1.5, the Borrower will not, nor will it permit any Domestic Subsidiary
thereof to, enter into any arrangement with any person providing for the leasing
by the Borrower or any Domestic Subsidiary thereof of any Principal Property
(except for temporary leases for a term, including any renewal thereof, of not
more than three years and except for leases between the Borrower and a Domestic
Subsidiary or between Domestic Subsidiaries), which Principal Property has been
or is to be sold or transferred by the Borrower or such Domestic Subsidiary to
such person (herein referred to as a "Sale and Lease-back Transaction") unless
the net proceeds of such sale are at least equal to the fair value (as
determined by the Board of Directors of the Borrower) of such Principal Property
and either (a) the Borrower or such Domestic Subsidiary would be entitled,
pursuant to the provisions of (1) clause (i) of paragraph (a) of Section 5.6 or
(2) paragraph (b) of Section 5.6 hereof, to incur Debt secured by a mortgage on
the Principal Property to be leased without equally and ratably securing the
Notes, or (b) the Borrower shall, and in any such case the Borrower covenants
that it will, within 120 days of the effective date of any such arrangement (or
in the case of (ii) below, within six months thereafter pursuant to a firm
purchase commitment entered into within such 120-day period), apply or cause to
be applied an amount equal to the fair value (as so determined) of such
Principal Property (i) to the payment or other retirement of Funded Debt
incurred or assumed by the Borrower which ranks senior to or pari passu with the
Notes or of Funded Debt incurred or assumed by the Borrower or any Domestic
Subsidiary thereof (other than, in any case, Funded Debt owned by the Borrower
or any Domestic Subsidiary thereof) or (ii) to the purchase of Principal
Property (other than the Principal Property involved in such sale). For this
purpose, Funded Debt means any Debt which by its terms matures at or is
extendable or renewable at the sole option of the obligor without requiring the
consent of the obligee to a date more than 12 months after the date of the
creation of such Debt.
Section 5.6. Negative Pledge.
(a) Subject to Section 1.5, the Borrower will not, nor will it permit any Domestic Subsidiary thereof to, issue, assume or guarantee any Debt secured by any mortgage, security interest, pledge, lien or other encumbrance (hereinafter called "mortgage" or "mortgages") upon any Principal Property of the Borrower or of a Domestic Subsidiary thereof or upon any shares of
stock or indebtedness of any such Domestic Subsidiary (whether such Principal Property, shares of stock or indebtedness is now owned or hereafter acquired) without in any such case effectively securing, concurrently with the issuance, assumption or guaranty of any such Debt, the Notes (together with, if the Borrower shall so determine, any other indebtedness of or guaranteed by the Borrower or such Domestic Subsidiary ranking equally with or senior (whether by agreement or by structure) to the Notes and then existing or thereafter created) equally and ratably with such Debt; provided, however, that the foregoing restrictions shall not apply to:
(i) mortgages on any property acquired, constructed or improved by the
Borrower or any Domestic Subsidiary after the date of this Agreement which
are created or assumed contemporaneously with, or within 120 days after,
such acquisition, or completion of such construction or improvement, or
within six months thereafter pursuant to a firm commitment for financing
arranged with a lender or investor within such 120-day period, to secure or
provide for the payment of all or any part of the purchase price of such
property or the cost of such construction or improvement incurred after the
date of this Agreement or, in addition to mortgages contemplated by clauses
(ii) and (iii) below, mortgages on any property existing at the time of
acquisition thereof, provided that the mortgage shall not apply to any
property theretofore owned by any Loan Party or any such Domestic
Subsidiary other than, in the case of any such construction or improvement,
any theretofore unimproved real property on which the property so
constructed, or the improvement, is located;
(ii) mortgages on any property, shares of stock, or indebtedness existing, at the time of acquisition thereof from a Corporation which is merged with or into the Borrower or such Domestic Subsidiary;
(iii) mortgages on property of a Corporation existing at the time such Corporation becomes a Domestic Subsidiary;
(iv) mortgages to secure Debt of a Domestic Subsidiary of the Borrower to the Borrower or to another Domestic Subsidiary thereof;
(v) mortgages in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, to secure partial progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such mortgages;
(vi) mortgages on timberlands in connection with an arrangement under which the Borrower or a Domestic Subsidiary thereof is obligated to cut or pay for timber in order to provide the secured party with a specified amount of money, however determined;
(vii) mortgages securing tax-exempt Debt of the Borrower or its Domestic Subsidiaries; or
(viii) mortgages for the sole purpose of extending, renewing or replacing in whole or in part Debt secured by any mortgage referred to in the foregoing clauses (i) to (iv), inclusive, or in this clause (viii) or any mortgage (A) on property of Westvaco or any Domestic Subsidiary thereof existing on March 1, 1983, or (B) on property of Mead or any Subsidiary thereof existing on November 10, 2000, provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the mortgage so extended, renewed or replaced (plus improvements on such property).
(b) The provisions of subsection (a) of this Section 5.6 shall not apply to the issuance, assumption or guarantee by the Borrower or any Domestic Subsidiary thereof of Debt secured by a mortgage which would otherwise be subject to the foregoing restrictions up to an aggregate amount which, together with all other Debt of the Borrower and its Domestic Subsidiaries secured by mortgages (other than mortgages permitted by subsection (a) of this Section 5.6) which would otherwise be subject to the foregoing restrictions and the Value of all Sale and Lease-back Transactions (as defined in Section 5.5) of the Borrower and its Domestic Subsidiaries in existence at such time (other than any such Sale and Lease-back Transaction which, if such Sale and Lease-back Transaction had been a mortgage, would have been permitted by clause (i) of Section 5.6(a) and other than any such Sale and Lease-back Transactions as to which application of amounts have been made in accordance with clause (b) of Section 5.5) does not at the time exceed 5% of Consolidated Net Tangible Assets of the Borrower.
The term "Value" shall mean, with respect to a Sale and Lease-back Transaction, as of any particular time, the amount equal to the greater of (1) the net proceeds from the sale or transfer of the property leased pursuant to such Sale and Lease-back Transaction or (2) the fair value in the opinion of the Board of Directors of the Borrower of such property at the time of entering into such Sale and Lease-back Transaction, in either case divided first by the number of full years of the term of the lease and then multiplied by the number of full years of such term remaining at the time of determination, without regard to any renewal or extension options contained in the lease.
(c) If at any time the Borrower or any Domestic Subsidiary thereof shall issue, assume or guarantee any Debt secured by any mortgage and if paragraph (a) of this Section 5.6 requires that the Notes be secured equally and ratably with such Debt, the Borrower will promptly deliver to the Administrative Agent
(i) an officer's certificate stating that the covenant of the Borrower contained in paragraph (a) of this Section 5.6 has been complied with; and
(ii) an opinion of counsel to the effect that such covenant has been complied with, and that any instruments executed by the Borrower and each Domestic Subsidiary thereof in the performance of such covenant comply with the requirements of such covenant.
Section 5.7. Consolidations, Mergers, Sales of Assets and Issuances of Capital Stock of the Guarantors. (a) Subject to Section 1.5, the Borrower shall not (1) consolidate with or merge into any other Corporation, (2) permit any Guarantor to consolidate with or merge into any other Corporation (other than another Loan Party), (3) convey, transfer or lease its properties and assets substantially as an entirety to any Person (other than another Loan Party), (4) permit the Guarantors, taken as a whole, to convey, transfer or lease their properties and assets substantially as an entirety to any Person (other than the Borrower), or (5) permit any Guarantor to issue any capital stock to any Person (other than the Borrower or another Guarantor), unless in any such case referred to in clauses (1) - (5), (i) immediately after giving effect to such transaction, no Default shall have happened and be continuing, and (ii) the Borrower has delivered to the Administrative Agent an officer's certificate and an opinion of counsel, each stating that such consolidation, merger, conveyance, transferor lease and supplemental agreement comply with this Section 5.7 and that all conditions precedent herein provided for relating to such transaction have been complied with, and:
(A) in each such case referred to in clause (1) or (3) above, the Corporation formed by such consolidation or into which the Borrower is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Borrower substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an agreement supplemental hereto, executed and delivered to the Administrative Agent, in form satisfactory to the Required Banks, the due and punctual payment of the principal of (and premium, if any) and interest on all the Notes and the performance of every covenant of this Agreement on the part of the Borrower to be performed or observed;
(B) in each such case referred to in clauses (2) or (4) above, either
(x) immediately after giving effect to each such merger, consolidation,
conveyance, transfer or lease, the Borrower and the Guarantors (excluding
the Guarantor subject to any merger or consolidation referred to in clause
(2) above), taken as a whole, would hold property and assets constituting
not less than a Material Portion of the property and assets of the Borrower
and the Guarantors (including the Guarantor subject to any merger or
consolidation referred to in clause (2) above), taken as a whole,
immediately before giving effect to such merger or consolidation; for
purposes of paragraphs (B) and (C) of this subsection (a), "Material
Portion" means, that portion of the properties or assets of any Person
(including a group of Persons taken as a whole) that would, if such Person
were to convey, transfer or lease any property or asset, be required to be
retained by such Person so as not to cause such conveyance, transfer or
lease to be characterized as the conveyance, transfer or lease of all or
substantially all of such Person's properties or assets, or (y) the
successor to any such merger, consolidation, conveyance, transfer or lease
is a direct wholly-owned Domestic Subsidiary of the Borrower and assumes by
an agreement supplemental to the Guarantee Agreement and in form and
substance satisfactory to the Administrative Agent the
obligations of the Guarantor thereunder after which time such successor shall be a Guarantor for all purposes hereof and the other Loan Documents; and
(C) in any such case referred to in clause (5) above, either (x) immediately after giving effect to each such issuance, the Borrower and the Guarantors would hold property and assets (excluding the Unowned Percentage of the property and assets of each Guarantor) constituting not less than a Material Portion of the property and assets of the Borrower and the Guarantors, taken as a whole, immediately before giving effect to such issuance; for purposes of this paragraph (C), "Unowned Percentage" means, with respect to a Guarantor, the greater of (a) that percentage of the outstanding Voting Stock thereof that is not owned by the Borrower or another Guarantor, and (b) that percentage of the economic interests in such Guarantor represented by all of the capital stock thereof that is not owned by the Borrower or another Guarantor, or (y) the Person to whom such capital stock is issued is a direct wholly-owned Domestic Subsidiary of the Borrower and assumes by an agreement supplemental to the Guarantee Agreement and in form and substance satisfactory to the Administrative Agent the obligations of the Guarantor thereunder after which time such successor shall be a Guarantor for all purposes hereof and the other Loan Documents.
(b) Upon any consolidation by the Borrower with or merger by the Borrower into any other Corporation or any conveyance, transfer or lease of the properties and assets of the Borrower substantially as an entirety in accordance with Section 5.7, the successor Corporation formed by such consolidation or into which the Borrower is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Borrower under this Agreement with the same effect as if such successor Corporation had been named as the Borrower herein, and thereafter, except in the case of a lease, the predecessor Corporation shall be relieved of all obligations and covenants under this Agreement and the Notes.
(c) Subject to Section 1.5, the Borrower shall not, nor shall it permit any other Loan Party to, transfer any Principal Property thereof or any capital stock of any Guarantor to any one or more Subsidiaries of the Borrower or such Loan Party, whether now existing or hereafter acquired, other than transfers of any Principal Property from one Loan Party to another Loan Party.
Section 5.8. Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by the Borrower for its general corporate purposes. None of such proceeds will be used in violation of applicable law, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System of the United States of America, as such regulations are from time to time in effect and including all official rulings under, and interpretations of, such regulations.
Section 5.9. Total Debt to Total Capitalization Ratio. On and after the Closing Date, the Total Debt to Total Capitalization Ratio shall not exceed 0.55:1.00 at any time. For purposes of this Section:
"Total Debt to Total Capitalization Ratio" shall mean, as of any date,
the ratio, in each case with respect to the Borrower and its Consolidated
Subsidiaries on a consolidated basis, of (a) Total Debt as of such date to
(b) the sum of (i) the amount determined under clause (a) of this defined
term, plus (ii) the sum of shareholders' equity, plus (iii) deferred income
taxes, minus (iv) any noncash income (loss) attributable to interest rate
or currency hedging or derivative arrangements, as each may be set forth on
the consolidated balance sheet of the Borrower most recently delivered
pursuant to Section 5.1(a) or (b), as the case may be; and
"Total Debt" means without duplication (i) all Debt, (ii) all
obligations upon which interest charges are customarily paid, (iii) all
obligations under conditional sale or other title retention agreements
relating to property acquired, (iv) all obligations in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (v) all Total Debt of
others secured by (or for which the holder of such Total Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by the Borrower or any Consolidated Subsidiary,
whether or not the Total Debt secured thereby has been assumed, (vi) all
guarantees of Total Debt of others, (vii) all capital lease obligations,
(viii) all obligations, contingent or otherwise, of the Borrower and its
Consolidated Subsidiaries as an account party in respect of letters of
credit and letters of guaranty, (ix) all obligations to pay a specified
purchase price for goods or services which purchase price is payable
whether or not such goods or services are delivered or accepted, (x) all
obligations, contingent or otherwise, in respect of bankers' acceptances,
(xi) all Receivables Facility Attributed Indebtedness of the Borrower and
its Consolidated Subsidiaries on the date of determination regardless of
its treatment under generally accepted accounting principles, and (xii) to
the extent not otherwise included, all net obligations under hedging
agreements. The Total Debt of any Person shall include the Total 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 Total Debt provide that such
Person is not liable therefor. Notwithstanding the foregoing, the Total
Debt of any Person shall not include (i) Defeased Debt, and (ii) guarantees
of the Cabin Bluff Notes so long as (a) the Borrower or any Domestic
Subsidiary thereof received cash in an amount equal to no less than the
fair market value of the Cabin Bluff Notes on the date of such receipt, and
(b) the Borrower has the ability to cause the extinguishment of all
liability under any such guarantee by the exercise of any right to "put"
the Cabin Bluff Notes to the holder or holders of the indebtedness so
guaranteed.
Section 5.10. Amendment to Documents. The Borrower shall not, nor shall it permit any other Loan Party to, amend, supplement or otherwise modify the Merger Agreement as in effect
on and as of the date hereof, other than in connection with any such amendment, supplement or modification thereto that would not materially and adversely affect the interests of the Banks under the Loan Documents.
Section 5.11. Incorporation by Reference. Sections 5.5, 5.6, 5.7 and 5.9 of the Westvaco Credit Agreement, Sections 6.10 through and including 6.15 of the Mead 364-Day Credit Agreement and Sections 6.10 through and including 6.15 of the Mead 5-Year Credit Agreement are hereby incorporated by reference herein (collectively, the "Incorporated Covenants"); provided that the transactions contemplated by the Merger Agreement as in effect on the date hereof shall be deemed not to violate any such Incorporated Covenants.
ARTICLE 6.
DEFAULTS
Section 6.1. Events of Default. If one or more of the following events (each of the foregoing an "Event of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of or interest on any Money Market Loan, or shall fail to pay within five days of the due date thereof any principal of or interest on any Committed Loan, any fees or any other amount payable hereunder;
(b) any Loan Party shall fail to observe or perform any covenant or agreement contained in any Loan Document (other than those covered by clause (a) above) for 60 days after written notice thereof has been given to the Borrower by the Administrative Agent at the request of any Bank;
(c) any representation, warranty, certification or statement made by any Loan Party in any Loan Document or in any certificate, financial statement or other document delivered pursuant to any Loan Document shall prove to have been incorrect in any material respect when made (or deemed made);
(d) subject to Section 1.5, any Loan Party or any Domestic Subsidiary thereof shall fail to make any payment in respect of any Material Debt when due or within any applicable grace period;
(e) (i) an "Event of Default" under, and as such term is defined in, the Other Credit Agreement shall have occurred and be continuing, and such Event of Default results in the acceleration of the maturity of the notes thereunder or enables the lenders thereunder or the administrative agent thereunder to accelerate the maturity thereof, or (ii) subject to Section 1.5, any event or condition shall occur which results in the acceleration of the maturity of any Material Debt or enables (or, with the giving of notice or lapse of time or both, would enable) the holder of such Debt or any Person acting on such holder's behalf to accelerate the maturity thereof;
(f) any Loan Party or any Domestic Subsidiary thereof shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate or analogous action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced against any Loan Party or any Domestic Subsidiary thereof seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 90 days; or an order for relief shall be entered against any Loan Party or any Domestic Subsidiary thereof under the federal bankruptcy laws as now or hereafter in effect;
(h) subject to Section 1.5, on or after the Closing Date, any member of an ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $10,000,000 which it shall have become liable to pay under Title IV of ERISA or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of an ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan and such proceeding shall not have been dismissed within 30 days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of any ERISA Group to incur a current payment obligation in excess of $75,000,000;
(i) subject to Section 1.5, one or more judgments or orders for the payment of money in excess of $75,000,000 in the aggregate shall be rendered against any one or more of the Loan Parties or any one or more Domestic Subsidiaries thereof and such judgments or orders shall continue unsatisfied and unstayed for a period of 60 days;
(j) prior to and until the Closing Date, but in all cases subject to the last sentence of Section 1.4, one or more of the Incorporated Defaults shall have occurred and be continuing; or
(k) the Guarantee Agreement shall cease, for any reason, to be in full force and effect (other than pursuant to the terms and provisions of the Guarantee Agreement), or any Guarantor shall so assert in writing or shall disavow any of its obligations thereunder;
then, and in every such event, the Administrative Agent shall (i) if requested by Banks having more than 50% in aggregate amount of the Commitments, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, and (ii) if requested by Banks holding
Notes evidencing more than 50% in aggregate principal amount of the Loans, by notice to the Borrower declare the Notes (together with accrued interest thereon) to be, and the Notes shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided that in the case of any of the Events of Default specified in clause (f) or (g) above with respect to the Borrower or any Guarantor constituting a Significant Subsidiary, without any notice to the Borrower or any other act by the Administrative Agent or the Banks, the Commitments shall thereupon terminate and the Notes (together with accrued interest thereon) shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
Section 6.2. Notice of Default. The Administrative Agent shall give notice to the Borrower under Section 6.1(b) promptly upon being requested to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7.
THE AGENTS
Section 7.1. Appointment and Authorization. Each Bank irrevocably appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to such Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto.
Section 7.2. Agents and Affiliates. The Bank of New York shall have the same rights and powers under the Loan Documents as any other Bank and may exercise or refrain from exercising the same as though it were not an Agent, and The Bank of New York and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with any Loan Party or any Subsidiary or affiliate thereof as if it were not an Agent hereunder.
Section 7.3. Action by Agents. The obligations of the Agents hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, no Agent shall be required to take any action with respect to any Default, except in the case of the Administrative Agent as expressly provided in Article 6.
Section 7.4. Consultation with Experts. Each Agent may consult with legal counsel (who may be counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.
Section 7.5. Liability of Agents. Neither any Agent nor any of their respective affiliates nor any of the respective directors, officers, agents or employees of the foregoing shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither any Agent nor any of their respective affiliates nor any of the respective directors, officers, agents or employees of the foregoing shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of any Loan Party; (iii) the satisfaction of any condition specified in Article 3, except in the case of the Administrative Agent receipt of notice required to be given to such Agent; or (iv) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection herewith. No Agent shall incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex, facsimile or similar writing) believed by it to be genuine or to be signed by the proper party or parties. Without limiting the generality of the foregoing, the use of the term "agent" in the Loan Documents with reference to the Agents is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom and is intended to create or reflect only an administrative relationship between independent contracting parties.
Section 7.6. Indemnification. Each Bank shall, ratably in accordance with its Commitment, indemnify each Agent (to the extent not reimbursed by the Borrower or any other Loan Party) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such Agent's gross negligence or willful misconduct) that such Agent may suffer or incur in connection with the Loan Documents or any action taken or omitted by such Agent thereunder.
Section 7.7. Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon any Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon any Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents.
Section 7.8. Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Banks and the Borrower. Upon any such resignation, the Required Banks shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Banks, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $50,000,000. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent.
Section 7.9. Syndication Agent, Documentation Agents, Managing Agents and Co-Agents. Nothing, in this Agreement shall impose upon the Syndication Agent, in such capacity, the Documentation Agents, in such capacity, the Managing Agents, in such capacity, or the Co-Agents, in such capacity, any duties or obligations whatsoever.
ARTICLE 8.
CHANGE IN CIRCUMSTANCES
Section 8.1. Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period for any Fixed Rate Borrowing:
(a) the Administrative Agent is advised by the Reference Banks that deposits in dollars (in the applicable amounts) are not being offered to the Reference Banks in the relevant market for such Interest Period (and Required Banks have not advised the Administrative Agent in writing to the contrary), or
(b) in the case of a Committed Borrowing, Banks having 50% or more of the aggregate amount of the Commitments advise the Administrative Agent that the Adjusted London Interbank Offered Rate as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Banks of funding their Euro-Dollar Loans for such Interest Period, the Administrative Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Administrative Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Banks to make Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the Administrative Agent at least two Domestic Business Days before the date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, (i) if such Fixed Rate Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear interest for each day from and including the first day to but excluding the last day of the Interest Period applicable thereto at the Base Rate for such day.
Section 8.2. Illegality. If, on or after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, 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 Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify the Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Banks and the Borrower, whereupon until such Bank notifies the Borrower and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before giving any notice to the Administrative Agent pursuant to this Section, such Bank shall designate a different Euro-Dollar Lending Office
if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine that it may not lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower shall immediately prepay in full the then outstanding or principal amount of each such Euro-Dollar Loan, together with accrued interest thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount from such Bank (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate Loan.
Section 8.3. Increased Cost and Reduced Return. (a) If on or after (x) the date hereof, in the case of any Committed Loan or any obligation to make Committed Loans or (y) the date of the related Money Market Quote, in the case of any Money Market Loan, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, 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 Bank (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any tax, duty or other charge with respect to its Fixed Rate Loans, its Note or its obligation to make Fixed Rate Loans, or shall change the basis of taxation of payments to any Bank (or its Applicable Lending Office) of the principal of or interest on its Fixed Rate Loans or any other amounts due under this Agreement in respect of its Fixed Rate Loans or its obligation to make Fixed Rate Loans (except for changes in the rate of tax on the overall net income of such Bank or its Applicable Lending Office imposed by the jurisdiction in which such Bank's principal executive office or Applicable Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any Euro-Dollar Loan, any such requirement included in an applicable Euro-Dollar Reserve Percentage), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its Applicable Lending Office) or on the London interbank market any other condition affecting its Fixed Rate Loans, its Note or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its Note with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Administrative
Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, 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 any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has of would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank's obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Administrative Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section and setting forth a calculation in reasonable detail of the additional amount or amounts to be paid to it hereunder shall be conclusive if prepared in good faith and on a reasonable basis. In determining such amount, such Bank may use any reasonable averaging and attribution methods. Notwithstanding the foregoing subsections (a) and (b) of this Section 8.3, the Borrower shall only be obligated to compensate any Bank for any amount arising or accruing during (i) any time or period commencing on the date on which such Bank notifies the Administrative Agent and the Borrower that it proposes to demand such compensation and identifies to the Administrative Agent and the Borrower the statute, regulation or other basis upon which the claimed compensation is or will be based and (ii) any time or period during which such Bank did not know that such amount would arise or accrue because of the retroactive application of such statute, regulation or other basis.
Section 8.4. Base Rate Loans Substituted for Affected Fixed Rate Loans. If
(i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 8.2 or (ii) any Bank has demanded compensation under Section
8.3(a) and the Borrower shall, by at least five Euro-Dollar Business Days' prior
notice to such Bank through the Administrative Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as Euro-Dollar Loans shall be made instead as Base Rate Loans (on which interest and principal shall be payable contemporaneously with the related Fixed Rate Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments of principal which would otherwise be applied to repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans instead.
Section 8.5. Substitution or Removal of Bank. If any Bank has demanded compensation under Section 8.3, the Borrower shall have the right, with the assistance of the Administrative Agent, to seek a substitute bank or banks (which may be one or more of the Banks) to purchase the Note and assume the Commitment of such Bank. If any Bank becomes a Non-Consenting Bank, then the Borrower, at its sole expense (including the fees referred to in Section 9.6(b)) and effort or, shall have the right, within 45 days of the date such Bank became a Non-Consenting Bank (a) to seek a substitute bank or banks (which may be one or more of the Banks) to purchase the Note and assume the Commitment of such Bank, or (b) provided that no Default shall have occurred and be continuing, to remove such Bank as a "Bank" pursuant to this Section; provided that (i) if such Bank is a "Bank" under and as defined in the Other Credit Agreement, the Borrower must replace or remove such Bank as a "Bank" from the Other Credit Agreement pursuant to the terms of Section 8.5 thereof simultaneously with the replacement or removal of such Bank hereunder, and (ii) after giving effect to each removal of a Non-Consenting Bank, the sum of (A) a fraction (expressed as a percentage), the numerator of which is the Commitment of such Non-Consenting Bank, and the denominator of which is the sum of the aggregate Commitments existing at the time immediately prior to the removal of such Non-Consenting Bank, plus (B) with respect to each other Non-Consenting Lender removed in accordance with this Section since the Effective Date, the percentage calculated with respect thereto under the immediately preceding clause (A) at the time of the removal of such prior Non-Consenting Lender, shall not exceed 15%. A Non-Consenting Bank that has been duly selected by the Borrower to be removed shall be removed as a "Bank" effective upon (i) the delivery to the Administrative Agent and such Non-Consenting Bank of a written notice to such effect, (ii) the payment to the Administrative Agent, for the account of such Bank, of all outstanding principal of, and accrued interest on, such Bank's Loans and all accrued fees owing to such Bank hereunder, (iii) the payment to such Non-Consenting Bank of all other sums then due and payable thereto (including, without limitation, any sums that would be due to such Non-Consenting Bank under Article 8), and (iv) the simultaneous replacement or removal of such Bank as a "Bank" under and as defined in the Other Credit Agreement, at which time the Commitment of such Non-Consenting Bank shall automatically terminate and such Non-Consenting Bank shall no longer be a "Bank" under the Loan Documents (but shall continue to be entitled to the benefits of Sections 2.13, 8.3 and 9.3). In the event that (x) the Borrower or the Administrative Agent has requested the Banks to consent to a departure from or waiver of any provisions of the Loan Documents or agree to any amendment thereto and (y) Required Banks have agreed to such consent, waiver or amendment, then any Bank that does not agree to such consent, waiver or amendment (whether affirmatively or by failure to respond within five Domestic Business Days of a request therefor) shall be deemed a "Non-Consenting Bank".
ARTICLE 9.
MISCELLANEOUS
Section 9.1. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Administrative Agent, at its address or facsimile
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or facsimile number set forth in its Administrative Questionnaire or
(z) in the case of any party, such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Administrative
Agent and the Borrower. Each such notice, request or other communication shall
be effective when received at the address specified in this Section.
Section 9.2. No Waivers. No failure or delay by any Agent or Bank in exercising any right, power or privilege hereunder or under any Note shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 9.3. Expenses; Documentary Taxes; Indemnification. (a) The Borrower shall pay (i) all out-of-pocket expenses of the Agents, including fees and disbursements of special counsel for the Agents, in connection with the preparation and administration of each Loan Document, any waiver or consent thereunder or any amendment thereof or any Default or alleged Default, and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by any Agent or Bank, including fees and disbursements of counsel, in connection with such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. The Borrower shall indemnify each Bank against any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of the Loan Documents.
(b) The Borrower agrees to indemnify each Bank and its respective Affiliates and the respective directors, officers, employees, agents and advisors of such Bank and such Bank's Affiliates (each of the foregoing being an "Indemnified Person") and hold each Indemnified Person harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by such Indemnified Person (or by any Agent (together with its officers, directors, employees, agents and advisors and Affiliates) in connection with its actions as Agent hereunder) in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnified Person shall be designated a party thereto) relating to or arising out of the Loan Documents or any actual or proposed use of proceeds of Loans hereunder; provided that no Indemnified Person shall have the right to be indemnified hereunder for its own gross negligence or willful misconduct.
Section 9.4. Sharing of Set-Offs. Each Bank agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it (other than in the circumstances contemplated by Section 8.5) which is greater than the proportion received by any other Bank in respect of the aggregate amount of principal and interest due with respect to any Note held by such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Notes held by the other Banks, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Notes held by the Banks shall be shared by the Banks pro rata; provided that nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness under the Notes. The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Note, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation.
Section 9.5. Amendments and Waivers. Any provision of the Loan Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks (and, if the rights or duties of any Agent are affected thereby, by such Agent); provided that no such amendment or waiver shall (i) increase the Commitment of any Bank without the written consent of such Bank, (ii) reduce the principal of or rate of interest on any Loan or any fees hereunder without the written consent of each Bank affected thereby, (iii) postpone the date fixed for any payment of principal of or interest on any Loan or any fees hereunder without the written consent of each Bank affected thereby, (iv) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of this Agreement without the written consent of each Bank, (v) change any provision hereof in any manner that would alter the pro rata sharing of payments required by this Agreement or the Note without the written consent of each Bank, (vi) release any Guarantor from its guarantee obligations under the Guarantee Agreement (except as expressly provided in the Guarantee Agreement and except in connection with the merger, consolidation or transfer of all or substantially all of the assets of such Guarantor into a Loan Party as permitted under Section 5.7(a)) without the written consent of each Bank, (vii) waive any condition set forth in Section 3.1 or Section 3.2 without the written consent of each Bank, or (viii) change any provision of this Section without the written consent of each Bank.
Section 9.6. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that the Borrower may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of all Banks; and provided further that except as contemplated by sub-sections (b), (e) and (f) of this Section 9.6, by Section 9.4 and by the definition of Applicable Lending Office, no Bank may assign, grant participations in or otherwise transfer any of its rights or obligations under this Agreement.
(b) Any Bank may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it), provided that (i) except in the case of an assignment to a Bank or an Eligible Affiliate, each of the Borrower and the Administrative Agent must give its prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed), (ii) except in the case of an assignment to a Bank or an Eligible Affiliate or an assignment of the entire remaining amount of the assigning Bank's Commitment, or unless the Borrower and the Administrative Agent shall otherwise consent, the amount of the Commitment of the assigning Bank subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than (A) $1,000,000, and (B) when aggregated with the amount, if any, of the "Commitment" (under and as defined in the Other Credit Agreement) of the assigning Bank being assigned substantially simultaneously therewith, $10,000,000, (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance together with, unless otherwise agreed by the Administrative Agent, a processing and recordation fee of $3,500, and (iv) the assignee, if it shall not be a Bank, shall deliver to the Administrative Agent an Administrative Questionnaire, and provided further, that any consent of the Borrower otherwise required under this paragraph shall not be required if a Default has occurred and is continuing. Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Bank under the Agreement, and the assigning Bank thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under the Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Bank's rights and obligations under the Agreement, such Bank shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.13, 8.3, and 9.3). Any assignment or transfer by a Bank of rights or obligations under the Agreement that does not comply with this paragraph or paragraph (f) shall be treated for purposes of the Agreement as a sale by such Bank of a participation in such rights and obligations in accordance with paragraph (e) of this Section. For purposes of this Section 9.6(b), "Eligible Affiliate" means, with respect to any Bank, any Affiliate hereof that has combined capital and surplus of at least $250,000,000.
(c) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in New York City a copy of each Assignment and Acceptance and each notice of removal of a Bank under Section 8.5 delivered to it and a register for the recordation of the names and addresses of the Banks, and the Commitment of, and principal amount of the Loans owing to, each Bank pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive absent clearly demonstrable error, and the Borrower and each Bank and the Administrative Agent may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Bank and the Administrative Agent, at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Bank and an assignee, the assignee's completed Administrative Questionnaire (unless
the assignee shall already be a Bank hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. Upon the effectiveness of any removal of a Bank pursuant to Section 8.5, the Administrative Agent shall record the relevant information in the Register. No assignment shall be effective, and no removal of Bank shall be effective, for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(e) Any Bank may at any time grant to one or more banks or other institutions (each a "Participant") participating interests in any of its Loans. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Administrative Agent, the Borrower and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i) through (viii) of Section 9.5 without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Article 8 with respect to its participating interest.
(f) Any Bank may at any time assign as collateral security all or any portion of its rights under this Agreement and its Note, including without limitation to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its obligations hereunder.
(g) No Participant in any Bank's Loans shall be entitled to receive any greater payment under Section 8.3 than such Bank would have been entitled to receive.
Section 9.7. Collateral. Each of the Banks represents to each Agent and each of the other Banks that it in good faith is not relying upon any "margin stock" (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement.
Section 9.8. New York Law. This Agreement and each Note shall be construed in accordance with and governed by the law of the State of New York.
Section 9.9. Jurisdiction; Consent to Service of Process
(a) The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to the Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that, to the extent permitted by applicable law, all claims in respect of any
such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any Agent or any Bank may otherwise have to bring any action or proceeding relating to the Loan Documents against the Borrower, or any of its property, in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the Loan Documents in any court referred to in paragraph (a) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
Section 9.10. Jury Trial
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 9.11. Counterparts; Integration. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.
MW HOLDING CORPORATION
(MEADWESTVACO CORPORATION)
FIVE-YEAR CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
MW HOLDING CORPORATION
By: /s/ * ----------------------------------------------- |
Address: Mead World Headquarters Courthouse Plaza, N.E. Dayton, Ohio 45463 Facsimile: (937) 228-5555 |
On and after the Initial Transactions:
Address: One High Ridge Park Stamford, Connecticut 06905 Facsimile: (203) 461-7988 |
MW HOLDING CORPORATION
(MEADWESTVACO CORPORATION)
FIVE-YEAR CREDIT AGREEMENT
$41,250,000 THE BANK OF NEW YORK, as a Bank and as the Administrative Agent
By: /s/ * ----------------------------------------------- |
Address: One Wall Street, 22nd Floor New York, New York 10286 Attention: Eliza S. Adams Facsimile: (212) 635-1480 with a copy to Address: One Wall Street, 18th Floor New York, New York 10286 Attention: Steven Gazzillio Facsimile: (212) 635-6365, 6366, or 6367 MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $41,250,000 BANK ONE, NA By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $39,000,000 BANK OF AMERICA, N.A. By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $39,000,000 JP MORGAN CHASE BANK By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $39,000,000 CITICORP USA, INC. By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $25,000,000 BARCLAYS BANK PLC By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT |
$25,000,000 COMMERZBANK AG NEW YORK AND GRAND CAYMAN BRANCHES
By: /s/ * ----------------------------------------------- By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $25,000,000 FLEET NATIONAL BANK By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $25,000,000 THE BANK OF NOVA SCOTIA By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $25,000,000 WACHOVIA BANK By: /s/ * ---------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT |
$21,500,000 SUMITOMO MITSUI BANKING CORPORATION
By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $21,500,000 SUNTRUST BANK By: /s/ * ---------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT |
$15,000,000 BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ * --------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $15,000,000 BNP PARIBAS By: /s/ * ----------------------------------------------- By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $15,000,000 ING (U.S.) CAPITAL LLC By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $15,000,000 MELLON BANK NA By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $15,000,000 NATIONAL CITY BANK By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $15,000,000 THE NORTHERN TRUST COMPANY By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT |
$15,000,000 THE ROYAL BANK OF SCOTLAND PLC
By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $15,000,000 UBS AG, STAMFORD BRANCH By: /s/ * ----------------------------------------------- By: /s/ * ----------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) FIVE-YEAR CREDIT AGREEMENT $12,500,000 FIFTH THIRD BANK By: /s/ * ----------------------------------------------- |
* denotes execution by an authorized signatory of the respective party.
Exhibit 4.ii
$500,000,000
364-DAY CREDIT AGREEMENT
dated as of
December 21, 2001
among
MW HOLDING CORPORATION
(which, after the consummation of the Initial Transactions (as defined herein), shall be known as MeadWestvaco Corporation)
The Banks Listed Herein
THE BANK OF NEW YORK, as Administrative Agent,
BANK ONE, NA, as Syndication Agent,
JP MORGAN CHASE BANK, CITICORP USA, INC. and BANK OF AMERICA, N.A.,
as Documentation Agents,
BARCLAYS BANK PLC, COMMERZBANK AG NEW YORK AND GRAND CAYMAN BRANCHES,
FLEET NATIONAL BANK, THE BANK OF NOVA SCOTIA and
WACHOVIA BANK, as Managing Agents,
and
SUMITOMO MITSUI BANKING CORPORATION and SUNTRUST BANK, as Co-Agents
BNY CAPITAL MARKETS, INC. and BANC ONE CAPITAL MARKETS, INC.,
as Lead Arrangers and Book Runners
TABLE OF CONTENTS ARTICLE 1. DEFINITIONS.......................................................1 Section 1.1. Definitions............................................1 Section 1.2. Accounting Terms and Determinations...................12 Section 1.3. Types of Borrowing....................................12 Section 1.4. Incorporation by Reference............................12 Section 1.5. Default Exceptions.....................................12 ARTICLE 2. THE CREDITS......................................................13 Section 2.1. Commitments to Lend...................................13 Section 2.2. Notice of Borrowing...................................13 Section 2.3. Extension of Revolving Credit Period Expiration Date; Extension of Maturity Date....................13 Section 2.4. Notice to Banks; Funding of Loans.....................14 Section 2.5. Notes.................................................15 Section 2.6. Maturity of Loans.....................................15 Section 2.7. Interest Rates........................................15 Section 2.8. Fees..................................................17 Section 2.9. Optional Termination..................................17 Section 2.10. Mandatory Termination of Commitments.................17 Section 2.11. Optional Prepayments.................................18 Section 2.12. General Provisions as to Payments....................18 Section 2.13. Funding Losses.......................................18 Section 2.14. Computation of Interest and Fees.....................19 Section 2.15. Special Mandatory Payment/Commitment Termination......19 ARTICLE 3. CONDITIONS.......................................................20 Section 3.1 Effectiveness..........................................20 Section 3.2 Closing................................................20 Section 3.3. Borrowings............................................21 ARTICLE 4. REPRESENTATION AND WARRANTIES....................................22 Section 4.1. Corporate Existence and Power.........................22 Section 4.2. Corporate and Governmental Authorization..............22 Section 4.3. Binding Effect........................................22 Section 4.4. Financial Information.................................23 Section 4.5. Litigation............................................24 Section 4.6. Compliance with ERISA.................................24 Section 4.7. Subsidiaries..........................................24 Section 4.8. Not an Investment Company.............................25 i |
Section 4.9. Merger................................................25 ARTICLE 5. COVENANTS........................................................25 Section 5.1. Information...........................................25 Section 5.2. Maintenance of Property; Insurance....................26 Section 5.3. Payment of Taxes and Assessments, Conduct of Business and Maintenance of Existence...............26 Section 5.4. Compliance with Laws..................................27 Section 5.5. Restrictions on Sale and Lease-Back Transactions......27 Section 5.6. Negative Pledge.......................................28 Section 5.7. Consolidations, Mergers, Sales of Assets and Issuances of Capital Stock of the Guarantors........30 Section 5.8. Use of Proceeds.......................................32 Section 5.9. Total Debt to Total Capitalization Ratio...............32 Section 5.10. Amendment to Documents................................33 Section 5.11. Incorporation by Reference............................33 ARTICLE 6. DEFAULTS.........................................................33 Section 6.1. Events of Default.....................................33 Section 6.2. Notice of Default.....................................35 ARTICLE 7. THE AGENTS.......................................................35 Section 7.1. Appointment and Authorization.........................35 Section 7.2. Agents and Affiliates.................................35 Section 7.3. Action by Agents......................................35 Section 7.4. Consultation with Experts.............................36 Section 7.5. Liability of Agents...................................36 Section 7.6. Indemnification.......................................36 Section 7.7. Credit Decision.......................................36 Section 7.8. Successor Administrative Agent........................37 Section 7.9. Syndication Agent, Documentation Agents, Managing Agents and Co-Agents.......................37 ARTICLE 8. CHANGE IN CIRCUMSTANCES..........................................37 Section 8.1. Basis for Determining Interest Rate Inadequate or Unfair...........................................37 Section 8.2. Illegality............................................37 Section 8.3. Increased Cost and Reduced Return.....................38 Section 8.4. Base Rate Loans Substituted for Affected Euro-Dollar Loans...................................39 Section 8.5. Substitution or Removal of Bank.......................40 ii |
ARTICLE 9. MISCELLANEOUS....................................................41 Section 9.1. Notices...............................................41 Section 9.2. No Waivers............................................41 Section 9.3. Expenses; Documentary Taxes; Indemnification..........41 Section 9.4. Sharing of Set-Offs...................................42 Section 9.5. Amendments and Waivers................................42 Section 9.6. Successors and Assigns................................42 Section 9.7. Collateral............................................44 Section 9.8. New York Law..........................................44 Section 9.9. Jurisdiction; Consent to Service of Process............44 Section 9.10. Jury Trial............................................45 Section 9.11. Counterparts; Integration............................45 Exhibit A - Note Exhibit B - Form of Assignment and Acceptance Exhibit C - Form of Opinion of the Borrower's General Counsel Exhibit D - Form of Guarantee Agreement |
364-DAY CREDIT AGREEMENT, dated as of December 21, 2001, among MW HOLDING
CORPORATION (which, after the consummation of the Initial Transactions, shall be
known as MeadWestvaco Corporation), the BANKS listed on the signature pages
hereof, THE BANK OF NEW YORK, as Administrative Agent, BANK ONE, NA, as
Syndication Agent, JP MORGAN CHASE BANK, CITICORP USA, INC. and BANK OF AMERICA,
N.A., as Documentation Agents, BARCLAYS BANK PLC, COMMERZBANK AG NEW YORK AND
GRAND CAYMAN BRANCHES, FLEET NATIONAL BANK, THE BANK OF NOVA SCOTIA and WACHOVIA
BANK, as Managing Agents, and SUMITOMO MITSUI BANKING CORPORATION and SUNTRUST
BANK, as Co-Agents.
The parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Section 2. Definitions. The following terms, as used herein, have the following meanings:
"Adjusted London Interbank Offered Rate" has the meaning, set forth in
Section 2.7(b).
"Administrative Agent" means The Bank of New York in its capacity as Administrative Agent hereunder, and its successors in such capacity.
"Administrative Questionnaire" means, with respect to each Bank, an administrative questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including, with correlative meaning, the term "controlled"), as applied to any Person, means the possession, directly or indirectly, of the power to direct the management and policies of that Person, whether through the ownership of voting securities or otherwise.
"Agent" means the Administrative Agent, the Syndication Agent, the Documentation Agents, the Managing Agents or the Co-Agents, as the context may require.
"Applicable Lending Office" means, with respect to any Bank, (i) in the case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Applicable Percentage" means (i) with respect to Euro-Dollar Borrowings, at all times during which the applicable Pricing Level set forth below is in effect, the percentage set forth below for such Pricing Level under the heading "Euro-Dollar Margin" and (ii) with respect to the Facility Fee, at all times during which the applicable Pricing Level set forth below is in effect, the percentage set forth below for such Pricing Level under the heading "Facility Fee Rate":
====================================================== Pricing Euro-Dollar Facility Fee Levels Margin Rate ------------------------------------------------------ I 0.3100% 0.0650% ------------------------------------------------------ II 0.4200% 0.0800% ------------------------------------------------------ III 0.5250% 0.1000% ------------------------------------------------------ IV 0.6250% 0.1250% ------------------------------------------------------ V 0.8500% 0.1500% ------------------------------------------------------ VI 1.0625% 0.1875% ====================================================== |
Changes in the Applicable Percentage resulting from a change in the Pricing Level shall become effective on the effective date of any change in the Senior Unsecured Debt Rating from S&P or Moody's, as the case may be. Notwithstanding anything herein to the contrary, in the event that (A) the applicable Senior Unsecured Debt Ratings by S&P and Moody's are split-rated (i) by one rating category, the Pricing Level shall be determined by the higher of such two rating categories, and (ii) by more than one ratings category, the Pricing Level shall be one rating category below the higher of the two ratings categories, (B) either S&P or Moody's (but not both) shall no longer issue a rating for the Borrower's senior unsecured long-term debt, the Pricing Level shall be determined by the remaining Senior Unsecured Debt Rating, and (C) in the event that both S&P and Moody's shall no longer issue a rating for the Borrower's senior unsecured long-term debt unless and until the date, if any, that the Borrower and Required Lenders agree on a different arrangement, the existing Pricing Level shall continue in effect for the 60 day period immediately following such event and Pricing Level VI shall apply at all times after such period.
"Assignment and Acceptance" means an assignment and acceptance entered into by a Bank and an assignee (with the consent of any party whose consent is required by Section 9.6), and accepted by the Administrative Agent, substantially in the form of Exhibit B or any other form approved by the Administrative Agent.
"Bank" means each bank or financial institution listed on the signature pages hereof, and its successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Loan to be made by a Bank as a Base Rate Loan in accordance with the applicable Notice of Borrowing or pursuant to Article 8.
"Benefit Arrangement" means at any time an employee benefit plan within the meaning of Section 3 (3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of an ERISA Group.
"Borrower" means MW Holding Corporation (which, after the consummation of the Initial Transactions, shall be known as MeadWestvaco Corporation), a Delaware corporation, and its successors.
"Borrower Name Change" means the changing of the Borrower's name in the records of the Secretary of State of the State of Delaware from "MW Holding Corporation" to "MeadWestvaco Corporation".
"Borrowing" has the meaning, set forth in Section 1.3.
"Cabin Bluff Notes" means the Loan and Guaranty Agreement, dated as of August 23, 1998, among Cabin Bluff Partners, Mead and Scott Paper Company, as guarantors, and the Sumitomo Bank, Limited, New York Branch, or the Loan and Guaranty Agreement among Cabin Bluff Partners, Mead and Kimberly-Clark Corporation, as guarantors, the lenders party thereto, The Sumitomo Bank, Limited, New York Branch, as a lender and syndication agent, Bank of America, N.A. (successor to Bank of America National Trust and Savings Association), as a lender and documentation agent, and The Chase Manhattan Bank, as a lender and administrative agent, as the same or any substitute or replacement agreement may be amended, restated, modified or replaced from time to time.
"Closing Date" means the date upon which all of the conditions set forth in
Section 3.2 shall be satisfied (or waived in accordance with Section 9.5).
"Co-Agents" means Sumitomo Mitsui Banking Corporation and Suntrust Bank in their capacity as Co-Agents hereunder, and their respective successors in such capacity.
"Commitment" means, with respect to each Bank, the amount set forth opposite the name of such Bank on the signature pages hereof, as such amount may be changed from time to time pursuant to Sections 2.9, 2.10, 8.5 and 9.6.
"Consolidated Net Tangible Assets" means the total of all the assets appearing on the consolidated balance sheet of the Borrower and its Consolidated Subsidiaries less the following:
(1) current liabilities, including liabilities for indebtedness maturing more than 12 months from the date of the original creation thereof but maturing, within 12 months from the date of determination;
(2) reserves for depreciation and other asset valuation reserves;
(3) intangible assets such as goodwill, trademarks, trade names, patents, and unamortized debt discount and expense carried as an asset on said balance sheet; and
(4) appropriate adjustments on account of minority interests of other persons holding stock in any Subsidiary of the Borrower.
Consolidated Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Borrower and its Subsidiaries are engaged and which are approved by the independent accountants regularly
retained by the Borrower, and may be determined as of a date not more than sixty days prior to the happening of the event for which such determination is being made.
"Consolidated Subsidiary" means at any date and with respect to any Loan Party any Subsidiary of such Loan Party or other entity the accounts of which would be consolidated with those of such Loan Party in its consolidated financial statements if such statements were prepared as of such date.
"Corporation" includes corporations, partnerships, associations, companies and business trusts.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, and
(iii) all Debt of others guaranteed directly or indirectly by such Person.
"Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.
"Defeased Debt" means any Debt which has been defeased (a)(i) in accordance with generally accepted accounting principles or (ii) pursuant to the deposit of
cash, or debt securities backed by the full faith and credit of the United States, in either case in an amount sufficient to satisfy all such Debt at maturity or redemption, as applicable, and all payments of interest and premium, if any, in a trust or account created or pledged for the sole benefit of the holders of such Debt, and subject to no other Lien, and (b) in accordance with the other applicable terms of the instrument governing such Debt.
"Documentation Agents" means JP Morgan Chase Bank, Citicorp USA, Inc. and Bank of America, N.A. in their capacity as Documentation Agents hereunder, and their respective successors in such capacity.
"Domestic Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent.
"Domestic Subsidiary" means, with respect to any Loan Party, any Subsidiary thereof which owns a Principal Property.
"Effective Date" means the date this Agreement becomes effective in accordance with Section 3.1.
"Effective Time" has the meaning set forth in the Merger Agreement as in effect on the date hereof.
"Environmental Laws" means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means any Loan Party, any Subsidiary thereof and all members of a controlled group of Corporations and all trades or businesses (whether or not incorporated) under common control which, together with such Loan Party or any Subsidiary thereof, are treated as a single employer under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Loan to be made by a Bank as a Euro-Dollar Loan in accordance with the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.7(b).
"Event of Default" has the meaning set forth in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day, provided that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day, and (ii) if no such rate is so published on such next succeeding Domestic Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.
"Guarantee Agreement" means the guarantee agreement of Mead and Westvaco, substantially in the form of Exhibit D hereto.
"Guarantors" means each of Mead and Westvaco from the Effective Date to but excluding the date, if any, as it shall be released from its obligations under
and in accordance with the Guarantee Agreement, together with any other Person that shall become a Guarantor in accordance with this Agreement, and "Guarantor" means any one of them.
"Incorporated Covenants" has the meaning set forth in Section 5.11.
"Incorporated Default" means (a) any "Event of Default" within the meaning of clauses (a), (d), (e), (h), or (i) of Section 6.1 of the Westvaco Credit Agreement, (b) any "Default" within the meaning of Sections 7.2, 7.5, 7.8, 7.9, 7.10 or 7.11 of the Mead 364-Day Credit Agreement, or (c) any "Default" within the meaning of Sections 7.2, 7.5, 7.8, 7.9, 7.10 or 7.11 of the Mead 5-Year Credit Agreement.
"Initial Transaction Documents" means (i) the Merger Agreement, and (ii) each other agreement, instrument or other document executed or delivered in connection therewith, including all approvals and consents obtained, and all legal opinions delivered, in connection with the Initial Transactions.
"Initial Transactions" means (i) the Mead Merger, (ii) the Westvaco Merger,
(iii) the Borrower Name Change, and (iv) each other transaction contemplated by
the Initial Transaction Documents to occur on or about the Merger Date.
"Interest Period" means: (1) with respect to each Euro-Dollar Borrowing, the period commencing on the date of such Borrowing and ending one, two, three or six months thereafter, as the Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls (i) after the Maturity Date, or (ii) in another calendar month, in either of which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date of such Borrowing and ending 30 days thereafter; provided that: (a) any Interest Period (other than an Interest Period determined pursuant to clause (b) below) which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding, Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the Maturity Date shall end on the Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, or any successor statute.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Loans" means Base Rate Loans or Euro-Dollar Loans or any combination of the foregoing.
"Loan Documents" means the Agreement, the Notes and the Guarantee Agreement, and "Loan Document" means any one of them.
"Loan Parties" means the Borrower and the Guarantors, and "Loan Party" means any one of them.
"London Interbank Offered Rate" has the meaning set forth in Section 2.7(b).
"Managing Agents" means Barclays Bank plc, Commerzbank AG New York and Grand Cayman Branches, Fleet National Bank, The Bank of Nova Scotia and Wachovia Bank in their capacity as Managing Agents hereunder, and their respective successors in such capacity.
"Material Debt" means Debt (other than the Notes) of the Borrower and/or one or more of its Domestic Subsidiaries, arising in one or more related or unrelated transactions, in an aggregate principal amount exceeding $75,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $75,000,000.
"Maturity Date" means the Revolving Credit Period Expiration Date or, if the Borrower has duly extended the Maturity Date in accordance with Section 2.3(b), the Repayment Extension Date.
"Mead" means The Mead Corporation, an Ohio corporation.
"Mead Merger" means the merger of Mead into Michael Merger Sub with Mead as the surviving corporation, in accordance with the terms of the Merger Agreement as in effect on and as of the date hereof.
"Mead 364-Day Credit Agreement" means the 364-Day Credit Agreement, dated as of November 10, 2000, among Mead, the institutions from time to time parties thereto as "Lenders", Morgan Guaranty Trust Company of New York, as administrative agent, Bank One, NA, as syndication agent, and Bank of America, N.A., as documentation agent, as amended, supplemented or otherwise modified.
"Mead 5-Year Credit Agreement" means 5-Year Credit Agreement, dated as of November 10, 2000, among Mead, the institutions from time to time parties thereto as "Lenders", Morgan Guaranty Trust Company of New York, as administrative agent, Bank One, NA, as syndication agent, and Bank of America, N.A., as documentation agent, as amended, supplemented or otherwise modified.
"Mead's 2000 Form 10-K" means Mead's annual report on Form 10-K for 2000, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of August 21, 2001, by and among the Borrower, Michael Merger Sub, William Merger Sub, Mead and Westvaco, as the same may be amended, supplemented or otherwise modified from time to time.
"Merger Date" means the Closing Date as such term is defined in the Merger Agreement.
"Michael Merger Sub" means Michael Merger Sub Corporation, a Delaware corporation.
"Moody's" means Moody's Investors Service, Inc., or any successor thereto.
"mortgage" has the meaning set forth in Section 5.6.
"Multiemployer Plan" means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of an ERISA Group has an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of such ERISA Group during such five year period.
"Notes" means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.2.
"Other Credit Agreement" means the Five-Year Credit Agreement, dated as of the date hereof, among the Borrower, the lenders listed therein, The Bank of New
York, as administrative agent, Bank One, NA, as syndication agent, JP Morgan Chase Bank, Citicorp USA, Inc. and Bank of America, N.A., as documentation agents, Barclays Bank plc, Commerzbank AG New
York and Grand Cayman Branches, Fleet National Bank, The Bank of Nova Scotia and Wachovia Bank, as managing agents, and Sumitomo Mitsui Banking Corporation and Suntrust Bank, as co-agents, as amended, supplemented or otherwise modified.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Participant" has the meaning set forth in Section 9.6(e).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any member of any ERISA Group for employees of any member of such ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of such ERISA Group for employees of any Person which was at such time a member of such ERISA Group.
"Pricing Level I" will be applicable for so long as the Senior Unsecured Debt Rating is A or higher by S&P or A2 or higher by Moody's.
"Pricing Level II" will be applicable for so long as the Senior Unsecured Debt Rating is A- or higher by S&P or A3 or higher by Moody's and Pricing Level I is not applicable.
"Pricing Level III" will be applicable for so long as the Senior Unsecured Debt Rating is BBB+ or higher by S&P or Baa1 or higher by Moody's and neither Pricing Level I nor II is applicable.
"Pricing Level IV" will be applicable for so long as the Senior Unsecured Debt Rating is BBB or higher by S&P or Baa2 or higher by Moody's and none of Pricing Levels I, II or III are applicable.
"Pricing Level V" will be applicable for so long as the Senior Unsecured Debt Rating is BBB- or higher by S&P or Baa3 or higher by Moody's and none of Pricing Levels I, II, III or IV are applicable.
"Pricing Level VI" will be applicable for so long as the Senior Unsecured Debt Rating is less than or equal to BB+ by S&P or less than or equal to Ba1 by Moody's or none of Pricing Levels I, II, III, IV or V are applicable.
"Prime Rate" means the rate of interest publicly announced by the Administrative Agent in New York City from time to time as its prime commercial lending rate.
"Principal Property" means any mill, converting plant, manufacturing plant, manufacturing facility, including, in each case, the equipment therein, or timberlands, located within the continental United States of America (other than any of the foregoing acquired principally for the control or abatement of atmospheric pollutants or contaminants or water, noise, odor or other pollution, or any facility financed from the proceeds of pollution control or revenue bonds), whether owned at March 1, 1983 or thereafter acquired, having a gross book value (without deductions of any applicable depreciation reserves) on the date as of which the determination is being made of more than two percent of Consolidated Net Tangible Assets, but shall not include any minerals or mineral rights, or any timberlands designated by the Board of Directors of the Borrower or of a Domestic Subsidiary thereof, as the case may be, as being held primarily for development and/or sale.
"Prior Credit Agreements" means, collectively, (i) the Westvaco Credit Agreement, (ii) the Mead 364-Day Credit Agreement, and (iii) the Mead 5-Year Credit Agreement.
"Receivables Facility Attributed Indebtedness" means the amount of obligations outstanding under a receivables purchase facility on any date of determination that would be characterized as principal if such facility were structured as a secured lending transaction rather than as a purchase.
"Reference Banks" means the principal London offices of the Administrative Agent and the Syndication Agent.
"Refunding Borrowing" means a Borrowing which, after application of the proceeds thereof, results in no net increase in the outstanding principal amount of Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.
"Repayment Extension Date" has the meaning set forth in Section 2.3(b).
"Required Banks" means at any time Banks having, more than 50% of the aggregate amount of the Commitments or, if the Commitments shall have been terminated, holding Notes evidencing more than 50% of the aggregate unpaid principal amount of the Loans.
"Responsible Officer" means the chief executive officer, the chief financial officer, the chief accounting officer, the treasurer or the general counsel of the Borrower.
"Revolving Credit Period" means the period from and including the Closing Date to but excluding the Revolving Credit Period Expiration Date.
"Revolving Credit Period Expiration Date" means December 19, 2002, or any
subsequent date to which the Revolving Credit Period Expiration Date has been extended pursuant to the terms of Section 2.3(a), provided that if such day is not a Euro-Dollar Business Day, the
Revolving Credit Period Expiration Date shall instead be the next preceding Euro-Dollar Business Day.
"S&P" means Standard & Poor's Rating Group, a division of the McGraw-Hill Companies, or any successor thereto.
"Senior Unsecured Debt Ratings" means the Borrower's senior unsecured long-term debt ratings designated from time to time by S&P and Moody's.
"Significant Subsidiary" means any Subsidiary which is a "significant subsidiary" of the Borrower as defined in Rule 1-02 of Regulation S-X under the Securities Exchange Act of 1934.
"Subsidiary" means, with respect to any Loan Party, a Corporation more than 50% of the Voting Stock of which is owned or controlled, directly or indirectly, by such Loan Party or by one or more other Subsidiaries of such Loan Party, or by such Loan Party and one or more other Subsidiaries of such Loan Party.
"Syndication Agent" means Bank One, NA in its capacity as Syndication Agent hereunder, and its successors in such capacity.
"Unfunded Liabilities" means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of any ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"Voting Stock" means stock of the class or classes having general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a Corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).
"Westvaco" means Westvaco Corporation, a Delaware corporation.
"Westvaco Credit Agreement" means the Credit Agreement, dated as of November 16, 2000, among Westvaco, the lenders listed therein, The Bank of New York, as administrative agent, Bank of America, N.A., as documentation agent, and Citibank, N.A., as syndication agent, as the same may have been amended, supplemented or otherwise modified.
"Westvaco Merger" means the merger of Westvaco into William Merger Sub with Westvaco as the surviving corporation, in accordance with the terms of the Merger Agreement as in effect on and as of the date hereof.
"Westvaco's 2000 Form 10-K" means Westvaco's annual report on Form 10-K for 2000, as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"William Merger Sub" means William Merger Sub Corporation, a Delaware corporation.
Section 1.2. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the relevant Loan Party's independent public accountants) with the most recent audited consolidated financial statements of such Loan Party and its Consolidated Subsidiaries delivered to the Banks.
Section 1.3. Types of Borrowing. The term "Borrowing" denotes the aggregation of Loans of one or more Banks to be made to the Borrower pursuant to Article 2 on a single date and for a single Interest Period. Borrowings are classified for purposes of this Agreement by reference to the pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans).
Section 1.4. Incorporation by Reference. Provisions of the Mead 364-Day Credit Agreement, the Mead 5-Year Credit Agreement and the Westvaco Credit Agreement identified herein as the "Incorporated Defaults" and the "Incorporated Covenants" are incorporated by reference herein as if fully set forth herein, including the defined terms used in such Incorporated Defaults and Incorporated Covenants, in each case mutatis mutandis (such Incorporated Defaults, Incorporated Covenants and related defined terms being collectively referred to as the "Incorporated Provisions"). Under no circumstances shall an Incorporated Provision apply to any Person to which it would not otherwise apply pursuant to the terms of the applicable Prior Credit Agreement. Notwithstanding the fact that the Incorporated Provisions hereafter may be altered, amended, changed, extended, modified, restated, revised, supplemented or waived (collectively, "Amended or Waived") by the parties to the Mead 364-Day Credit Agreement, the Mead 5-Year Credit Agreement or the Westvaco Credit Agreement, such Incorporated Provisions shall not be Amended or Waived for purposes of this Agreement without the prior written consent of the Required Banks (as defined in this Agreement). If the Required Banks do not consent to any such alteration, amendment, change, extension, modification, restatement, revision, supplement or waiver (collectively, an "Amendment or Waiver") of any Incorporated Provision, such Incorporated Provision shall be in effect hereunder as it existed prior to such Amendment or Waiver. On and as of the Closing Date, the Incorporated Provisions shall cease to be incorporated herein by reference and shall be of no further force or effect, provided that any Default under an Incorporated Provision that existed immediately prior to the Closing Date shall continue hereunder until cured or waived under this Agreement.
Section 1.5. Default Exceptions. Any Default that, but for this Section 1.5, shall have occurred under Sections 5.3, 5.5, 5.6, 5.7, 6.1(d), 6.1(e)(ii),
6.1(h) or 6.1(i) prior to the Closing Date shall be deemed not to have occurred to the extent that the event, condition, action or
omission that caused such Default would not have caused a Default had such event, condition, action or omission occurred immediately after the consummation of the Initial Transactions.
ARTICLE 2.
THE CREDITS
Section 2.1. Commitments to Lend.
During the Revolving Credit Period each Bank severally agrees, on the terms and conditions set forth in this Agreement, to make loans to the Borrower pursuant to this Section from time to time in amounts such that the aggregate principal amount of Loans by such Bank at any one time outstanding shall not exceed the amount of its Commitment. Each Borrowing, under this Section shall be in an aggregate principal amount of $10,000,000 or any larger multiple of $1,000,000 (except that any such Borrowing may be in the aggregate amount available in accordance with Section 3.3(b)) and shall be made from the several Banks ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, repay, or to the extent permitted by Section 2.11, prepay Loans and reborrow at any time during the Revolving Credit Period under this Section.
Section 2.2. Notice of Borrowing. The Borrower shall give the Administrative Agent notice (a "Notice of Borrowing") not later than 10:00 A.M. (New York City time) on (x) the date of each Base Rate Borrowing and (y) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Euro-Dollar Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period.
Section 2.3. Extension of Revolving Credit Period Expiration Date; Extension of Maturity Date.
(a) Extension of Revolving Credit Period Expiration Date. Within the period beginning fifty-nine (59) days and ending thirty (30) days before the then effective Revolving Credit Period Expiration Date, the Borrower may request in writing that the Revolving Credit Period Expiration Date be extended for an additional period of 364 days, including the then effective Revolving Credit Period Expiration Date as one of the days. Within the later to occur of (i) twenty (20) days after such request, and (ii) 30 days prior to the then effective Revolving Credit Period Expiration Date, each Bank may, in its sole discretion, agree to such extension to a
new Revolving Credit Period Expiration Date not more than 364 days following the then effective Revolving Credit Period Expiration Date by giving written notice of such agreement to the Borrower and the Administrative Agent (and the failure to provide any such notice shall be deemed to be a decision not to extend). Any extension of the Revolving Credit Period Expiration Date shall not become effective until the Borrower and all of the Banks agree to any such extension.
(b) Extension of Maturity Date. Unless a Default shall have occurred and is continuing, effective upon the delivery by the Borrower to the Administrative Agent by no later than the seventh day prior to the then effective Revolving Credit Period Expiration Date of an express written notice (the "Extension Notice") that the Borrower intends to extend the Maturity Date to the date certain (the "Repayment Extension Date") set forth in such Extension Notice that
is not later than one year after the Revolving Credit Period Expiration Date, the Maturity Date shall be extended to such Repayment Extension Date. The delivery by the Borrower to the Administrative Agent of an Extension Notice shall constitute a representation and warranty by the Borrower that no Default then exists.
Section 2.4. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Administrative Agent shall promptly notify each Bank of the contents thereof and of such Bank's share (if any) of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of each Borrowing, each Bank participating therein shall (except as provided in subsection (c) of this Section) make available its share of such Borrowing, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address referred to in Section 9.1. Unless the Administrative Agent determines that any applicable condition specified in Article 3) has not been satisfied, the Administrative Agent will make the funds so received from the Banks available to the Borrower at the Administrative Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the Borrower is to repay all or any part of an outstanding Loan from such Bank, such Bank shall apply the proceeds of its new Loan to make such repayment and only an amount equal to the difference (if any) between the amount being borrowed and the amount being repaid shall be made available by such Bank to the Administrative Agent as provided in subsection (b), or remitted by the Borrower to the Administrative Agent as provided in Section 2.12, as the case may be.
(d) Unless the Administrative Agent shall have received notice from a Bank prior to the date of any Borrowing that such Bank will not make available to the Administrative Agent such Bank's share of such Borrowing, the Administrative Agent may assume that such Bank has made such share available to the Administrative Agent on the date of such Borrowing in accordance with subsections (b) and (c) of this Section 2.4 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such share available to the Administrative Agent, such Bank and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.7 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Bank's Loan included in such Borrowing for purposes of this Agreement. The provisions of this Section 2.4(d) shall not relieve any Bank of responsibility for its obligations under this Agreement or any default in the performance thereof.
Section 2.5. Notes. (a) The Loans of each Bank shall be evidenced by a single Note payable to the order of such Bank for the account of its Applicable Lending Office in an amount equal to the aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Administrative Agent, request that its Loans of a particular type be evidenced by a separate Note in an amount equal to the aggregate unpaid principal amount of such Loans. Each such Note shall be in substantially the form of Exhibit A hereto with appropriate modifications to reflect the fact that it evidences solely Loans of the relevant type. Each reference in this Agreement to the "Note" of such Bank shall be deemed to refer to and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.1(b), the Administrative Agent shall forward such Note to such Bank. Each Bank shall record the date, amount, type and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Bank so elects in connection with any transfer or enforcement of its Note, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the failure of any Bank to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required.
Section 2.6. Maturity of Loans. Each Loan included in any Borrowing shall mature, and the principal amount thereof shall be due and payable, on the last day of the Interest Period applicable to such Borrowing.
Section 2.7. Interest Rates. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day. Such interest shall be payable for each Interest Period on the last day thereof. Any overdue principal of or interest on any Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 1% plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding, principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the
Applicable Percentage plus the applicable Adjusted London Interbank Offered Rate. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof.
The "Adjusted London Interbank Offered Rate" applicable to any Interest Period means a rate per annum equal to the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period means the London interbank offered rate for deposits in U.S. dollars appearing on Reuters screen FRBD (or its successors) as of 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period, and having a maturity equal to such Interest Period, provided that, if no such London interbank offered rate is available to the Administrative Agent, the applicable London Interbank Offered Rate for the relevant Interest Period shall instead equal the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per annum at which deposits in dollars are offered to each of the Reference Banks in the London interbank market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of such Reference Bank to which such Interest Period is to apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement for a member bank of the Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of "Eurocurrency liabilities" (or in respect of any other category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Bank to United States residents). The Adjusted London Interbank Offered Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day from and including the date payment
thereof was due to but excluding the date of actual payment, at a rate per annum
equal to the sum of 1% plus the Applicable Percentage plus the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing (x)
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which one day (or, if such amount due remains
unpaid for more than three Euro-Dollar Business Days, then for such other period
of time not longer than six months as the Administrative Agent may select)
deposits in dollars in an amount approximately equal to such overdue payment due
to each of the Reference Banks are offered to such Euro-Dollar Reference Bank in
the London interbank market for the applicable period determined as provided
above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.1 shall exist, at a rate per annum equal to the sum of 1% plus the rate applicable to Base Rate Loans for such day).
(d) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder. The Administrative Agent shall give prompt notice to the Borrower and the participating Banks of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error.
(e) Each Reference Bank agrees to use its best efforts to furnish quotations to the Administrative Agent as contemplated by this Section. If any Reference Bank does not furnish a timely quotation, the Administrative Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Bank or Banks or, if none of such quotations is available on a timely basis, the provisions of Section 8.1 shall apply.
Section 2.8. Fees.
(a) Facility Fee. The Borrower shall pay to the Administrative Agent for the account of the Banks ratably a facility fee at a rate per annum equal to the Applicable Percentage. Such facility fee shall accrue (i) from and including the Merger Date to but excluding the Maturity Date, on the daily average aggregate amount of the Commitments (whether used or unused) and (ii) from and including the Maturity Date to but excluding the date the Loans shall be repaid in their entirety, on the daily average aggregate outstanding principal amount of the Loans.
(b) Utilization Fee. The Borrower shall pay to the Administrative Agent for the account of the Banks ratably in accordance with their Commitments a utilization fee at a rate per annum equal to 0.125% on the aggregate outstanding principal balance of the Loans for each day that such aggregate outstanding principal balance together with the aggregate outstanding principal balance of all loans under the Other Credit Agreement shall exceed 33.0% of the sum of aggregate Commitments and the aggregate commitments of the lenders under the Other Credit Agreement.
(c) Payments. Accrued fees under this Section shall be payable quarterly on each March 31, June 30, September 30 and December 31 and upon the date of termination of the Commitments in their entirety (and, if later, the date the Loans shall be repaid in their entirety) and upon each optional reduction of the Commitments.
Section 2.9. Optional Termination or Reduction of Commitments. Prior to the Maturity Date, the Borrower may, upon at least three Domestic Business Days' notice to the Administrative Agent, (i) terminate the Commitments at any time, if no Loans are outstanding at such time or (ii) ratably reduce from time to time by an aggregate amount of $5,000,000 or in an integral multiple of $1,000,000 in excess thereof, the aggregate amount of the Commitments in excess of the aggregate outstanding principal amount of the Loans.
Section 2.10. Mandatory Termination of Commitments. The Commitments shall terminate on the Maturity Date, and any Loans then outstanding (together with accrued interest thereon) shall be due and payable on such date.
Section 2.11. Optional Prepayments. (a) The Borrower may, upon (i) the same
Domestic Business Day's notice to the Administrative Agent, prepay any Base Rate
Borrowing or (ii) three Domestic Business Days' notice to the Administrative
Agent, prepay any Euro-Dollar Borrowing, in whole at any time, or from time to
time in part in amounts aggregating $5,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment and in the case of a prepayment of a
Euro-Dollar Borrowing, together with compensation therefor pursuant to Section
2.13. Each such optional prepayment shall be applied to prepay ratably the Loans
of the several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the Administrative Agent shall promptly notify each Bank of the contents thereof and of such Bank's ratable share (if any) of such prepayment and such notice shall not thereafter be revocable by the Borrower.
Section 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and of fees hereunder, not later than 12:00 Noon (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address referred to in Section 9.1. Except as otherwise provided in Section 8.5, the Administrative Agent will promptly distribute to each Bank its ratable share of each such payment received by the Administrative Agent for the account of the Banks. Whenever any payment of principal of, or interest on, the Base Rate Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Banks hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent that the Borrower shall not have so made such payment, each Bank shall repay to the Administrative Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Rate.
Section 2.13. Funding Losses. If the Borrower makes any payment of principal with respect to any Euro-Dollar Loan (pursuant to Article 6 or 8 or otherwise) on any day other than the last day of the Interest Period applicable thereto, or the last day of an applicable period fixed
pursuant to Section 2.7(c), or if the Borrower fails to borrow any Euro-Dollar Loans after notice has been given to any Bank in accordance with Section 2.4(a), the Borrower shall reimburse each Bank within 15 days after demand for any resulting loss or expense incurred by it (or by an existing or prospective Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after any such payment or failure to borrow, provided that such Bank shall have delivered to the Borrower a certificate as to the amount of such loss or expense, setting forth in reasonable detail the calculation thereof, which certificate shall be conclusive if prepared in good faith and on a reasonable basis.
Section 2.14. Computation of Interest and Fees. (a) Interest on Base Rate Borrowings shall be computed on the basis of a 365 or 366 day year for the actual number of days elapsed. Interest on Euro-Dollar Borrowings shall be computed on the basis of a 360 day year for the actual number of days elapsed.
(b) All fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).
Section 2.15. Special Mandatory Prepayment/Commitment Termination. If either of the events described in Sections 2.15(a) and 2.15(b) below (each a "Change in Control") occur, at any time during the 45 day period following the Event Date, Required Banks may determine to require a special mandatory prepayment of all Loans outstanding hereunder and terminate the Commitments of all of the Banks following 180 days notice to the Borrower. If the Required Banks shall make such a determination, on the 180th day following notice to the Borrower of such determination, all principal and accrued and unpaid interest and all accrued and unpaid fees and other sums then owing hereunder or under the Notes shall be immediately due and payable and the Commitments of all Banks hereunder shall terminate. Promptly after a Responsible Officer obtains knowledge of a Change of Control, the Borrower shall deliver to the Administrative Agent and each Bank written notice thereof, provided that with respect to a Change of Control referred to in Section 2.15(b), the knowledge of each Responsible Officer shall be limited to information pursuant to formal written notices delivered to the Borrower of which such Responsible Officer is aware and information in public securities law filings. The events which may permit such special mandatory prepayment and Commitment termination are:
(a) During any period of three consecutive years individuals who at the beginning of such period constituted the board of directors of the Borrower, together with any directors whose election or nomination for election by the Borrower's stockholders was approved by a vote of at least majority of the directors then still in office who were directors at the beginning of the period, cease for any reason to constitute a majority of the board of directors of the Borrower.
(b) Any person or group of persons (within the meaning of Section 13 and 14 of the Exchange Act) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under the Exchange Act) of Voting Securities of the Borrower representing in excess of 35% of the votes entitled to vote for the election of directors of the Borrower.
For purposes of this Section 2.15:
"Voting Securities" means all capital stock of the Borrower which is ordinarily entitled to vote for the election of directors.
"Event Date" means the date on which the Borrower notifies the Banks, in writing, that an event described in Section 2.15(a) or 2.15(b) above has occurred.
ARTICLE 3.
CONDITIONS
Section 3.1. Effectiveness. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied (or waived in accordance with Section 9.5 with the consent of each Loan Party):
(a) receipt by the Administrative Agent of counterparts hereof signed by each of the parties hereto (or, in the case of any party as to which an executed counterpart shall not have been received, receipt by the Administrative Agent in form satisfactory to it of telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party);
(b) receipt by the Administrative Agent for the account of each Bank of a duly executed Note dated on or before the Effective Date complying with the provisions of Section 2.5;
(c) receipt by the Administrative Agent of counterparts of the Guarantee Agreement signed by each of Mead and Westvaco; and
(d) receipt by the Administrative Agent of (i) evidence that, prior to or simultaneously with the Effective Date, the Other Credit Agreement shall have
become effective, and (ii) all documents it may reasonably request relating to the existence of the Borrower, the corporate authority of the Borrower or the validity of this Agreement and the Notes, and any other matters relevant hereto, all in form and substance satisfactory to the Administrative Agent;
provided that this Agreement shall not become effective or be binding on any party hereto unless not later than February 28, 2002 all of the foregoing conditions are satisfied (or waived in accordance with Section 9.5 with the consent of each Loan Party) and the Other Credit Agreement shall have become effective. The Administrative Agent shall promptly notify the Borrower and the Banks of the Effective Date, and such notice shall be conclusive and binding on all parties hereto.
Section 3.2. Closing. In addition to the requirements set forth in Sections 3.1 and 3.3, the obligation of each Bank to make a Loan is subject to the satisfaction (or waiver in accordance with Section 9.5 with the consent of each Loan Party) of the following conditions on or prior to the initial Borrowing:
(a) receipt by the Administrative Agent of an opinion of the General Counsel of the Borrower, substantially in the form of Exhibit C hereto, and covering such other matters relating to the Loan Parties, the Loan Documents and the Transactions as the Administrative Agent or Required Banks may reasonably request;
(b) consummation of the Initial Transactions in accordance with the terms and conditions of the Initial Transaction Documents, and the receipt by the Administrative Agent of a certificate, dated the Merger Date and signed by the chief executive officer or the chief financial officer of the Borrower, (i) certifying that the representations and warranties contained in Section 4.9 are true and correct and that no Default has occurred or is continuing, (ii) certifying, to the best knowledge of such officer, that the consummation of the Initial Transactions will not have any immediate adverse tax consequences to the Borrower and its Subsidiaries taken as a whole, and (iii) attaching a true, complete and correct copy of each Initial Transaction Document (including, without limitation, (A) a certificate of merger filed in, and certified by, the Secretary of State of Ohio reflecting the consummation of the Mead Merger, (B) a certificate of merger filed in, and certified by, the Secretary of State of Delaware reflecting the consummation of the Westvaco Merger, (C) the amended Articles of Incorporation of the Borrower filed in, and certified by, the Secretary of State of Delaware after giving effect to the Initial Transactions, and (D) the By-laws of the Borrower as in effect on the Merger Date, certified as such by the Secretary or Assistant Secretary of the Borrower after giving effect to the Initial Transactions), which in each case shall be in form and substance satisfactory to the Administrative Agent;
(c) receipt by the Administrative Agent of all documents it may reasonably request relating to the Initial Transactions, the existence of the Guarantors, their corporate authority or the validity of the Guaranty Agreement, and any other matters relevant hereto or thereto, all in form and substance satisfactory to the Administrative Agent; and
(d) the fact that any amounts outstanding under the Prior Credit Agreements, together with accrued interest and fees thereunder, shall have been paid in full, and all commitments to extend credit thereunder shall have been terminated;
provided that the foregoing conditions shall conclusively be deemed not to have been satisfied (in which event each Commitment hereunder shall automatically terminate) unless all of the foregoing conditions are satisfied (or waived in accordance with Section 9.5 with the consent of each Loan Party) not later than February 28, 2002. The Agent shall promptly notify the Borrower and the Banks of the Closing Date, and such notice shall be conclusive and binding on all parties hereto. The Borrower and the Banks party to the Prior Credit Agreements, to the extent that the Banks constitute "Required Banks" or "Required Lenders" thereunder, hereby agree that the commitments to extend credit thereunder shall terminate automatically upon the Closing Date.
Section 3.3. Borrowings. In addition to the requirements set forth in Sections 3.1 and 3.2, the obligation of any Bank to make a Loan on the occasion of any Borrowing is subject to the satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as required by Section 2.2 or 2.3, as the case may be;
(b) the fact that, immediately after such Borrowing, the aggregate outstanding principal amount of the Loans will not exceed the aggregate amount of the Commitments;
(c) the fact that, immediately after such Borrowing, no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of a Refunding Borrowing, the
representations and warranties set forth in Sections 4.4(c), (f) and (h) and
Section 4.5, in each case as to any matter which has theretofore been disclosed
in writing by the Borrower to the Banks) shall be true on and as of the date of
such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
Section 4.1. Corporate Existence and Power. Each Loan Party is a corporation validly existing and in good standing under the laws of the state of its formation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.
Section 4.2. Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party are within such Loan Party's corporate powers, have been authorized by all necessary corporate action, require no action by or in respect of, or (except for informational filings under section 13 or 15(d) of the Exchange Act) filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Loan Party or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Loan Party or result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
Section 4.3. Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrower and the Notes and the Guarantee Agreement, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of each Loan Party party thereto.
Section 4.4. Financial Information.
(a) The consolidated balance sheets of Westvaco and its Consolidated Subsidiaries as at October 31, 1999 and 2000, and the related consolidated statements of income and retained income and cash flows for each of the three years in the period ended October 31, 2000, reported on by PricewaterhouseCoopers and incorporated by reference in Westvaco's 2000 Form 10-K, a copy of which has been delivered to each of the Banks, present fairly, in all material respects, the consolidated financial position of Westvaco and its Consolidated Subsidiaries as at such dates and the results of their operations and their cash flows for each such year, in conformity with generally accepted accounting principles.
(b) The unaudited consolidated balance sheet of Westvaco and its Consolidated Subsidiaries as of July 31, 2001 and the related unaudited consolidated statements of income for the three and nine months ended July 31, 2001 and the unaudited consolidated statement of cash flows for the nine months ended July 31, 2001, set forth in Westvaco's quarterly report for the fiscal quarter ended July 31, 2001 as filed with the Securities and Exchange Commission on Form 10-Q, a copy of which has been delivered to each of the Banks, contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of Westvaco and its Consolidated Subsidiaries as of July 31, 2001 and the results of their operations for the three and nine months ended July 31, 2001 and their cash flows for the nine months ended July 31, 2001. These statements have been prepared on the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of Westvaco's 2000 Form 10-K.
(c) Since July 31, 2001, there has been no material adverse change in the business or financial position of Westvaco and its Consolidated Subsidiaries, considered as a whole, nor have any matters or occurrences come to any Loan Party's attention which are likely to cause any material adverse change in the business or financial position of Westvaco.
(d) The consolidated balance sheets of Mead and its Consolidated Subsidiaries as at December 31, 1999 and 2000, and the related consolidated statements of income and retained income and cash flows for each of the three years in the period ended December 31, 2000, reported on by Deloitte & Touche LLP and incorporated by reference in Mead's 2000 Form 10-K, a copy of which has been delivered to each of the Banks, present fairly, in all material respects, the consolidated financial position of Mead and its Consolidated Subsidiaries as at such dates and the results of their operations and their cash flows for each such year, in conformity with generally accepted accounting principles.
(e) The unaudited consolidated balance sheet of Mead and its Consolidated Subsidiaries as of September 30, 2001 and the related unaudited consolidated statements of income for the three and nine months ended September 30, 2001 and the unaudited consolidated statement of cash flows for the nine months ended September 30, 2001, set forth in Mead's quarterly report for the fiscal quarter ended September 30, 2001 as filed with the Securities and Exchange Commission on Form 10-Q, a copy of which has been delivered to each of the Banks, contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly
the financial position of Mead and its Consolidated Subsidiaries as of September 30, 2001 and the results of their operations for the three and nine months ended September 30, 2001 and their cash flows for the nine months ended September 30, 2001. These statements have been prepared on the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of Mead's 2000 Form 10-K.
(f) Since September 30, 2001, there has been no material adverse change in the business or financial position of Mead and its Consolidated Subsidiaries, considered as a whole, nor have any matters or occurrences come to any Loan Party's attention which are likely to cause any material adverse change in the business or financial position of Mead.
(g) The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at September 21, 2001, presents fairly, in all material respects, the consolidated financial position of the Borrower and its Consolidated Subsidiaries as at such date, in conformity with generally accepted accounting principles.
(h) Since September 21, 2001 and since the Merger Date, there has been no material adverse change in the financial position of the Borrower and its Consolidated Subsidiaries, considered as a whole, nor have any matters or occurrences come to the Borrower's attention which are likely to cause any material adverse change in the financial position of the Borrower.
Section 4.5. Litigation. There is no action, suit or proceeding pending against, or to the knowledge of any Loan Party threatened against, any Loan Party or any of such Loan Party's Subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business or consolidated financial position of such Loan Party and its
Consolidated Subsidiaries, considered as a whole, or which in any manner draws into question the validity of this Agreement, the Guarantee Agreement or the Notes.
Section 4.6. Compliance with ERISA. Each member of each ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code with respect to each Plan. No member of any ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which failure or amendment has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Internal Revenue Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA.
Section 4.7. Subsidiaries. Each Loan Party's Domestic Subsidiaries is a Corporation validly existing and in good standing under the laws of its jurisdiction of formation, and has all corporate or analogous powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.
Section 4.8. Not an Investment Company. No Loan Party is an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
Section 4.9. Merger. At the Effective Time (a) each of the Mead Merger, the
Westvaco Merger and the Borrower Name Change shall have occurred, (b) each of
Mead and Westvaco shall be a direct, wholly-owned Subsidiary of the Borrower,
(c) each of the Mead Merger and the Westvaco Merger was consummated in
accordance with the Merger Agreement, and (d) each condition precedent set forth
in Article VII of the Merger Agreement to the obligation of each party thereto
to effect the Mead Merger and the Westvaco Merger was satisfied (and not
waived), other than in connection with any such waiver thereof that would not
materially and adversely affect the interests of the Banks under the Loan
Documents.
ARTICLE 5.
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder or any amount payable under any Note remains unpaid:
Section 5.1. Information. The Borrower will deliver to each of the Banks:
(a) as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income and retained income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without material qualification by independent public accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated statements of income for such quarter and for the portion of the Borrower's fiscal year ended at the end of such quarter, and the related consolidated statement of cash flows for the portion of the Borrower's fiscal year ended at the end of such quarter, prepared in conformity with generally accepted accounting principles;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of a Responsible Officer
(i) stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto, and (ii)
setting forth the Total Debt to Total Capitalization Ratio (as defined in
Section 5.9) as in effect on the last day of the immediately preceding fiscal
quarter of the Borrower and showing the calculation thereof in reasonable
detail;
(d) to the extent prepared or required by the Exchange Act to be prepared or filed, promptly after such preparation or the due date for such preparation or filing a consolidated balance sheet of each Guarantor and its Consolidated Subsidiaries as of the end of each fiscal
year occurring prior to the Merger Date and the related consolidated statements of income and retained income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without material qualification by such Guarantor's independent public accountants who shall be of nationally recognized standing;
(e) to the extent prepared or required by the Exchange Act to be prepared or filed, promptly after such preparation or the due date for such preparation or filing a consolidated balance sheet of each Guarantor and its Consolidated Subsidiaries as of the end of each of the first three fiscal quarters (but only if such quarter end occurred prior to the Merger Date) of each fiscal year of such Guarantor and the related consolidated statements of income for such quarter and for the portion of such Guarantor's fiscal year ended at the end of such quarter, and the related consolidated statement of cash flows for the portion of such Guarantor's fiscal year ended at the end of such quarter;
(f) within five days after a Responsible Officer obtains knowledge of any Default, if such Default is then continuing, a certificate of a Responsible Officer setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; and
(g) from time to time such additional information regarding the financial position or business of the Borrower and its Subsidiaries as the Administrative Agent, at the request of any Bank, may reasonably request.
Section 5.2. Maintenance of Property; Insurance. (a) The Borrower will keep, and will cause each of its Domestic Subsidiaries (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted.
(b) The Borrower will, and will cause each of its Domestic Subsidiaries (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to, maintain (either in the name of the relevant Loan Party or in the relevant Domestic Subsidiary's own name) with financially sound and responsible insurance companies, insurance on all their respective properties in at least such amounts and against at least such risks (and with such risk retention) as are usually insured against in the same general area by companies of established repute of similar size engaged in the same or a similar business; and will furnish to the Banks, upon request from the Administrative Agent, information presented in reasonable detail as to the insurance so carried.
Section 5.3. Payment of Taxes and Assessments, Conduct of Business and Maintenance of Existence. (a) Subject to Section 1.5, the Borrower will, and will cause each Domestic Subsidiary thereof (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to, pay all taxes, assessments and governmental charges lawfully levied or assessed upon it, its property, or upon any part thereof or upon its income or profits, or any part thereof, before the same shall become delinquent, and will observe and conform to all lawful requirements of any governmental authority relative to any of its property, and all covenants, terms and conditions upon or under which any of its property is held; and within four months after receipt of notice of any lawful claims or demands for labor, materials or supplies or other
objects which might become a lien or charge, material in amount, upon any
Principal Property of the Borrower or any Domestic Subsidiary thereof or the
income therefrom, it will pay or cause to be discharged to make adequate
provision to satisfy and discharge the same; provided that nothing in this
Section 5.3 or elsewhere in this Agreement contained shall require the Borrower
or any Domestic Subsidiary thereof to observe or conform to any requirement of
governmental authority or to cause to be paid or discharged, or to make
provision for, any such claim, demand, lien or charge or to pay any such tax,
assessment or governmental charge so long as the validity thereof shall be
contested in good faith.
(b) Subject to the other provisions of this Agreement, the Borrower will, and will cause each Domestic Subsidiary thereof (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to, maintain its corporate or analogous existence and right to carry on its business and procure all necessary renewals and extensions thereof and use its best efforts to maintain, preserve and renew all such rights, powers, privileges and franchises; provided, however, that nothing herein contained shall be construed to prevent any Loan Party or a Domestic Subsidiary thereof from ceasing or omitting to exercise any rights, powers, privileges or franchises (including, in the case of such a Domestic Subsidiary, the corporate or analogous existence thereof) which in the judgment of the Board of Directors of such Loan Party or any such Domestic Subsidiary can no longer be profitably exercised, or to prevent the liquidation of any such Domestic Subsidiary or the consolidation or merger of any such Domestic Subsidiary or Domestic Subsidiaries with or into any other such Domestic Subsidiary or Domestic Subsidiaries and/or any Loan Party .
Section 5.4. Compliance with Laws. The Borrower will comply, and cause each Domestic Subsidiary thereof (and, prior to the Effective Time, each other Loan Party and its Domestic Subsidiaries) to comply, in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, ERISA and the rules and regulations thereunder and Environmental Laws) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.
Section 5.5. Restrictions on Sale and Lease-Back Transactions. Subject to
Section 1.5, the Borrower will not, nor will it permit any Domestic Subsidiary
thereof to, enter into any arrangement with any person providing for the leasing
by the Borrower or any Domestic Subsidiary thereof of any Principal Property
(except for temporary leases for a term, including any renewal thereof, of not
more than three years and except for leases between the Borrower and a Domestic
Subsidiary or between Domestic Subsidiaries), which Principal Property has been
or is to be sold or transferred by the Borrower or such Domestic Subsidiary to
such person (herein referred to as a "Sale and Lease-back Transaction") unless
the net proceeds of such sale are at least equal to the fair value (as
determined by the Board of Directors of the Borrower) of such Principal Property
and either (a) the Borrower or such Domestic Subsidiary would be entitled,
pursuant to the provisions of (1) clause (i) of paragraph (a) of Section 5.6 or
(2) paragraph (b) of Section 5.6 hereof, to incur Debt secured by a mortgage on
the Principal Property to be leased without equally and ratably securing the
Notes, or (b) the Borrower shall, and in any such case the Borrower covenants
that it will, within 120 days of the effective date of any such arrangement (or
in the case of (ii) below, within six months thereafter pursuant to a firm
purchase commitment entered into within such 120-day period), apply or cause to be applied an amount equal to the fair value (as so determined) of such Principal Property (i) to the payment or other retirement of Funded Debt incurred or assumed by the Borrower which ranks senior to or pari passu with the Notes or of Funded Debt incurred or assumed by the Borrower or any Domestic Subsidiary thereof (other than, in any case, Funded Debt owned by the Borrower or any Domestic Subsidiary thereof) or (ii) to the purchase of Principal Property (other than the Principal Property involved in such sale). For this purpose, Funded Debt means any Debt which by its terms matures at or is extendable or renewable at the sole option of the obligor without requiring the consent of the obligee to a date more than 12 months after the date of the creation of such Debt.
Section 5.6. Negative Pledge.
(a) Subject to Section 1.5, the Borrower will not, nor will it permit any Domestic Subsidiary thereof to, issue, assume or guarantee any Debt secured by any mortgage, security interest, pledge, lien or other encumbrance (hereinafter called "mortgage" or "mortgages") upon any Principal Property of the Borrower or of a Domestic Subsidiary thereof or upon any shares of stock or indebtedness of any such Domestic Subsidiary (whether such Principal Property, shares of stock or indebtedness is now owned or hereafter acquired) without in any such case effectively securing, concurrently with the issuance, assumption or guaranty of any such Debt, the Notes (together with, if the Borrower shall so determine, any other indebtedness of or guaranteed by the Borrower or such Domestic Subsidiary ranking equally with or senior (whether by agreement or by structure) to the Notes and then existing or thereafter created) equally and ratably with such Debt; provided, however, that the foregoing restrictions shall not apply to:
(i) mortgages on any property acquired, constructed or improved by the
Borrower or any Domestic Subsidiary after the date of this Agreement which
are created or assumed contemporaneously with, or within 120 days after,
such acquisition, or completion of such construction or improvement, or
within six months thereafter pursuant to a firm commitment for financing
arranged with a lender or investor within such 120-day period, to secure or
provide for the payment of all or any part of the purchase price of such
property or the cost of such construction or improvement incurred after the
date of this Agreement or, in addition to mortgages contemplated by clauses
(ii) and (iii) below, mortgages on any property existing at the time of
acquisition thereof, provided that the mortgage shall not apply to any
property theretofore owned by any Loan Party or any such Domestic
Subsidiary other than, in the case of any such construction or improvement,
any theretofore unimproved real property on which the property so
constructed, or the improvement, is located;
(ii) mortgages on any property, shares of stock, or indebtedness existing, at the time of acquisition thereof from a Corporation which is merged with or into the Borrower or such Domestic Subsidiary;
(iii) mortgages on property of a Corporation existing at the time such Corporation becomes a Domestic Subsidiary;
(iv) mortgages to secure Debt of a Domestic Subsidiary of the Borrower to the Borrower or to another Domestic Subsidiary thereof;
(v) mortgages in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, to secure partial progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such mortgages;
(vi) mortgages on timberlands in connection with an arrangement under which the Borrower or a Domestic Subsidiary thereof is obligated to cut or pay for timber in order to provide the secured party with a specified amount of money, however determined;
(vii) mortgages securing tax-exempt Debt of the Borrower or its Domestic Subsidiaries; or
(viii) mortgages for the sole purpose of extending, renewing or replacing in whole or in part Debt secured by any mortgage referred to in the foregoing clauses (i) to (iv), inclusive, or in this clause (viii) or any mortgage (A) on property of Westvaco or any Domestic Subsidiary thereof existing on March 1, 1983, or (B) on property of Mead or any Subsidiary thereof existing on November 10, 2000, provided, however, that the principal amount of Debt secured thereby shall not exceed the principal
amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the mortgage so extended, renewed or replaced (plus improvements on such property).
(b) The provisions of subsection (a) of this Section 5.6 shall not apply to the issuance, assumption or guarantee by the Borrower or any Domestic Subsidiary thereof of Debt secured by a mortgage which would otherwise be subject to the foregoing restrictions up to an aggregate amount which, together with all other
Debt of the Borrower and its Domestic Subsidiaries secured by mortgages (other than mortgages permitted by subsection (a) of this Section 5.6) which would otherwise be subject to the foregoing restrictions and the Value of all Sale and Lease-back Transactions (as defined in Section 5.5) of the Borrower and its Domestic Subsidiaries in existence at such time (other than any such Sale and Lease-back Transaction which, if such Sale and Lease-back Transaction had been a mortgage, would have been permitted by clause (i) of Section 5.6(a) and other than any such Sale and Lease-back Transactions as to which application of amounts have been made in accordance with clause (b) of Section 5.5) does not at the time exceed 5% of Consolidated Net Tangible Assets of the Borrower.
The term "Value" shall mean, with respect to a Sale and Lease-back Transaction, as of any particular time, the amount equal to the greater of (1) the net proceeds from the sale or transfer of the property leased pursuant to such Sale and Lease-back Transaction or (2) the fair value in the opinion of the Board of Directors of the Borrower of such property at the time of entering into such Sale and Lease-back Transaction, in either case divided first by the number of
full years of the term of the lease and then multiplied by the number of full years of such term remaining at the time of determination, without regard to any renewal or extension options contained in the lease.
(c) If at any time the Borrower or any Domestic Subsidiary thereof shall issue, assume or guarantee any Debt secured by any mortgage and if paragraph (a) of this Section 5.6 requires that the Notes be secured equally and ratably with such Debt, the Borrower will promptly deliver to the Administrative Agent
(i) an officer's certificate stating that the covenant of the Borrower contained in paragraph (a) of this Section 5.6 has been complied with; and
(ii) an opinion of counsel to the effect that such covenant has been complied with, and that any instruments executed by the Borrower and each Domestic Subsidiary thereof in the performance of such covenant comply with the requirements of such covenant.
Section 5.7. Consolidations, Mergers, Sales of Assets and Issuances of Capital Stock of the Guarantors. (a) Subject to Section 1.5, the Borrower shall not (1) consolidate with or merge into any other Corporation, (2) permit any Guarantor to consolidate with or merge into any other Corporation (other than another Loan Party), (3) convey, transfer or lease its properties and assets substantially as an entirety to any Person (other than another Loan Party), (4) permit the Guarantors, taken as a whole, to convey, transfer or lease their properties and assets substantially as an entirety to any Person (other than the Borrower), or (5) permit any Guarantor to issue any capital stock to any Person (other than the Borrower or another Guarantor), unless in any such case referred to in clauses (1) - (5), (i) immediately after giving effect to such transaction, no Default shall have happened and be continuing, and (ii) the Borrower has delivered to the Administrative Agent an officer's certificate and an opinion of counsel, each stating that such consolidation, merger, conveyance, transferor lease and supplemental agreement comply with this Section 5.7 and that all conditions precedent herein provided for relating to such transaction have been complied with, and:
(A) in each such case referred to in clause (1) or (3) above, the Corporation formed by such consolidation or into which the Borrower is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Borrower substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an agreement supplemental hereto, executed and delivered to the Administrative Agent, in form satisfactory to the Required Banks, the due and punctual payment of the principal of (and premium, if any) and interest on all the Notes and the performance of every covenant of this Agreement on the part of the Borrower to be performed or observed;
(B) in each such case referred to in clauses (2) or (4) above, either
(x) immediately after giving effect to each such merger, consolidation,
conveyance,
transfer or lease, the Borrower and the Guarantors (excluding the Guarantor subject to any merger or consolidation referred to in clause (2) above), taken as a whole, would hold property and assets constituting not less than a Material Portion of the property and assets of the Borrower and the Guarantors (including the Guarantor subject to any merger or consolidation referred to in clause (2) above), taken as a whole, immediately before giving effect to such merger or consolidation; for purposes of paragraphs (B) and (C) of this subsection (a), "Material Portion" means, that portion of the properties or assets of any Person (including a group of Persons taken as a whole) that would, if such Person were to convey, transfer or lease any property or asset, be required to be retained by such Person so as not to cause such conveyance, transfer or lease to be characterized as the conveyance, transfer or lease of all or substantially all of such Person's properties or assets, or (y) the successor to any such merger, consolidation, conveyance, transfer or lease is a direct wholly-owned Domestic Subsidiary of the Borrower and assumes by an agreement supplemental to the Guarantee Agreement and in form and substance satisfactory to the Administrative Agent the obligations of the Guarantor thereunder after which time such successor shall be a Guarantor for all purposes hereof and the other Loan Documents; and
(C) in any such case referred to in clause (5) above, either (x) immediately after giving effect to each such issuance, the Borrower and the Guarantors would hold property and assets (excluding the Unowned Percentage of the property and assets of each Guarantor) constituting not less than a Material Portion of the property and assets of the Borrower and the Guarantors, taken as a whole, immediately before giving effect to such issuance; for purposes of this paragraph (C), "Unowned Percentage" means, with respect to a Guarantor, the greater of (a) that percentage of the outstanding Voting Stock thereof that is not owned by the Borrower or another Guarantor, and (b) that percentage of the economic interests in such Guarantor represented by all of the capital stock thereof that is not owned by the Borrower or another Guarantor, or (y) the Person to whom such capital stock is issued is a direct wholly-owned Domestic Subsidiary of the Borrower and assumes by an agreement supplemental to the Guarantee Agreement and in form and substance satisfactory to the Administrative Agent the obligations of the Guarantor thereunder after which time such successor shall be a Guarantor for all purposes hereof and the other Loan Documents.
(b) Upon any consolidation by the Borrower with or merger by the Borrower into any other Corporation or any conveyance, transfer or lease of the properties and assets of the Borrower substantially as an entirety in accordance with Section 5.7, the successor Corporation formed by such consolidation or into which the Borrower is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Borrower under this Agreement with the same effect as if such successor Corporation had been named as the Borrower herein, and thereafter, except in the case
of a lease, the predecessor Corporation shall be relieved of all obligations and covenants under this Agreement and the Notes.
(c) Subject to Section 1.5, the Borrower shall not, nor shall it permit any other Loan Party to, transfer any Principal Property thereof or any capital stock of any Guarantor to any one or more Subsidiaries of the Borrower or such Loan Party, whether now existing or hereafter acquired, other than transfers of any Principal Property from one Loan Party to another Loan Party.
Section 5.8. Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by the Borrower for its general corporate purposes. None of such proceeds will be used in violation of applicable law, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System of the United States of America, as such regulations are from time to time in effect and including all official rulings under, and interpretations of, such regulations.
Section 5.9. Total Debt to Total Capitalization Ratio. On and after the Closing Date, the Total Debt to Total Capitalization Ratio shall not exceed 0.55:1.00 at any time. For purposes of this Section:
"Total Debt to Total Capitalization Ratio" shall mean, as of any date,
the ratio, in each case with respect to the Borrower and its Consolidated
Subsidiaries on a consolidated basis, of (a) Total Debt as of such date to
(b) the sum of (i) the amount determined under clause (a) of this defined
term, plus (ii) the sum of shareholders' equity, plus (iii) deferred income
taxes, minus (iv) any noncash income (loss) attributable to interest rate
or currency hedging or derivative arrangements, as each may be set forth on
the consolidated balance sheet of the Borrower most recently delivered
pursuant to Section 5.1(a) or (b), as the case may be; and
"Total Debt" means without duplication (i) all Debt, (ii) all
obligations upon which interest charges are customarily paid, (iii) all
obligations under conditional sale or other title retention agreements
relating to property acquired, (iv) all obligations in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (v) all Total Debt of
others secured by (or for which the holder of such Total Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by the Borrower or any Consolidated Subsidiary,
whether or not the Total Debt secured thereby has been assumed, (vi) all
guarantees of Total Debt of others, (vii) all capital lease obligations,
(viii) all obligations, contingent or otherwise, of the Borrower and its
Consolidated Subsidiaries as an account party in respect of letters of
credit and letters of guaranty, (ix) all obligations to pay a specified
purchase price for goods or services which purchase price is payable
whether or not such goods or services are delivered or accepted, (x) all
obligations, contingent or otherwise, in respect of bankers' acceptances,
(xi) all Receivables Facility Attributed Indebtedness of the Borrower and
its Consolidated Subsidiaries on the date of determination regardless of
its treatment under generally
accepted accounting principles, and (xii) to the extent not otherwise included, all net obligations under hedging agreements. The Total Debt of any Person shall include the Total 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 Total Debt provide that such Person is not liable therefor. Notwithstanding the foregoing, the Total Debt of any Person shall not include (i) Defeased Debt, and (ii) guarantees of the Cabin Bluff Notes so long as (a) the Borrower or any Domestic Subsidiary thereof received cash in an amount equal to no less than the fair market value of the Cabin Bluff Notes on the date of such receipt, and (b) the Borrower has the ability to cause the extinguishment of all liability under any such guarantee by the exercise of any right to "put" the Cabin Bluff Notes to the holder or holders of the indebtedness so guaranteed.
Section 5.10. Amendment to Documents. The Borrower shall not, nor shall it permit any other Loan Party to, amend, supplement or otherwise modify the Merger Agreement as in effect on and as of the date hereof, other than in connection with any such amendment, supplement or modification thereto that would not materially and adversely affect the interests of the Banks under the Loan Documents.
Section 5.11. Incorporation by Reference. Sections 5.5, 5.6, 5.7 and 5.9 of the Westvaco Credit Agreement, Sections 6.10 through and including 6.15 of the Mead 364-Day Credit Agreement and Sections 6.10 through and including 6.15 of the Mead 5-Year Credit Agreement are hereby incorporated by reference herein (collectively, the "Incorporated Covenants"); provided that the transactions contemplated by the Merger Agreement as in effect on the date hereof shall be deemed not to violate any such Incorporated Covenants.
ARTICLE 6.
DEFAULTS
Section 6.1. Events of Default. If one or more of the following events (each of the foregoing an "Event of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay within five days of the due date thereof any principal of or interest on any Loan, any fees or any other amount payable hereunder;
(b) any Loan Party shall fail to observe or perform any covenant or agreement contained in any Loan Document (other than those covered by clause (a) above) for 60 days after written notice thereof has been given to the Borrower by the Administrative Agent at the request of any Bank;
(c) any representation, warranty, certification or statement made by any Loan Party in any Loan Document or in any certificate, financial statement or other document delivered pursuant to any Loan Document shall prove to have been incorrect in any material respect when made (or deemed made);
(d) subject to Section 1.5, any Loan Party or any Domestic Subsidiary thereof shall fail to make any payment in respect of any Material Debt when due or within any applicable grace period;
(e) (i) an "Event of Default" under, and as such term is defined in, the Other Credit Agreement shall have occurred and be continuing, and such Event of Default results in the acceleration of the maturity of the notes thereunder or enables the lenders thereunder or the administrative agent thereunder to accelerate the maturity thereof, or (ii) subject to Section 1.5, any event or condition shall occur which results in the acceleration of the maturity of any Material Debt or enables (or, with the giving of notice or lapse of time or both, would enable) the holder of such Debt or any Person acting on such holder's behalf to accelerate the maturity thereof;
(f) any Loan Party or any Domestic Subsidiary thereof shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate or analogous action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced against any Loan Party or any Domestic Subsidiary thereof seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 90 days; or an order for relief shall be entered against any Loan Party or any Domestic Subsidiary thereof under the federal bankruptcy laws as now or hereafter in effect;
(h) subject to Section 1.5, on or after the Closing Date, any member of an ERISA Group shall fail to pay when due an amount or amounts aggregating in excess of $10,000,000 which it shall have become liable to pay under Title IV of ERISA or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of an ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan and such proceeding shall not have
been dismissed within 30 days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of any ERISA Group to incur a current payment obligation in excess of $75,000,000;
(i) subject to Section 1.5, one or more judgments or orders for the payment of money in excess of $75,000,000 in the aggregate shall be rendered against any one or more of the Loan Parties or any one or more Domestic Subsidiaries thereof and such judgments or orders shall continue unsatisfied and unstayed for a period of 60 days;
(j) prior to and until the Closing Date, but in all cases subject to the last sentence of Section 1.4, one or more of the Incorporated Defaults shall have occurred and be continuing; or
(k) the Guarantee Agreement shall cease, for any reason, to be in full force and effect (other than pursuant to the terms and provisions of the Guarantee Agreement), or any Guarantor shall so assert in writing or shall disavow any of its obligations thereunder;
then, and in every such event, the Administrative Agent shall (i) if requested by Banks having more than 50% in aggregate amount of the Commitments, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, and (ii) if requested by Banks holding Notes evidencing more than 50% in aggregate principal amount of the Loans, by notice to the Borrower declare the Notes (together with accrued interest thereon) to be, and the Notes shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided that in the case of any of the Events of Default specified in clause (f) or (g) above with respect to the Borrower or any Guarantor constituting a Significant Subsidiary, without any notice to the Borrower or any other act by the Administrative Agent or the Banks, the Commitments shall thereupon terminate and the Notes (together with accrued interest thereon) shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
Section 6.2. Notice of Default. The Administrative Agent shall give notice to the Borrower under Section 6.1(b) promptly upon being requested to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7.
THE AGENTS
Section 7.1. Appointment and Authorization. Each Bank irrevocably appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to such Agent by the terms hereof or thereof, together with all such powers as are reasonably incidental thereto.
Section 7.2. Agents and Affiliates. The Bank of New York shall have the same rights and powers under the Loan Documents as any other Bank and may exercise or refrain from exercising the same as though it were not an Agent, and The Bank of New York and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with any Loan Party or any Subsidiary or affiliate thereof as if it were not an Agent hereunder.
Section 7.3. Action by Agents. The obligations of the Agents hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, no Agent shall be
required to take any action with respect to any Default, except in the case of the Administrative Agent as expressly provided in Article 6.
Section 7.4. Consultation with Experts. Each Agent may consult with legal counsel (who may be counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.
Section 7.5. Liability of Agents. Neither any Agent nor any of their respective affiliates nor any of the respective directors, officers, agents or employees of the foregoing shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither any Agent nor any of their respective affiliates nor any of the respective directors, officers, agents or employees of the foregoing shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of any Loan Party; (iii) the satisfaction of any condition specified in Article 3, except in the case of the Administrative Agent receipt of notice required to be given to such Agent; or (iv) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection herewith. No Agent shall incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex, facsimile or similar writing) believed by it to be genuine or to be signed by the proper party or parties. Without limiting the generality of the foregoing, the use of the term "agent" in the Loan Documents with reference to the Agents is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom and is intended to create or reflect only an administrative relationship between independent contracting parties.
Section 7.6. Indemnification. Each Bank shall, ratably in accordance with its Commitment, indemnify each Agent (to the extent not reimbursed by the Borrower or any other Loan Party) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such Agent's gross negligence or willful misconduct) that such Agent may suffer or incur in connection with the Loan Documents or any action taken or omitted by such Agent thereunder.
Section 7.7. Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon any Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon any Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents.
Section 7.8. Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Banks and the Borrower. Upon any such resignation, the Required Banks shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Banks, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $50,000,000. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent.
Section 7.9. Syndication Agent, Documentation Agents, Managing Agents and Co-Agents. Nothing, in this Agreement shall impose upon the Syndication Agent, in such capacity, the Documentation Agents, in such capacity, the Managing Agents, in such capacity, or the Co-Agents, in such capacity, any duties or obligations whatsoever.
ARTICLE 8.
CHANGE IN CIRCUMSTANCES
Section 8.1. Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period for any Fixed Rate Borrowing:
(a) the Administrative Agent is advised by the Reference Banks that deposits in dollars (in the applicable amounts) are not being offered to the Reference Banks in the relevant market for such Interest Period (and Required Banks have not advised the Administrative Agent in writing to the contrary), or
(b) Banks having 50% or more of the aggregate amount of the Commitments advise the Administrative Agent that the Adjusted London Interbank Offered Rate as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Banks of funding their Euro-Dollar Loans for such Interest Period, the Administrative Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Administrative Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Banks to make Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the Administrative Agent at least two Domestic Business Days before the date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, such Borrowing shall instead be made as a Base Rate Borrowing.
Section 8.2. Illegality. If, on or after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, 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 Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify the Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Banks and the Borrower, whereupon until such Bank notifies the Borrower and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before giving any notice to the Administrative Agent pursuant to this Section, such Bank shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine that it may not lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower shall immediately prepay in full the then outstanding or principal amount of each such Euro-Dollar Loan, together with accrued interest thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount from such Bank (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate Loan.
Section 8.3. Increased Cost and Reduced Return. (a) If on or after the date hereof the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, 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 Bank (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any tax, duty or other charge with respect to its Euro-Dollar Loans, its Note or its obligation to make Euro-Dollar Loans, or shall change the basis of taxation of payments to any Bank (or its Applicable Lending Office) of the principal of or interest on its Euro-Dollar Loans or any other amounts due under this Agreement in respect of its Euro-Dollar Loans or its obligation to make Euro-Dollar Loans (except for changes in the rate of tax on the overall net income of such Bank or its Applicable Lending Office imposed by the jurisdiction in which such Bank's principal executive office or Applicable Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any Euro-Dollar Loan, any such requirement included in an applicable Euro-Dollar Reserve Percentage), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or shall
impose on any Bank (or its Applicable Lending Office) or on the London interbank
market any other condition affecting its Euro-Dollar Loans, its Note or its obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its Note with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days after demand by such Bank (with a copy to the Administrative Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, 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 any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has of would have the effect of reducing the rate of return on capital of such Bank (or its Parent) as a consequence of such Bank's obligations hereunder to a level below that which such Bank (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time, within 15 days after demand by such Bank (with a copy to the Administrative Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Bank to compensation pursuant to this Section and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank claiming compensation under this Section and setting forth a calculation in reasonable detail of the additional amount or amounts to be paid to it hereunder shall be conclusive if prepared in good faith and on a reasonable basis. In determining such amount, such Bank may use any reasonable averaging and attribution methods. Notwithstanding the foregoing subsections (a) and (b) of this Section 8.3, the Borrower shall only be obligated to compensate any Bank for any amount arising or accruing during (i) any time or period commencing on the date on which such Bank notifies the Administrative Agent and the Borrower that it proposes to demand such compensation and identifies to the Administrative Agent and the Borrower the statute, regulation or other basis upon which the claimed compensation is or will be based and (ii) any time or period during which such Bank did not know that such amount would arise or accrue because of the retroactive application of such statute, regulation or other basis.
Section 8.4. Base Rate Loans Substituted for Affected Euro-Dollar Loans. If
(i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 8.2 or (ii) any Bank has demanded compensation under Section
8.3(a) and the Borrower shall, by at
least five Euro-Dollar Business Days' prior notice to such Bank through the Administrative Agent, have elected that the provisions of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as Euro-Dollar Loans shall be made instead as Base Rate Loans (on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments of principal which would otherwise be applied to repay such Euro-Dollar Loans shall be applied to repay its Base Rate Loans instead.
Section 8.5. Substitution or Removal of Bank. If any Bank has demanded compensation under Section 8.3, the Borrower shall have the right, with the assistance of the Administrative Agent, to seek a substitute bank or banks (which may be one or more of the Banks) to purchase the Note and assume the Commitment of such Bank. If any Bank becomes a Non-Consenting Bank, then the Borrower, at its sole expense (including the fees referred to in Section 9.6(b)) and effort or, shall have the right, within 45 days of the date such Bank became a Non-Consenting Bank (a) to seek a substitute bank or banks (which may be one or more of the Banks) to purchase the Note and assume the Commitment of such Bank, or (b) provided that no Default shall have occurred and be continuing, to remove such Bank as a "Bank" pursuant to this Section; provided that (i) if such Bank is a "Bank" under and as defined in the Other Credit Agreement, the Borrower must replace or remove such Bank as a "Bank" from the Other Credit Agreement pursuant to the terms of Section 8.5 thereof simultaneously with the replacement or removal of such Bank hereunder, and (ii) after giving effect to each removal of a Non-Consenting Bank, the sum of (A) a fraction (expressed as a percentage), the numerator of which is the Commitment of such Non-Consenting Bank, and the denominator of which is the sum of the aggregate Commitments existing at the time immediately prior to the removal of such Non-Consenting Bank, plus (B) with respect to each other Non-Consenting Lender removed in accordance with this Section since the Effective Date, the percentage calculated with respect thereto under the immediately preceding clause (A) at the time of the removal of such prior Non-Consenting Lender, shall not exceed 15%. A Non-Consenting Bank that has been duly selected by the Borrower to be removed shall be removed as a "Bank" effective upon (i) the delivery to the Administrative Agent and such Non-Consenting Bank of a written notice to such effect, (ii) the payment to the Administrative Agent, for the account of such Bank, of all outstanding principal of, and accrued interest on, such Bank's Loans and all accrued fees owing to such Bank hereunder, (iii) the payment to such Non-Consenting Bank of all other sums then due and payable thereto (including, without limitation, any sums that would be due to such Non-Consenting Bank under Article 8), and (iv) the simultaneous replacement or removal of such Bank as a "Bank" under and as defined in the Other Credit Agreement, at which time the Commitment of such Non-Consenting Bank shall automatically terminate and such Non-Consenting Bank shall no longer be a "Bank" under the Loan Documents (but shall continue to be entitled to the benefits of Sections 2.13, 8.3 and 9.3). In the event that (x) the Borrower or the Administrative Agent has requested the Banks to consent to a departure from or
waiver of any provisions of the Loan Documents or agree to any amendment thereto and (y) Required Banks have agreed to such consent, waiver or amendment, then any Bank that does not agree to such consent, waiver or amendment (whether affirmatively or by failure to respond within five Domestic Business Days of a request therefor) shall be deemed a "Non-Consenting Bank".
ARTICLE 9.
MISCELLANEOUS
Section 9.1. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Administrative Agent, at its address or facsimile
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or facsimile number set forth in its Administrative Questionnaire or
(z) in the case of any party, such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Administrative
Agent and the Borrower. Each such notice, request or other communication shall
be effective when received at the address specified in this Section.
Section 9.2. No Waivers. No failure or delay by any Agent or Bank in exercising any right, power or privilege hereunder or under any Note shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 9.3. Expenses; Documentary Taxes; Indemnification. (a) The Borrower shall pay (i) all out-of-pocket expenses of the Agents, including fees and disbursements of special counsel for the Agents, in connection with the preparation and administration of each Loan Document, any waiver or consent thereunder or any amendment thereof or any Default or alleged Default, and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by any Agent or Bank, including fees and disbursements of counsel, in connection with such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. The Borrower shall indemnify each Bank against any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of the Loan Documents.
(b) The Borrower agrees to indemnify each Bank and its respective Affiliates and the respective directors, officers, employees, agents and advisors of such Bank and such Bank's Affiliates (each of the foregoing being an "Indemnified Person") and hold each Indemnified Person harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by such Indemnified Person (or by any Agent (together with its officers, directors, employees, agents and advisors and Affiliates) in connection with its actions as Agent hereunder) in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnified Person shall be designated a party thereto) relating to or arising out of
the Loan Documents or any actual or proposed use of proceeds of Loans hereunder; provided that no Indemnified Person shall have the right to be indemnified hereunder for its own gross negligence or willful misconduct.
Section 9.4. Sharing of Set-Offs. Each Bank agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest due with respect to any Note held by it (other than in the circumstances contemplated by Section 8.5) which is greater than the proportion received by any other Bank in respect of the aggregate amount of principal and interest due with respect to any Note held by such other Bank, the Bank receiving such proportionately greater payment shall purchase such participations in the Notes held by the other Banks, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Notes held by the Banks shall be shared by the Banks pro rata; provided that nothing in this Section shall impair the right of any Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness under the Notes. The Borrower agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a participation in a Note, whether or not acquired pursuant to the foregoing arrangements, may exercise rights of set-off or counterclaim and other rights with respect to such participation as if such holder of a participation were a direct creditor of the Borrower in the amount of such participation.
Section 9.5. Amendments and Waivers. Any provision of the Loan Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Banks (and, if the rights or duties of any Agent are affected thereby, by such Agent); provided that no such amendment or waiver shall (i) increase the Commitment of any Bank without the written consent of such Bank, (ii) reduce the principal of or rate of interest on any Loan or any fees hereunder without the written consent of each Bank affected thereby, (iii) postpone the date fixed for any payment of principal of or interest on any Loan or any fees hereunder without the written consent of each Bank affected thereby, (iv) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Section or any other provision of this Agreement without the written consent of each Bank, (v) change any provision hereof in any manner that would alter the pro rata sharing of payments required by this Agreement or the Note without the written consent of each Bank, (vi) release any Guarantor from its guarantee obligations under the Guarantee Agreement (except as expressly provided in the Guarantee Agreement and except in connection with the merger, consolidation or transfer of all or substantially all of the assets of such Guarantor into a Loan Party as permitted under Section 5.7(a)) without the written consent of each Bank, (vii) waive any condition set forth in Section 3.1 or Section 3.2 without the written consent of each Bank, or (viii) change any provision of this Section without the written consent of each Bank.
Section 9.6. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that the Borrower may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of all Banks; and provided further that except
as contemplated by sub-sections (b), (e) and (f) of this Section 9.6, by Section 9.4 and by the definition of Applicable Lending Office, no Bank may assign, grant participations in or otherwise transfer any of its rights or obligations under this Agreement.
(b) Any Bank may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it), provided that (i) except in
the case of an assignment to a Bank or an Eligible Affiliate, each of the
Borrower and the Administrative Agent must give its prior written consent to
such assignment (which consent shall not be unreasonably withheld or delayed),
(ii) except in the case of an assignment to a Bank or an Eligible Affiliate or
an assignment of the entire remaining amount of the assigning Bank's Commitment,
or unless the Borrower and the Administrative Agent shall otherwise consent, the
amount of the Commitment of the assigning Bank subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than (A)
$1,000,000, and (B) when aggregated with the amount, if any, of the "Commitment"
(under and as defined in the Other Credit Agreement) of the assigning Bank being
assigned substantially simultaneously therewith, $10,000,000, (iii) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance together with, unless otherwise agreed by the
Administrative Agent, a processing and recordation fee of $3,500, and (iv) the
assignee, if it shall not be a Bank, shall deliver to the Administrative Agent
an Administrative Questionnaire, and provided further, that any consent of the
Borrower otherwise required under this paragraph shall not be required if a
Default has occurred and is continuing. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Acceptance, the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Bank under the Agreement,
and the assigning Bank thereunder shall, to the extent of the interest assigned
by such Assignment and Acceptance, be released from its obligations under the
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Bank's rights and obligations under the Agreement, such Bank shall
cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.13, 8.3, and 9.3). Any assignment or transfer by a Bank of rights or
obligations under the Agreement that does not comply with this paragraph or
paragraph (f) shall be treated for purposes of the Agreement as a sale by such
Bank of a participation in such rights and obligations in accordance with
paragraph (e) of this Section. For purposes of this Section 9.6(b), "Eligible
Affiliate" means, with respect to any Bank, any Affiliate hereof that has
combined capital and surplus of at least $250,000,000.
(c) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in New York City a copy of each Assignment and Acceptance and each notice of removal of a Bank under Section 8.5 delivered to it and a register for the recordation of the names and addresses of the Banks, and the Commitment of, and principal amount of the Loans owing to, each Bank pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive absent clearly demonstrable error, and the Borrower and each Bank and the Administrative Agent may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Bank and the Administrative Agent, at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Bank and an assignee, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Bank hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. Upon the effectiveness of any removal of a Bank pursuant to Section 8.5, the Administrative Agent shall record the relevant information in the Register. No assignment shall be effective, and no removal of Bank shall be effective, for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(e) Any Bank may at any time grant to one or more banks or other institutions (each a "Participant") participating interests in any of its Loans. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Administrative Agent, the Borrower and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that such Bank will not agree to any modification, amendment or waiver of this Agreement described in clause (i) through (viii) of Section 9.5 without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Article 8 with respect to its participating interest.
(f) Any Bank may at any time assign as collateral security all or any portion of its rights under this Agreement and its Note, including without limitation to a Federal Reserve Bank. No such assignment shall release the transferor Bank from its obligations hereunder.
(g) No Participant in any Bank's Loans shall be entitled to receive any greater payment under Section 8.3 than such Bank would have been entitled to receive.
Section 9.7. Collateral. Each of the Banks represents to each Agent and each of the other Banks that it in good faith is not relying upon any "margin stock" (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement.
Section 9.8. New York Law. This Agreement and each Note shall be construed in accordance with and governed by the law of the State of New York.
Section 9.9. Jurisdiction; Consent to Service of Process
(a) The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to the Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that, to the extent permitted by applicable law, all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any Agent or any Bank may otherwise have to bring any action or proceeding relating to the Loan Documents against the Borrower, or any of its property, in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the Loan Documents in any court referred to in paragraph (a) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
Section 9.10. Jury Trial
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 9.11. Counterparts; Integration. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.
MW HOLDING CORPORATION
(MEADWESTVACO CORPORATION)
364-DAY CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
MW HOLDING CORPORATION
By: /s/ * ------------------------------------------- Prior to the Initial Transactions: --------------------------------- |
Address: Mead World Headquarters Courthouse Plaza, N.E. Dayton, Ohio 45463 Facsimile: (937) 228-5555 On and after the Initial Transactions: Address: One High Ridge Park Stamford, Connecticut 06905 Facsimile: (203) 461-7988 |
MW HOLDING CORPORATION
(MEADWESTVACO CORPORATION)
364-DAY CREDIT AGREEMENT
$41,250,000 THE BANK OF NEW YORK, as a Bank and as the Administrative Agent
By: /s/ * -------------------------------------------- Address: One Wall Street, 22nd Floor New York, New York 10286 Attention: Eliza S. Adams Facsimile: (212) 635-1480 |
with a copy to Address: One Wall Street, 18th Floor New York, New York 10286 Attention: Steven Gazzillio |
Facsimile: (212) 635-6365, 6366, or 6367
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $41,250,000 BANK ONE, NA By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT |
$39,000,000 BANK OF AMERICA, N.A.
By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $39,000,000 JP MORGAN CHASE BANK By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $39,000,000 CITICORP USA, INC. By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $25,000,000 BARCLAYS BANK PLC By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT |
$25,000,000 COMMERZBANK AG NEW YORK AND
GRAND CAYMAN BRANCHES
By: /s/ * -------------------------------------------- By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $25,000,000 FLEET NATIONAL BANK By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $25,000,000 THE BANK OF NOVA SCOTIA By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $25,000,000 WACHOVIA BANK By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT |
$21,500,000 SUMITOMO MITSUI BANKING CORPORATION
By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $21,500,000 SUNTRUST BANK By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT |
$15,000,000 BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $15,000,000 BNP PARIBAS By: /s/ * -------------------------------------------- By: /s/ * ------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $15,000,000 ING (U.S.) CAPITAL LLC By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $15,000,000 MELLON BANK NA By: /s/ * ------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $15,000,000 NATIONAL CITY BANK By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT |
$15,000,000 THE NORTHERN TRUST COMPANY
By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION
(MEADWESTVACO CORPORATION)
364-DAY CREDIT AGREEMENT
$15,000,000 THE ROYAL BANK OF SCOTLAND PLC
By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION
(MEADWESTVACO CORPORATION)
364-DAY CREDIT AGREEMENT
$15,000,000 UBS AG, STAMFORD BRANCH
By: /s/ * -------------------------------------------- By: /s/ * -------------------------------------------- |
MW HOLDING CORPORATION (MEADWESTVACO CORPORATION) 364-DAY CREDIT AGREEMENT $12,500,000 FIFTH THIRD BANK By: /s/ * -------------------------------------------- |
* denotes execution by an authorized signatory of the respective party.
Exhibit 4.viv
THE MEAD CORPORATION
TO
BANKERS TRUST COMPANY,
Trustee
INDENTURE
Dated as of July 15, 1982
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of July 15, 1982
Trust Indenture Act Section Indenture Section --------------- ----------------- (S) 310(a)(1)................................................. 609 (a)(2)................................................. 609 (a)(3)................................................. Not Applicable (a)(4)................................................. Not Applicable (b).................................................... 608 610 (S) 311(a).................................................... 613(a) (b).................................................... 613(b) (b)(2)................................................. 703(a)(2) 703(b) (S) 312(a).................................................... 701 702(a) (b).................................................... 702(b) (c).................................................... 702(c) (S) 313(a).................................................... 703(a) (b).................................................... 703(b) (c).................................................... 703(a), 703(b) (d).................................................... 703(c) (S) 314(a).................................................... 704 (b).................................................... Not Applicable (c)(1)................................................. 102 (c)(2)................................................. 102 (c)(3)................................................. Not Applicable (d).................................................... Not Applicable (e).................................................... 102 (S) 315(a).................................................... 601(a) (b).................................................... 602 703(a)(6) (c).................................................... 601(b) (d).................................................... 601(c) (d)(1)................................................. 601(a)(1) (d)(2)................................................. 601(c)(2) (d)(3)................................................. 601(c)(3) (e).................................................... 514 (S) 316(a).................................................... 101 (a)(1)(A).............................................. 502 512 (a)(1)(B).............................................. 513 (a)(2)................................................. Not Applicable (b).................................................... 508 (S) 317(a)(1)................................................. 503 (a)(2)................................................. 504 (b).................................................... 1003 (S) 318(a).................................................... 107 ------------- |
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
PAGE ---- PARTIES................................................................... 1 RECITALS OF THE COMPANY................................................... 1 ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. Definitions: Act........................................................ 2 Affiliate.................................................. 2 Appraised Value............................................ 2 Attributable Debt.......................................... 2 Authenticating Agent....................................... 3 Board of Directors......................................... 3 Board Resolution........................................... 3 Business Day............................................... 3 Commission................................................. 3 Company.................................................... 3 Company Request; Company Order............................. 3 Consolidated Shareholders' Equity.......................... 3 Corporate Trust Office..................................... 3 corporation................................................ 4 Defaulted Interest......................................... 4 Event of Default........................................... 4 Exempted Indebtedness...................................... 4 Experts.................................................... 4 Holder..................................................... 4 Indenture.................................................. 4 interest................................................... 4 Interest Payment Date...................................... 5 Maturity................................................... 5 Officers' Certificate...................................... 5 Opinion of Counsel......................................... 5 Original Issue Discount Security........................... 5 Outstanding................................................ 5 Paying Agent............................................... 6 Person..................................................... 6 |
PAGE ---- Place of Payment........................................... 6 Predecessor Security....................................... 6 Principal Property......................................... 6 Redemption Date............................................ 7 Redemption Price........................................... 7 Regular Record Date........................................ 7 Responsible Officer........................................ 7 Securities................................................. 7 Security Register and Security Registrar................... 7 Special Record Date........................................ 7 Stated Maturity............................................ 7 Subsidiary................................................. 8 Trustee.................................................... 8 Trust Indenture Act........................................ 8 Vice President............................................. 8 SECTION 102. Compliance Certificates and Opinions....................... 8 SECTION 103. Form of Documents Delivered to Trustee..................... 9 SECTION 104. Acts of Holders............................................ 10 SECTION 105. Notices, Etc., to Trustee and Company...................... 11 SECTION 106. Notice to Holders; Waiver.................................. 11 SECTION 107. Conflict with Trust Indenture Act.......................... 12 SECTION 108. Effect of Headings and Table of Contents................... 12 SECTION 109. Successors and Assigns..................................... 12 SECTION 110. Separability Clause........................................ 12 SECTION 111. Benefits of Indenture...................................... 12 SECTION 112. Governing Law.............................................. 12 SECTION 113. Legal Holidays............................................. 12 ARTICLE TWO SECURITY FORMS SECTION 201. Forms Generally............................................ 13 SECTION 202. Form of Face of Security................................... 13 |
Page ---- SECTION 203. Form of Reverse of Security................................. 16 SECTION 204. Form of Trustee's Certificate of Authentication............. 20 ARTICLE THREE THE SECURITIES SECTION 301. Amount Unlimited; Issuable in Series........................ 20 SECTION 302. Denominations............................................... 22 SECTION 303. Execution, Authentication, Delivery and Dating.............. 22 SECTION 304. Temporary Securities........................................ 24 SECTION 305. Registration, Registration of Transfer and Exchange......... 24 SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............ 25 SECTION 307. Payment of Interest; Interest Rights Preserved.............. 26 SECTION 308. Persons Deemed Owners....................................... 28 SECTION 309. Cancellation................................................ 28 SECTION 310. Computation of Interest..................................... 28 ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 401. Satisfaction and Discharge of Indenture..................... 29 SECTION 402. Application of Trust Money.................................. 30 ARTICLE FIVE REMEDIES SECTION 501. Events of Default........................................... 30 SECTION 502. Acceleration of Maturity; Rescission and Annulment.......... 32 SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee................................................ 34 SECTION 504. Trustee May File Proofs of Claim............................ 35 SECTION 505. Trustee May Enforce Claims Without Possession of Securities................................................ 36 SECTION 506. Application of Money Collected.............................. 36 SECTION 507. Limitation on Suits......................................... 36 |
Page ---- SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest...................................... 37 SECTION 509. Restoration of Rights and Remedies.......................... 37 SECTION 510. Rights and Remedies Cumulative.............................. 38 SECTION 511. Delay or Omission Not Waiver................................ 38 SECTION 512. Control by Holders.......................................... 38 SECTION 513. Waiver of Past Defaults..................................... 38 SECTION 514. Undertaking for Costs....................................... 39 SECTION 515. Waiver of Stay or Extension Laws............................ 39 ARTICLE SIX THE TRUSTEE SECTION 601. Certain Duties and Responsibilities......................... 40 SECTION 602. Notice of Defaults.......................................... 41 SECTION 603. Certain Rights of Trustee................................... 42 SECTION 604. Not Responsible for Recitals or Issuance of Securities...... 43 SECTION 605. May Hold Securities......................................... 43 SECTION 606. Money Held in Trust......................................... 43 SECTION 607. Compensation and Reimbursement.............................. 43 SECTION 608. Disqualification; Conflicting Interest...................... 44 (a) Elimination of Conflicting Interest or Resignation........................................ 44 (b) Notice of Failure to Eliminate Conflicting Interest or Resign................................. 44 (c) "Conflicting Interest" Defined....................... 44 (d) Definitions of Certain Terms Used in This Section............................................ 48 (e) Calculation of Percentages of Securities............. 49 SECTION 609. Corporate Trustee Required; Eligibility..................... 50 SECTION 610. Resignation and Removal; Appointment of Successor........... 51 SECTION 611. Acceptance of Appointment by Successor...................... 52 SECTION 612. Merger, Conversion, Consolidation or Succession to Business.................................................. 54 |
PAGE ---- SECTION 613. Preferential Collection of Claims Against Company............ 54 (a) Segregation and Apportionment of Certain Collections by Trustee, Certain Exceptions.......... 54 (b) Certain Creditor Relationships Excluded from Segregation and Apportionment....................... 57 (c) Definitions of Certain Terms Used in This Section............................................. 58 SECTION 614. Appointment of Authenticating Agent.......................... 59 ARTICLE SEVEN Holders' Lists and Reports by Trustee and Company SECTION 701. Company to Furnish Trustee Names and Addresses of Holders................................................. 61 SECTION 702. Preservation of Information; Communications to Holders.................................................... 61 SECTION 703. Reports by Trustee........................................... 63 SECTION 704. Reports by Company........................................... 63 ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease SECTION 801. Company May Consolidate, Etc., Only on Certain Terms...................................................... 65 SECTION 802. Successor Corporation Substituted............................ 66 ARTICLE NINE Supplemental Indentures SECTION 901. Supplemental Indentures Without Consent of Holders........... 67 SECTION 902. Supplemental Indentures with Consent of Holders.............. 68 SECTION 903. Execution of Supplemental Indentures......................... 69 SECTION 904. Effect of Supplemental Indentures............................ 69 SECTION 905. Conformity with Trust Indenture Act.......................... 70 SECTION 906. Reference in Securities to Supplemental Indentures........... 70 ARTICLE TEN Covenants SECTION 1001. Payment of Principal, Premium and Interest................... 70 SECTION 1002. Maintenance of Office or Agency.............................. 70 SECTION 1003. Money for Securities Payments to Be Held in Trust............ 71 |
PAGE ---- SECTION 1004. Corporate Existence......................................... 72 SECTION 1005. Maintenance of Properties................................... 73 SECTION 1006. Limitation on Liens......................................... 73 SECTION 1007. Limitation on Sale and Lease-Back........................... 75 SECTION 1008. Statement by Officers as to Default......................... 76 SECTION 1009. Waiver of Certain Covenants................................. 76 ARTICLE ELEVEN Redemption of Securities SECTION 1101. Applicability of Article.................................... 76 SECTION 1102. Election to Redeem; Notice to Trustee....................... 76 SECTION 1103. Selection by Trustee of Securities to Be Redeemed........... 77 SECTION 1104. Notice of Redemption........................................ 77 SECTION 1105. Deposit of Redemption Price................................. 78 SECTION 1106. Securities Payable on Redemption Date....................... 78 SECTION 1107. Securities Redeemed in Part................................. 79 ARTICLE TWELVE Sinking Funds SECTION 1201. Applicability of Article.................................... 79 SECTION 1202. Satisfaction of Sinking Fund Payments with Securities................................................ 79 SECTION 1203. Redemption of Securities for Sinking Fund................... 80 TESTIMONIUM................................................................ 81 SIGNATURES AND SEALS....................................................... 81 ACKNOWLEDGMENTS............................................................ 82 |
INDENTURE, dated as of July 15, 1982, between The Mead Corporation, a corporation duly organized and existing under the laws of the State of Ohio (herein called the "Company"), having its principal office at Dayton, Ohio and Bankers Trust Company, a corporation duly organized and existing under the laws of New York, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" means any Person, other than a Subsidiary, in which the Company and/or any Subsidiary at any time owns, directly or indirectly, an aggregate of at least 50% of the voting stock.
"Appraised Value" means the fair market value as determined on the appraisal date or dates by an "expert" acceptable to the Trustee and the Company. The term "Appraisal Date" as used in this paragraph shall mean: (a) the date or dates on which the appraisals conducted during 1980 were completed, which appraisals were delivered by the Company on January 5, 1981; and (b) thereafter, such later date or dates, if any, which is five years after the last previous appraisal date under this Indenture, provided that the Company may, at its option by thirty days' written notice to the Trustee, fix any appraisal date at any date which is not less than two and one-half years nor more than five years after the last previous appraisal date under this Indenture.
"Attributable Debt" means, as to any particular lease entered into after the date hereof under which any Person is at the time liable and at any date as of which the amount thereof is to be determined, the total net amount of rent required to be paid by such Person under such lease during the remaining term thereof, discounted from the respective due dates thereof to such date at a rate equal to the weighted average of the interest rates borne by the Securities. The net amount of rent required to be paid under any such lease for any such period shall be the aggregate amount of the rent payable by the lessee with respect to such period after excluding amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water and utility rates and similar charges. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.
"Authenticating Agent" means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law to close.
"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Shareholders' Equity" means the sum of the consolidated shareholders' equity of the Company and its consolidated subsidiaries, as shown on the most recent audited consolidated balance sheet of the Company plus 75% of the excess of the "Appraised Value" (as herein defined) of all timberlands owned by the Company and its Subsidiaries over the book value thereof.
"Corporate Trust Office" means the principal office of the Trustee in The City of New York, State of New York at which at any particular time its corporate trust business shall be administered, which office is, as
of the date of this Indenture, located at One Bankers Trust Plaza, New York, New York 10006.
"corporation" includes corporations, associations, companies and business trusts.
"Defaulted Interest" has the meaning specified in Section 307.
"Event of Default" has the meaning specified in Section 501.
"Exempted Indebtedness" means, as of any particular time, the sum of (i) the aggregate principal amount of all then outstanding indebtedness for money borrowed of the Company and Subsidiaries issued, assumed or guaranteed directly or indirectly after the date of this Indenture and secured by any mortgage, security interest, pledge, lien or other encumbrance other than those permitted by paragraph (a) of Section 1006 and (ii) all Attributable Debt in respect of Sale and Lease-Back Transactions (as defined in Section 1007) incurred after the date of this Indenture and at such time outstanding other than that permitted pursuant to paragraph (a) of Section 1007.
"Experts", except as otherwise herein specifically provided, the engineer, appraiser, accountant, counsel or other person giving any opinion, certificate, audit or report provided for herein shall be selected by the Board of Directors and shall not be disqualified by reason of his regular employment or retention by the Company, but in all cases such selection of the Board of Directors must be acceptable to the Trustee. In any case, more than one person of the designated class may join in any such opinion, certificate, audit or report, each certifying to a party of the required facts, opinions or conclusions. Each certificate or opinion with respect to compliance with a condition or covenant provided for herein shall conform to the requirements of Section 102.
"Holder" means a person in whose name a Security is registered in the Security Register.
"Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means the Stated Maturity of an instalment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on which the principal of such Security or an instalment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the Board of Directors, the Vice Chairman of the Board of Directors, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, the Controller or an Assistant Controller, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities
are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or with such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any such Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or with such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) and interest on the Securities of that series are payable as specified as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means (i) any paperboard, paper or pulp mill or any paper converting plant or foundry or any other manufacturing plant
or facility located within the United States of America or Canada of the Company or any Subsidiary except any such plant or facility which the Board of Directors by resolution declares is not of material importance to the total business conducted by the Company and its Subsidiaries as an entirety and (ii) any timber or timberlands of the Company or any Subsidiary.
"Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any instalment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such instalment of principal or interest is due and payable.
"Subsidiary" means any corporation at least a majority of the outstanding securities of which having ordinary voting power to elect a majority of the board of directors of such corporation (whether or not any other class of securities has or might have voting power by reason of the happening of a contingency) is at the time owned or controlled directly or indirectly by the Company, or by one or more Subsidiaries, or by the Company and one or more Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided in Section 905.
"Vice President", when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based, are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest
shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in substantially the form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Face of Security.
[If the Security is an Original Issue Discount Security, insert--FOR PURPOSES OF SECTION 1232 of the United States Internal Revenue Code of 1954, as amended, the issue price of this Security is ...% of its principal amount and the issue date is ...................., 19...]
THE MEAD CORPORATION
No...... $......
THE MEAD CORPORATION, a corporation duly organized and existing under the laws of the State of Ohio (herein called the "Company"), for value received,
hereby promises to pay to............................... or registered assigns, the principal sum of...................................... Dollars on .......... ................................... [If the Security is to bear interest prior |
to Maturity, insert--, and to pay interest thereon from ........ or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on ....... and ...... in each year, commencing ...., at the rate of ..% per annum, until the principal hereof is paid or made available for payment [If applicable insert--, and (to the extent that the payment of such interest shall be legally enforceable) at the rate of ..% per annum on any overdue principal and premium and on any overdue instalment of interest]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the ..... or ..... (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.]
[If the Security is not to bear interest prior to Maturity, insert-- The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal of this Security
shall bear interest at the rate of ..% per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such default in payment to the date payment of such principal has been made or duly provided for. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on demand shall bear interest at the rate of .....% per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert--any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts [if applicable, insert--; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
Dated:
THE MEAD CORPORATION
By
.............................
Attest:
...............................
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of July 15, 1982 (herein called the "Indenture"), between the Company and Bankers Trust Company, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [, limited in aggregate principal amount to $......].
[If applicable, insert--The Securities of this series are subject to redemption upon not less than 30 days' notice by mail, [if applicable, insert--(1) on ...... in any year commencing with the year .... and ending with the year .... through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [on or after .............., 19..], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [on or before ......, ....%, and if redeemed] during the 12-month period beginning ........... of the years indicated,
Redemption Redemption Year Price Year Price ---- ---------- ---- ---------- |
and thereafter at a Redemption Price equal to ......% of the principal amount, together in the case of any such redemption [if applicable, insert--(whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert--The Securities of this series are subject to redemption upon not less than 30 days' notice by mail, (1) on ................. .......... in any year commencing with the year ..... and ending with the year ..... through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after ..............], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning ............ of the years indicated,
Redemption Price For Redemption Redemption Price For Through Operation Redemption Otherwise of the Than Through Operation Year Sinking Fund of the Sinking Fund ---- ----------------- ---------------------- |
and thereafter at a Redemption Price equal to ....% of the principal amount, together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
...................., redeem any Securities of this series as contemplated by
[Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than ....% per annum.]
[The sinking fund for this series provides for the redemption on
.................... in each year beginning with the year .... and ending with
the year .... of [not less than] $.......... [("mandatory sinking fund") and not
more than $..........] aggregate principal amount of Securities of this series.
[Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made--in the inverse
order in which they become due.]
In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
[If the Security is not an Original Issue Discount Security,--If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security,--If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to--insert formula for determining the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal and overdue interest (in each case to the extent that the payment of such
interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of 66 2/3% in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without coupons in denominations of $.... and any integral multiple thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
Section 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Section 304, 305, 306, 906 or 1107);
(3) the date or dates on which the principal of the Securities of the series is payable;
(4) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date;
(5) the place or places where the principal of (and premium, if any) and interest on Securities of the Series shall be payable;
(6) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company;
(7) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;
(9) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502; and
(10) any other terms of the series or covenants for the benefit thereof (which terms or covenants shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution and set forth in such Officers' Certificate or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of any
series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the Board of Directors, its Vice Chairman of the Board of Directors, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture;
(b) if the terms of such securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and
(c) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series of authorized denominations. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series at the office or agency in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new
Securities of the same series, of any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, (i) to issue, register the transfer of or exchange Securities of any series or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in the Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or
(5) a default by the Company in the payment of any indebtedness for borrowed money (including a default with respect to Securities of any series other than that series), whether such indebtedness now exists or shall hereafter be created, whether at maturity, by call for redemption, by acceleration, declaration or otherwise, and any period of grace with respect thereto shall have expired, unless the time for payment shall have been effectively extended; provided, however, that, subject to the provisions of Sections 601 and 602, the Trustee shall not be charged with knowledge of any such default unless written notice thereof shall have been given to the Trustee at its Corporate Trust Office by the Company, by the holder or an agent of a holder of any such indebtedness, or by the trustee then acting under any indenture or other instrument under which such default shall have occurred, or by the holders of not less than 25% in principal amount of the Outstanding Securities of that series; provided, however, that if, prior to a declaration of acceleration of the maturity of the Securities of that series or the entry of judgment in favor of the Trustee in a suit pursuant to Section 503, such default shall be remedied or cured by the Company or waived by the holders of such indebtedness, then the Event of Default hereunder by reason thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action upon the part of either the Trustee or any of the Securityholders; or
(6) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all of the Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the cost, expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 307) interest on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities of any series shall have right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series, determined as provided in Section 512, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series, as their names and addresses appear in the
Security Register, notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of (or premium, if any) or
interest on any Security of such series or in the payment of any sinking fund
instalment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
provided, further, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.
SECTION 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as defined in this Section, with respect to the Securities of any series, it shall, within 90 days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign with respect to the Securities of that series in the manner and with the effect hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the provisions of Subsection (a) of this Section with respect to the Securities of any series, the Trustee shall, within 10 days after the expiration of such 90-day period, transmit by mail to all Holders of Securities of that series, as their names and addresses appear in the Security Register, notice of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed to have a conflicting interest with respect to the Securities of any series if
(1) the Trustee is trustee under this Indenture with respect to the Outstanding Securities of any series other than that series or is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Company are outstanding, unless such other indenture is a collateral trust indenture under which the only collateral consists of Securities issued under this Indenture, provided that there shall be excluded from the operation of this paragraph any securities or certificates of interest or participation in other securities of the Company which may be deemed to be outstanding by virtue of its Lease dated as of October 1, 1973 with the Ohio Air Quality Development Authority
or its Guaranty Agreement dated October 1, 1973 in respect of Bonds of the Ohio Air Quality Development Authority, this Indenture with respect to the Securities of any series other than that series or any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or indentures are wholly unsecured and such other indenture or indentures are hereafter qualified under the Trust Indenture Act, unless the commission shall have found and declared by order pursuant to Section 305(b) or Section 307(c) or the Trust Indenture Act that differences exist between the provisions of this Indenture with respect to Securities of that series and one or more other series or the provisions of such other indenture or indentures which are so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under this Indenture with respect to the Securities of that series and such other series or under such other indenture or indentures, or
(ii) the Company shall have sustained the burden of proving, on application to the Commission and after opportunity for hearing thereon, that trusteeship under this Indenture with respect to the Securities of that series and such other series or such other indenture or indentures is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under this Indenture with respect to the Securities of that series and such other series or under such other indenture or indentures;
(2) the Trustee or any of its directors or executive officers is an obligor upon the Securities or an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a director, officer, partner, employee, appointee or representative of the Company, or of an underwriter (other than the Trustee itself) for the Company who is currently engaged in the business of underwriting,
except that (i) one individual may be a director or an executive officer, or both, of the Trustee and a director or an executive officer, or both, of the Company but may not be at the same time an executive officer of both the Trustee and the Company; (ii) if and so long as the number of directors of the Trustee in office is more than nine, one additional individual may be a director or an executive officer, or both, of the Trustee and a director of the Company; and (iii) the Trustee may be designated by the Company or by any underwriter for the Company to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent or depositary, or in any other similar capacity, or, subject to the provisions of paragraph (1) of this Subsection, to act as trustee, whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is beneficially owned either by the Company or by any director, partner or executive officer thereof, or 20% or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or 10% or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Company or by any director, partner or executive officer thereof, or is beneficially owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this Subsection defined), (i) 5% or more of the voting securities, or 10% or more of any other class of security, of the Company not including the Securities issued under this Indenture and securities issued under any other indenture under which the Trustee is also trustee, or (ii) 10% or more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this Subsection defined), 5% or more of the voting securities of any person who, to the knowledge of the Trustee, owns 10% or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this Subsection defined), 10% or more of any class of security of any
person who, to the knowledge of the Trustee, owns 50% or more of the voting securities of the Company; or
(9) the Trustee owns, on May 15 in any calendar year, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of 25% or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under paragraph (6),(7) or (8) of this Subsection. As to any such securities of which the Trustee acquired ownership through becoming executor, administrator or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition, to the extent that such securities included in such estate do not exceed 25% of such voting securities or 25% of any such class of security. Promptly after May 15 in each calendar year, the Trustee shall make a check of its holdings of such securities in any of the above- mentioned capacities as of such May 15. If the Company fails to make payment in full of the principal of (or premium, if any) or interest on any of the Securities when and as the same becomes due and payable, and such failure continues for 30 days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such 30-day period, and after such date, notwithstanding the foregoing provisions of this paragraph, all such securities so held by the Trustee, with sole or joint control over such securities vested in it, shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes of paragraphs (6), (7) and (8) of this Subsection.
The specification of percentages in paragraphs (5) to (9), inclusive, of
this Subsection shall not be construed as indicating that the ownership of such
percentages of the securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of paragraph (3) or
(7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this Subsection only, (i) the terms "security" and "securities" shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (ii) an obligation shall be deemed to be "in default" when a default in payment of principal shall have continued for 30 days or more and shall not have been cured; and (iii) the Trustee shall not be deemed to be the owner or holder of (A) any security which it holds as collateral security, as trustee or otherwise, for an obligation which is not in default as defined in clause (ii) above, or (B) any security which it holds as collateral security under this Indenture, irrespective of any default hereunder, or (C) any security which it holds as agent for collection, or as custodian, escrow agent or depositary, or in any similar representative capacity.
(d) For the purposes of this section:
(1) The term "underwriter", when used with reference to the Company, means every person who, within three years prior to the time as of which the determination is made, has purchased from the Company with a view to, or has offered or sold for the Company in connection with, the distribution of any security of the Company outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission.
(2) The term "director" means any director of a corporation or any individual performing similar functions with respect to any organization, whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization or a government or political subdivision thereof. As used in this paragraph, the term "trust" shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust, agreement or arrangement whereby a trustee
or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Securities.
(6) The term "executive officer" means the president, every vice president, every trust officer, the cashier, the secretary and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors.
(e) The percentages of voting securities and other securities specified in this Section shall be calculated in accordance with the following provisions:
(1) A specified percentage of the voting securities of the Trustee, the Company or any other person referred to in this Section (each of whom is referred to as a "person" in this paragraph) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding.
(3) The term "amount", when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares and the number of units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer thereof;
provided, however, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges; provided, however, that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes and provided, further, that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 subject to supervision or examination by Federal or State authority and having its Corporate Trust Office in any State of the United States. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trust and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all
property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company within four months prior to a default, as defined in Subsection (c) of this Section, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the Holders of the Securities and the holders of other indenture securities, as defined in Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such four months' period and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this Subsection, or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claims as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such four months' period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the Company and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any such claim by any Person (other than the Company) who is liable thereon, and (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third Person, and (iii) distributions made in cash, securities or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such four months' period;
(C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such four months' period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default, as defined in Subsection (c) of this Section, would occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for
such claim as provided in paragraph (B) or (C), as the case may be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after the beginning of such four months' period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any pre-existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned among the Trustee, the Holders and the holders of other indenture securities in such manner that the Trustee, the Holders and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee and the Holders and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law, whether such distribution is made in cash, securities or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership or proceedings for reorganization is pending shall have jurisdiction (i) to apportion among the Trustee, the Holders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in such special account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee and the Holders and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such four months' period shall be subject to the provisions of this Subsection as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such four months' period, it shall be subject to the provisions of this Subsection if and only if the following conditions exist:
(i) the receipt of property or reduction of claim, which would have given rise to the obligation to account, if such Trustee had continued as Trustee, occurred after the beginning of such four months' period; and
(ii) such receipt of property or reduction of claim occurred within four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of competent jurisdiction or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advances and of the circumstances surrounding the making thereof is given to the Holders at the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction, as defined in Subsection (c) of this Section;
(5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper, as defined in Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of the principal of or interest on any of the Securities or upon the other indenture securities when and as such principal or interest becomes due and payable;
(2) the term "other indenture securities" means securities upon which the Company is an obligor outstanding under any other indenture (i) under which the Trustee is also trustee, (ii) which contains provisions substantially similar to the provisions of this Section, and (iii) under which a default exists at the time of the apportionment of the funds and property held in such special account;
(3) the term "cash transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation;
(5) the term "Company" means any obligor upon the Securities;
and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or
Title 11 of the United States Code.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporated agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607.
If any appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY
As Trustee
By.........................
As Authenticating Agent
By.........................
Authorized Officer
ARTICLE SEVEN
HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than January 15 and July 15 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of the preceding January 1 or July 1, as the case may be, and
(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 702(a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 702(a) a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 702(b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year 1983, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, a brief report dated as of such May 15 with respect to:
(1) its eligibility under Section 609 and its qualifications under Section 608, or in lieu thereof, if to the best of its knowledge it has continued to be eligible and qualified under said Sections, a written statement to such effect;
(2) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to report such advances of such advances so remaining unpaid aggregate not more than 1/2 of 1% of the principal amount of the Securities Outstanding on the date of such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as
collateral security therefor, except in indebtedness based upon a
creditor relationship arising in any manner described in Section
613(b)(2), (3), (4) or (6);
(4) the property and funds, if any, physically in the possession of the Trustee as such on the date of such report;
(5) any additional issue of Securities which the Trustee has not previously reported; and
(6) any action taken by the Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially affects the Securities, except action in respect of a default, notice of which has been or is to be withheld by the Trustee in accordance with Section 602.
(b) The Trustee shall transmit by mail to Holders, as their names and addresses appear in the Security Register, a brief report with respect
to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) since the date of the last report transmitted pursuant to Subsection (a) of this Section (or if no such report has yet been so transmitted, since the date of execution of this instrument) for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities, on property or funds held or collected by it as Trustee and which it has not previously reported pursuant to this Subsection, except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of the Securities Outstanding at such time, such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not, and will not permit any Subsidiary to, consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company or any Subsidiary or convey, transfer or lease its properties and assets substantially as an entirety to the Company or any Subsidiary, unless:
(1) in case the Company shall consolidate with or merge into another corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or a Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, any Principal Property of the Company or of any Subsidiary, or any indebtedness of or equity securities of any Subsidiary or Affiliate (but not including any such indebtedness and equity securities or any other property not owned by the Company or a Subsidiary immediately prior to any such consolidation, merger, conveyance, transfer or lease) would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by this Indenture, the Company or such successor corporation or Person, as the case may be, shall take such steps as shall be necessary effectively to secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company into any other corporation or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor corporation formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; or
(5) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision; or
(6) to secure the Securities pursuant to the requirements of Section 1006 or otherwise; or
(7) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided such action shall not adversely affect the interests of the Holders of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,
(1) changed the Stated Maturity of the principal of, or any instalment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1009, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1009, or the
deletion of this proviso, in accordance with the requirements of Sections
611(b) and 901(8).
A supplemental indenture which changes or eliminates any convenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of
any payment of principal (and premium, if any) or interest on the Securities of that series; and
(3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security of any series and remaining unclaimed for three years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of its business or the business of any Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 1006. Limitation on Liens.
(a) The Company will not, nor will it permit any Subsidiary to, issue, assume or guarantee directly or indirectly any indebtedness for money borrowed (hereinafter in this Article Ten referred to as "Debt"), if such Debt is secured by a mortgage, pledge, security interest, lien or other encumbrance (any such mortgage, pledge, security interest, lien or other encumbrance being hereinafter in this Article Ten referred to as a "mortgage" or "mortgages") upon any Principal Property or upon any indebtedness of or equity securities of any Subsidiary or any Affiliate, now owned or hereafter acquired, without in any such case effectively providing, concurrently with the issuance, assumption or guarantee of such Debt, that the Securities then Outstanding (together with, if the Company shall so determine, any other indebtedness of or guaranteed by the Company or such Subsidiary ranking equally with the Securities and then existing or thereafter created) shall be secured equally and ratably with (or prior to) such Debt; provided, however, that the foregoing restriction shall not apply to
(1) mortgages on any property acquired, constructed or improved by the Company or any Subsidiary after the date of this Indenture which are created or incurred contemporaneously with or
within one hundred twenty days after such acquisition, construction or improvement to secure or provide for the payment of any part of the purchase price of such property or the cost of such construction or improvement (the date of such construction or improvement being, for the purpose of this clause (1), deemed to be the date of completion of such construction or improvement); provided that any such mortgage shall not apply to any other property of the Company of any Subsidiary except, in the case of any construction or improvement, theretofore unimproved real property on which the property so constructed, or the improvement, is located;
(2) mortgages on any property acquired from a corporation which is merged with or into the Company or a Subsidiary or mortgages outstanding on property at the time it is acquired by the Company or a Subsidiary or mortgages outstanding on property of a corporation at the time it becomes a Subsidiary;
(3) mortgages to secure Debt of a Subsidiary to the Company or to another Subsidiary;
(4) mortgages or other restrictions relating to equity securities of any Affiliate under any agreement or arrangement between the Company or any Subsidiary and such Affiliate (or the other stockholder or stockholders of such Affiliate) providing for the operations, financing or purchase of products of such Affiliate or under any agreement among any such parties imposing restrictions on the disposition of or granting options to purchase the equity securities of such Affiliate;
(5) mortgages upon property or assets of the Company or any Subsidiary in favor of any governmental agency or authority or guarantees given for the purpose of financing, through industrial revenue bonds or notes the interest on which is exempt from federal income taxation under Section 103 of the Internal Revenue Code of 1954, as amended, the construction, acquisition or purchase of industrial plants, machinery, equipment or other property or facilities; and
(6) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any mortgage referred to in the foregoing clauses (1) to (5), inclusive; provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal
or replacement shall be limited to all or a part of the property which secured the mortgage so extended, renewed or replaced (plus improvements on such property).
(b) Notwithstanding the provisions of paragraph (a) of this Section 1006, the Company or any Subsidiary may, without equally and ratably securing the Securities, create or assume mortgages which would otherwise be subject to the foregoing restrictions if, at the time of such creation or assumption, and after giving effect thereto, Exempted Indebtedness does not exceed 5% of Consolidated Shareholders' Equity.
SECTION 1007. Limitation on Sale and Lease-Back.
(a) The Company will not, nor will it permit any Subsidiary to, enter into any arrangement with any person providing for the leasing to the Company or Subsidiary of any Principal Property (except for temporary leases for a term of not more than three years), which property has been owned more than one hundred twenty days by the Company or such Subsidiary and has been or is to be sold or transferred by the Company or such Subsidiary to such person (herein referred to as a "Sale and Lease-Back Transaction"), unless either (1) the Company or such Subsidiary would be entitled to incur debt secured by a mortgage on the property to be leased without equally and ratably securing the Securities pursuant to clause (a) or (b) of Section 1006 or (2) the Company shall, and in any such case the Company covenants that it will, apply an amount equal to the fair value (as determined by the Board of Directors) of the property so leased to the retirement, within one hundred twenty days of the effective date of any such Sale and Lease-Back Transaction, of Securities (in the manner, subject to the restrictions and at the redemption prices then applicable to redemption of Securities at the option of the Company) or other indebtedness of the Company with a maturity in excess of one year from the date of such Sale and Lease-Back Transaction and which ranks on a parity with the Securities.
(b) Notwithstanding the provisions of paragraph (a) of this Section 1007, the Company or any Subsidiary may enter into Sale and Lease-Back Transactions which would otherwise be prohibited by the foregoing restrictions if, at the time such transactions are entered into, and after
giving effect thereto, Exempted Indebtedness does not exceed 5% of Consolidated Shareholders' Equity.
SECTION 1008. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of Sections 1004 to 1007, inclusive, and if the company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.
SECTION 1009. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term, provision or condition set forth in Section 1004 to 1007, inclusive, with respect to the Securities of any series if before the time for such compliance the Holders of at least 66 2/3% in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of other principal amount of Securities of such series to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that instalments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the
election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such Series; provided that Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 31 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1006 and 1007.
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.
THE MEAD CORPORATION
BY JAMES R. SAMARTINI
Attest:
GEORGE J. MALY, JR.
BANKERS TRUST COMPANY
[SEAL]
BY M. K. KLUGMAN
Attest:
HARRIET A. DRANDOFF
[SEAL]
STATE OF OHIO }
COUNTY OF MONTGOMERY }SS.:
On the 23rd day of July, 1982, before me personally came James R. Samartini, to me known, who, being by me duly sworn, did depose and say that he is a Vice President of THE MEAD CORPORATION, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
EVA L. KEMPFER
EVA L. KEMPFER, Notary Public
In and for the State of Ohio
My Commission Expires June 29, 1987
STATE OF NEW YORK }
COUNTY OF NEW YORK } SS.:
On the 22nd day of July, 1982, before me personally came M. K. Klugman, to me known, who, being by me duly sworn, did depose and say that he is a Vice President of BANKERS TRUST COMPANY, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
ROSEMARY MELENDEZ
ROSEMARY MELENDEZ
Notary Public, State of New York
No. 4679497
Qualified in Bronx County
Certificate Filed in New York County
Commission Expires March 30, 1984
THE MEAD CORPORATION
TO
BANKERS TRUST COMPANY,
Trustee
First Supplemental Indenture
Dated as of March 1, 1987
TO INDENTURE
Dated as of July 15, 1982
FIRST SUPPLEMENTAL INDENTURE, dated as of March 1, 1987, between THE MEAD CORPORATION, a corporation duly organized and existing under the laws of the State of Ohio (the "Company"), having its principal offices at Dayton, Ohio, and BANKERS TRUST COMPANY, a corporation duly organized and existing under the laws of the State of New York, as Trustee (the "Trustee").
WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of July 15, 1982 (the "Indenture"), providing for the issuance from time to time of its unsecured debentures, notes and other evidences of indebtednesses (herein and therein called the "Securities"), to be issued in one or more series as in the Indenture provided;
WHEREAS, Section 901(5) of the Indenture provides, among other things, that the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into an indenture supplemental to the Indenture for the purpose of changing or eliminating any provision of the Indenture, provided that such change or elimination shall not be effective as to any Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision;
WHEREAS, the Company pursuant to the foregoing authority, proposes in and by this First Supplemental
Indenture to amend the Indenture in certain respects with respect to the Securities of any series created on or after the date hereof; and
WHEREAS, all things necessary to make this First Supplemental Indenture a valid agreement of the Company, in accordance with its terms, have been done.
AGREEMENT
NOW, THEREFORE, the Company and the Trustee hereby agree as follows:
1. Subparagraph (iii) of the definition of "Outstanding" set forth in
Section 101 of the Indenture is hereby renumbered subparagraph (iv), and a new
subparagraph (iii) is added as follows:
"(iii) Securities for whose payment or redemption money or U.S. Government Obligations as contemplated by Section 1304 in the necessary amount have been theretofore deposited with the Trustee (or another trustee satisfying the requirements of Section 609) in trust for the Holders of such Securities in accordance with Section 1305; and"
2. Section 203 of the Indenture is hereby amended by adding immediately after the sixth paragraph thereof the following:
"[The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Securities of this series and (b) certain restrictive covenants and other provisions, in each case upon compliance by the Company with certain conditions set forth therein, which provisions apply to the Securities of this series.]"
3. Section 301 of the Indenture is hereby amended by deleting the
word "and" from the end of Section 301(9), by renumbering Section 301(10) as
Section 301(11) and by inserting a new Section 301(10) as follows:
"(10) the application, if any, of either or both of Section 1302 and
Section 1303 to the Securities of the series; and"
4. The fifth paragraph of Section 1003 of the Indenture is hereby amended by adding "or received by the Trustee (or another trustee satisfying the requirements of Section 609) in respect of U.S. Government Obligations deposited with the Trustee (or such other trustee) pursuant to Section 1304," immediately after "Any money deposited with the Trustee or any Paying Agent" in the first line thereof.
5. The Indenture is hereby amended by adding a new Article Thirteen as follows:
ARTICLE THIRTEEN
If pursuant to Section 301 provision is made for either or both of (a) defeasance of the Securities of a series under Section 1302 or (b) covenant defeasance of the Securities of a series under Section 1303, then the provisions
of such Section or Sections, as the case may be, together with the other provisions of this Article Thirteen, shall be applicable to the Securities of such series, and the Company may at its option by Board Resolution, at any time, with respect to the Securities of such series, elect to have either Section 1302 (if applicable) or Section 1303 (if applicable) be applied to the Outstanding Securities of such series upon compliance with the conditions set forth below in this Article Thirteen.
Upon the Company's exercise of the above option applicable to this Section, the Company shall be deemed to have been discharged from its obligations with respect to the Outstanding Securities of such series on the date the conditions set forth below are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities of such series and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of Outstanding Securities of such series to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) and interest on such Securities when such payments are due, (B) the Company's obligations with respect to such Securities under Sections 304, 305, 306, 607, 1002 and 1003, (C) the rights, powers, trusts, duties, and immunities of the Trustee hereunder and (D) this Article Thirteen. Subject to compliance with this Article Thirteen, the Company may exercise its option under this Section 1302 notwithstanding the prior exercise of its option under Section 1303 with respect to the Securities of such series.
Upon the Company's exercise of the above option applicable to this Section, the Company shall be released from its obligations under Sections 801, 1005, 1006, 1007, 1008,
501(4) (as to Sections 801, 1005, 1006, 1007 and 1008), 501(5), 501(6), 501(7) and 501(8) (if Section 501(8) is specified as applicable to the Securities of such series) with respect to the Outstanding Securities of such series on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"). For this purpose, such covenant defeasance means that, with respect to the Outstanding Securities of such series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section, whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Securities of such series:
(1) the Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 609 who shall agree to comply with the provisions of this Article Thirteen applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money or in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (i) the principal of (and premium, if any, on) and each installment of principal of (and premium, if any) and interest on the Out-
standing Securities of such series on the Stated Maturity of such principal or installment of principal or interest and (ii) any mandatory sinking fund payments or analogous payments applicable to the Outstanding Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities. For this purpose, "U.S. Government Obligations" means securities that are (x) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific
payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.
(2) No Event of Default or event with which notice or lapse of time or both would become an Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit or, insofar as subsections 501(6) and (7) are concerned, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not cause the Trustee for the
Securities of such series to have a conflicting interest as defined in
Section 608 and for purposes of the Trust Indenture Act with respect to
any securities of the Company.
(4) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound.
(5) Such defeasance or covenant defeasance shall not cause any Securities of such series then listed on any registered national securities exchange under the Securities Exchange Act of 1934, as amended, to be delisted.
(6) In the case of an election under Section 1302, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred.
(7) In the case of an election under Section 1303, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
(8) Such defeasance or covenant defeasance shall be effected in compliance with any additional terms, conditions or limitations which may be imposed on the Company in connection therewith pursuant to Section 301
(9) The Company shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to either the defeasance under Section 1302 or the covenant defeasance under Section 1303 (as the case may be) have been complied with.
Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee -- collectively, for purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in respect of the Outstanding Securities of such series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities of such series.
Anything in this Article Thirteen to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1304 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent defeasance or covenant defeasance.
6. All provisions of this First Supplemental Indenture shall be deemed to be incorporated in, and made a
part of, the Indenture; and the Indenture, as supplemented by this First Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
7. The Trustee accepts the trusts created by the Indenture, as supplemented by this First Supplemental Indenture, and agrees to perform the same upon the terms and conditions in the Indenture, as supplemented by this First Supplemental Indenture.
8. The recitals contained in the Indenture and the Securities, except the Trustee's certificate of authentication, shall be taken as statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of the Indenture or the Securities.
9. All amendments to the Indenture made hereby shall have effect only with respect to the Securities of any series created on or after the date hereof, and not with respect to the Securities of any series created prior to the date hereof.
10. All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Indenture.
11. This First Supplemental Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, and their respective seals to be hereunto affixed and attested, all as of the date first above written.
THE MEAD CORPORATION
By: /s/ W. A. Enouen ----------------------------- William A. Enouen Title: Senior Vice President and Chief Financial Officer [Corporate Seal] Attest: /s/ George J. Maly Jr. ---------------------------- George J. Maly Jr. Title: Secretary and Associate General Counsel |
BANKERS TRUST COMPANY
By: /s/ Daniel C. Brown, Jr. ----------------------------- Daniel C. Brown, Jr. Title: Vice President [Corporate Seal] Attest: /s/ Mary A. Polar ---------------------------- Mary A. Polar Title: Assistant Secretary |
STATE OF OHIO ) ) SS.: COUNTY OF MONTGOMERY ) |
On the 24th day of March, 1987, before me personally came William A. Enouen, to me known, who, being duly sworn, did depose and say that he is Senior Vice President and Chief Financial Officer of THE MEAD CORPORATION, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
/s/ Laurene L. Holloway ---------------------------------- LAURENE L. HOLLOWAY, Notary Public Notary Public, State of Ohio No.________________ |
Qualified in _________________County
Commission Expires August 28, 1990
STATE OF NEW YORK ) ) SS.: COUNTY OF NEW YORK ) |
On the 26th day of March, 1987, before me personally came Daniel C. Brown, Jr., to me known, who, being duly sworn, did depose and say that he is Vice President of BANKERS TRUST COMPANY, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
/s/ Joanne Itskovitz --------------------------------- JOANNE ITSKOVITZ Notary Public, State of New York No. 4803877 Qualified in Westchester County Commission Expires March 30, 1988 |
[EXECUTION COPY]
THE MEAD CORPORATION
TO
BANKERS TRUST COMPANY, TRUSTEE
Second Supplemental Indenture
Dated as of October 15, 1989
TO INDENTURE
Dated as of July 15, 1982
As Amended by
First Supplemental Indenture
Dated as of March 1, 1987
SECOND SUPPLEMENTAL INDENTURE, dated as of October 15, 1989, between THE MEAD CORPORATION, a corporation duly organized and existing under the laws of the State of Ohio (the "Company"), having its principal offices at Dayton, Ohio and BANKERS TRUST COMPANY, a corporation duly organized and existing under the laws of the State of New York, as Trustee (the "Trustee").
WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of July 15, 1982, and a First Supplemental Indenture (the "First Supplemental Indenture"), dated as of March 1, 1987 (as so supplemented, the "Indenture"), providing for the issuance from time to time of its unsecured debentures, notes and other evidences of indebtedness (herein and therein called the "Securities"), to be issued in one or more series as in the Indenture provided;
WHEREAS, Sections 901(5) and 901(9) of the Indenture provide, among other things, that the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into an indenture supplemental to the Indenture (1) for the purpose of changing or eliminating any provision of the Indenture, provided that such change or elimination becomes effective only when there is no Security
Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision and (2) for the purpose of making any other provisions with respect to matters arising under the Indenture, provided that such action does not adversely affect the interests of the Holders of Securities of any series in any material respect;
WHEREAS, the Company pursuant to the foregoing authority, proposed in and by this Second Supplemental Indenture to amend the Indenture in certain respects with respect to the Securities of any series created on or after the date hereof; and
WHEREAS, all things necessary to make this Second Supplemental Indenture a valid agreement of the Company, in accordance with its terms, have been done.
AGREEMENT
NOW, THEREFORE, the Company and the Trustee hereby agree as follows:
1. Section 101 of the Indenture is hereby amended by adding the following definitions:
"Authorized Newspaper" means a newspaper in an official language of the country of publication or in the English language, in either case customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in the place in connection with which the term is used or in the financial community of such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form of bearer securities established pursuant to Section 201 that is payable to bearer.
"CEDEL S.A." means Centrale de Livraison de Valeurs Mobilieres S.A.
The term "coupon" means any interest coupon appertaining to a Bearer Security.
"Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary by the Company pursuant to Section 301 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, "Depositary" as used with respect to the Securities of any such series shall mean the Depositary with respect to the Debt Securities of that series.
"Designated Currency" has the meaning specified in Section 313.
"Dollar" or "$" means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to time by the Council of the European Communities.
"Euro-clear" means Morgan Guaranty Trust Company of New York, Brussels office, or its successor as operator of the Euro-clear System.
"European Communities" means the European Economic Community, the European Coal and Steel Community and the European Atomic Energy Community.
"Exchange Rate" means the exchange rate set forth in the Officers' Certificate or supplemental indenture establishing a series of Securities pursuant to Section 301.
"Foreign Currency" means a currency issued by the government of any country other than the United States of America.
"Global Security" means a Registered or Bearer Security evidencing all or part of a series of Securities, issued to the Depositary for such series or its nominee in accordance with Section 303, and bearing the legend prescribed in Section 303.
"Registered Security" means any Security in the form of registered securities established pursuant to Section 201 that is registered in the Security Register.
"United States" means the United States of America (including the States thereof and the District of Columbia), its territories and possessions and other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States Federal income tax purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" has the meaning specified in Section 1304.
2. The definitions of "Business Day", "Holder", "Place of Payment" and "Securities" in Section 101 of the Indenture are hereby amended to read in full as follows:
"Business Day", when used with respect to any Place of Payment or any other particular location referred to in the Indenture or in the Securities, means, except as may otherwise be provided in the form of Securities of any particular series pursuant to the provisions of this Indenture, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law to close.
"Holder", with respect to a Registered Security, means a Person in whose name such Registered Security is registered in the Security Register and, with respect to a Bearer Security or a coupon, means the bearer thereof.
"Place of Payment", when used with respect to the Securities of any series
payable in Dollars, means the Corporate Trust Office of the Trustee in the
Borough of Manhattan, the City and State of New York, when used with
respect to the Securities of any series payable in a Foreign Currency,
means the place or places where such Foreign Currency is the legal tender,
and, when used with respect to the Securities of any series, means such
other place or places, if any, where the principal of (and premium, if any)
and any interest on the Securities of that series are payable as specified
as contemplated by Section 301, in all cases subject to the provisions of
Section 1002.
"Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. Where appropriate in the context of this Indenture, the term "Securities" includes any coupons appertaining to any Bearer Securities.
3. Section 104 of the Indenture is hereby amended as follows:
(a) By adding the following immediately after the first sentence of subdivision (a):
If Securities of a series are issuable in whole or part as Bearer Securities, any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may, alternatively, be embodied in and evidenced by the record of Holders of Securities voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities duly called and held in accordance with the provisions of Article Fourteen, or a combination of such instruments and any such record.
(b) By adding the following at the end of subdivision (a):
The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 1406.
(c) By relettering Section 104(d) as Section 104(h) and by adding the following immediately prior to new Section 104(h):
(d) The principal amount and serial numbers of Bearer Securities held by any Person, and the date of holding the same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary, wherever situated, if such certificate shall be deemed by the Trustee to be satisfactory, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Bearer Securities in the amount and with the serial numbers therein described; or such facts may be proved by the certificate or affidavit of the Person holding such Bearer Securities, if such certificate or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the Company may assume that such ownership of any Bearer Security continues until (1) another certificate of affidavit bearing a later date issued in respect of the same Bearer Security is produced, or (2) such Bearer Security is produced to the Trustee by some other Person, or (3) such Bearer Security is surrendered in exchange for a Registered Security, or (4) such Bearer Security is no longer Outstanding.
(e) The fact and date of execution of any such instrument or writing, the authority of the Person executing the same and the principal amount and serial numbers of Bearer Securities held by the Person so executing such instrument or writing and the date of holding the same may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section.
(f) If the Company shall solicit from the Holders of Securities of any series any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by Board Resolution, fix in advance a record date for the determination of Holders of Registered Securities entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. Any such record date shall be fixed at the Company's discretion.
If such a record date is fixed, such request, demand, authorization, direction, notice, consent and waiver or other Act may be sought or given before or after the record date, but only the Holders of Registered Securities of record at the close of business on such record date shall be deemed to be Holders of Registered Securities for the purpose of determining whether Holders of the requisite proportion of Securities of such series Outstanding have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Registered Securities of such series Outstanding shall be computed as of such record date.
(g) For purposes of determining the principal amount of Outstanding Securities of any series the Holders of which are required, requested or permitted to give any request, demand, authorization, direction, notice, consent, waiver or take any other Act under this Indenture and for purposes of determining whether a quorum is present at a meeting of Holders of Securities, (i) each Original Issue Discount Security shall be deemed to have the principal amount determined by the Trustee that would be due and payable upon acceleration of the Maturity thereof pursuant to Section 502 and the terms of such Original Issue Discount Security as of the date such Act is delivered to the Trustee and, where it is hereby expressly required, the Company and (ii) each Security denominated in a Foreign Currency or composite currency shall be deemed to have the principal amount determined by the exchange rate agent specified pursuant to Section 301 by converting the principal amount of such Security in the currency in which such Security is denominated into Dollars at the Exchange Rate as of the date such Act is delivered to the Trustee and, where it is hereby expressly required, to the Company (or, if there is no such rate on such date, such rate as determined by such exchange rate agent).
4. Section 106 of the Indenture is hereby amended as follows:
(a) By deleting the first sentence of the first paragraph and inserting in its place the following:
Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any
event, (1) such notice shall be sufficiently given to Holders of Registered Securities if in writing and mailed, first-class postage prepaid, to each Holder of a Registered Security affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice; and (2) such notice shall be sufficiently given to Holders of Bearer Securities if published in an Authorized Newspaper in The City of New York and, if the Securities of such series are then listed on the International Stock Exchange of the United Kingdom and the Republic of Ireland and such stock exchange shall so require, in London and, if the Securities of such series are then listed on the Luxembourg Stock Exchange and such stock exchange shall so require, in Luxembourg and, if the Securities of such series are then listed on any other stock exchange outside the United States and such stock exchange shall so require, in any other required city outside the United States or, if not practicable, in Europe on a Business Day at least twice, the first such publication to be not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice.
(b) By adding the following to the end thereof:
In case by reason of the suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearer Securities as provided above, then such notification to Holders of Bearer Securities as shall be given with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder. Neither failure to give notice by publication to Holders of Bearer Securities as provided above, nor any defect in any notice so published, shall affect the sufficiency of any notice mailed to Holders of Registered Securities as provided above.
Any request, demand, authorization, direction, notice, consent, election, waiver or other Act required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.
5. Section 301 of the Indenture (as amended by the First Supplemental Indenture) is hereby further amended as follows:
(a) By deleting Section 301(8) and inserting in its place the following:
(8) the denominations in which Registered Securities of the series, if any, shall be issuable, if other than denominations of $1,000 and any integral multiple thereof, and the denominations in which Bearer Securities of the series, if any, shall be issuable if other than the denomination of $5,000;
(b) By deleting the word "and" from the end of Section 301(10), by renumbering Section 301(11) as Section 301(18) and by inserting the following immediately prior to new Section 301(18):
(11) whether Bearer Securities of the series are to be issuable and, if so, whether Registered Securities of the series are also to be issuable;
(12) if Bearer Securities of the series are to be issuable, (x) whether
interest in respect of any portion of a temporary Security in global form
(representing all of the Outstanding Bearer Securities of the series)
payable in respect of any Interest Payment Date prior to the exchange of
such temporary Security for definitive Securities of the series shall be
paid to any clearing organization with respect to the portion of such
temporary Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any such
interest payment received by a clearing organization will be credited to
the Persons entitled to interest payable on such Interest Payment Date, and
(y) the terms upon which interests in such temporary Security in global
form may be exchanged for interests in a permanent Global Security or for
definitive Securities of the series and the terms upon which interest in a
permanent Global
Security, if any, may be exchanged for definitive Securities of the series;
(13) whether the Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depositary for such Global Security or Securities;
(14) if other than Dollars, the currency of denomination of the Securities of any series, which may be in Dollars, any Foreign Currency or any composite currency, including but not limited to the ECU, and, if such currency of denomination is a composite currency other than the ECU, the agency or organization, if any, responsible for overseeing such composite currency;
(15) if other than Dollars, the currency or currencies in which payment of the principal of (and premium, if any) and interest on the Securities of the series will be made, and the currency or currencies, if any, in which payment of the principal of (and premium, if any) or the interest on Registered Securities of the series, at the election of each of the Holders thereof, may also be payable, and the periods within which and the terms and conditions upon which such election is to be made, the manner in which the exchange rate with respect to such payment shall be determined and the agent appointed by the Company in connection with the determination of the exchange rate, and whether Section 312 will be applicable to Securities of the Series;
(16) if the amount of payments of principal of (and premium, if any) or interest on the Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined;
(17) whether and under what conditions additional amounts shall be payable to Holders of Securities pursuant to or in a manner different from Section 1010; and
(c) By adding the following at the end of Section 301:
Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be
payable, with different Redemption Dates and may be denominated in different currencies or payable in different currencies.
6. The second sentence of Section 302 of the Indenture is hereby amended by adding the following to the end thereof:
, except that Bearer Securities of each series, if any, shall be issuable in the denomination of $5,000.
7. Section 303 of the Indenture is hereby amended as follows:
(a) By adding the following to the end of the first paragraph:
Coupons shall bear the facsimile signature of the Treasurer or any Assistant Treasurer of the Company.
(b) By adding the following to the end of the first sentence of the third paragraph:
Security or upon exchange of a portion of a temporary Global Security shall be deemed to be delivery in connection with its original issuance of such beneficial owner's interest is such permanent Global Security. To the extent authorized in or pursuant to a Board Resolution and set forth in an Officers' Certificate, or established in one or more indentures supplemental hereto, such Company Order may be given by any one officer of the Company, may be electronically transmitted, and may provide instructions as to registration of holders, principal amounts, rates of interest, maturity dates and other matters contemplated by such Board Resolution and Officers' Certificate or supplemental indenture to be so instructed in respect thereof. Before authorizing and delivering the first Securities of any series (and upon reasonable request of the Trustee thereafter), the Company shall deliver to the Trustee (i) the certificates called for under Sections 201 and 301 hereof and (ii) an Opinion of Counsel described in the next sentence.
(c) By adding the following immediately after the third paragraph:
If the Company shall establish pursuant to Section 301 that the Securities of a series are to be issued in whole or in part in the form of one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance with this Section and the Company Order with respect to such series, authenticate and deliver one or more Global Securities in temporary or permanent form that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of Outstanding Securities of such series to be represented by one or more Global Securities; (ii) shall be registered, if in registered form, in the name of the Depositary for such Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instruction and (iv) shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for Securities in definitive form in accordance with the provisions of the Indenture and the terms of the Securities, this Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary."
Each Depositary designated pursuant to Section 301 for a Global Security in registered form must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Securities Exchange Act of 1934 and any other applicable statute or regulation.
(d) By deleting the fourth paragraph and inserting the following in its place:
Each Registered Security shall be dated the date of its authentication. Each Bearer Security shall be dated as of the date specified as contemplated by Section 301.
(e) By adding the following at the end of the fifth paragraph:
Except as permitted by Section 306 or 307, the Trustee shall not authenticate and deliver any Bearer Security unless all appurtenant coupons for interest then matured have been detached and cancelled.
8. Section 304 of the Indenture is hereby amended by deleting the text of
Section 304 in its entirety and inserting the following in its place:
Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, in registered form or, if authorized, in bearer form with one or more coupons or without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. In the case of any series issuable as Bearer Securities, such temporary Securities may be in global form and shall be delivered only in compliance with the applicable conditions set forth in Section 303.
If temporary Securities of any series are issued in global form, any such temporary Global Security shall, unless otherwise provided therein, be delivered to the London office of a depositary or common depositary (the "Common Depositary"), for the benefit of Euro-clear and CEDEL S.A. for credit to the respective accounts of the beneficial owners of such Securities (or to such other accounts as they may direct).
Without unnecessary delay but in any event not later than the date specified in, or determined pursuant to the terms of, any such temporary Global Security of a series (the "Exchange Date"), the Company shall deliver to the Trustee definitive Securities of that series in aggregate principal amount equal to the principal amount of such temporary Global Security, executed by the Company. On or after the Exchange Date such temporary Global Security shall be surrendered by the Common Depositary to the Trustee, as the Company's agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Securities of that series, without charge and the Trustee shall authenticate and deliver, in exchange for each portion of such temporary Global Security a like aggregate principal amount of
Unless otherwise specified in such temporary Global Security, the interest of a beneficial owner of Securities of a series in a temporary Global Security shall be exchanged for definitive Securities of the same series and of like tenor following the Exchange Date upon the earlier of (i) the receipt by Euro-clear or CEDEL S.A., as the case may be, after the Exchange Date from the account holder of a certificate in the form set forth in Exhibit D to this Indenture, or (ii) the receipt by Euro-clear or CEDEL S.A., as the case may be, of instructions from the account holder to request such exchange on his behalf and the delivery to Euro-clear or CEDEL S.A., as the case may be, of a certificate in the form set forth in Exhibit A to this Indenture, dated no earlier than 15 days prior to the Exchange Date, copies of which certificate shall be available from the offices of Euro-clear and CEDEL S.A., the Trustee, any Authenticating Agent appointed for such series of Securities and each Paying Agent. Unless otherwise specified in such temporary Global Security, any such exchange shall be made free of charge to the beneficial owners of such temporary Global Security, except that a Person receiving definitive Securities must bear the cost of insurance, postage, transportation and the like in the event that such Person does not take delivery of such definitive Securities in person at the offices of
Euro-clear or CEDEL S.A. Definitive Securities to be delivered in exchange for any portion of a temporary Global Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder, except that, unless otherwise specified as contemplated by Section 301, interest payable on a temporary Global Security on any Interest Payment Date for Securities of such series shall be payable to Euro-clear and CEDEL S.A. on such Interest Payment Date upon delivery by Euro-clear and CEDEL S.A. to the Trustee of a certificate or certificates in the form set forth in Exhibit C to this Indenture, for credit without further interest on or after such Interest Payment Date to the respective accounts of the Persons for which Euro-clear or CEDEL S.A., as the case may be, hold such temporary Global Security on such Interest Payment Date and who have each delivered to Euro-clear or CEDEL S.A., as the case may be, a certificate in the form set forth in Exhibit D to this Indenture. Any interest so received by Euro-clear and CEDEL S.A. and not paid as herein provided shall be returned to the Trustee immediately prior to the expiration of two years after such Interest Payment Date in order to be repaid to the Company in accordance with Section 1003.
9. Section 305 of the Indenture is hereby amended as follows:
(a) By deleting this second paragraph in its entirety and the first sentence of the third paragraph and inserting the following in their place:
Upon surrender for registration of transfer of any Registered Security of any series at the office or agency of the Company maintained for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Securities of the same series of any authorized denomination or denominations, of like tenor and aggregate principal amount.
Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for Securities in definitive form, a Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.
At the option of the Holder, Registered Securities of any series (except a Global Security) may be exchanged for other Registered Securities of the same series of any authorized denomination or denominations, of a like aggregate principal amount, upon surrender of the Registered Securities to be exchanged at such office or agency. Bearer Securities may not be delivered by the Trustee in exchange for Registered Securities.
represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the
United States. Notwithstanding the foregoing, in case a Bearer Security of
any series is surrendered at such office or agency in exchange for a
Registered Security of the same series after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and before the opening of business at such
office or agency on the related date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to
such Interest Payment Date or proposed date of payment, as the case may be.
(b) By adding the following immediately after the third paragraph:
If at any time the Depositary for the Securities of a series notifies the Company that it is unwilling or unable to continue as Depositary for the Securities of such series or if at any time the Depositary for the Securities of such series shall no longer be eligible under Section 303, the Company shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for the Securities of such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company's election pursuant to Section 301(13) shall no longer be effective with respect to the Securities of such series and the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive form in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such series in exchange for such Global Security or Securities.
The Company may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities. In such event the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive form and in an aggregate
principal amount equal to the principal amount of the Global Security or Securities representing such series in exchange for such Global Security or Securities.
If (a) there shall have occurred and be continuing an Event of Default or an event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default with respect to a series of Securities issued in the form of one or more Global Securities, or (b) if specified by the Company pursuant to Section 301 with respect to a series of Securities, the Depositary for such series of Securities may surrender a Global Security for such series of Securities in exchange in whole or in part for Securities of such series in definitive form. Thereupon, the Company shall execute, and the Trustee shall authenticate and deliver, without service charge:
(i) to each Person specified by such Depositary a new Security or Securities of the same series, of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities delivered to Holders thereof.
In any exchange provided for in any of the preceding three paragraphs, the Company will execute and the Trustee will authenticate and deliver Securities (a) in definitive registered form in authorized denominations, if the Securities of such series are issuable as Registered Securities, (b) in definitive bearer form in authorized denominations, with coupons attached, if the Securities of such series are issuable as Bearer Securities or (c) as either Registered or Bearer Securities, if the Securities of such series are issuable in either form; provided, however, that no definitive Bearer Security shall be delivered in exchange for a temporary Global Security unless the Company or its agent shall have received from the person entitled to receive the definitive Bearer Security a certificate substantially in the form set forth in Exhibit A hereto in accordance with Section 303; and provided further that delivery of a Bearer Security shall occur only outside the United States; and provided further that no definitive Bearer Security will be
issued if the Company has reason to know that such certificate is false.
Upon the exchange of a Global Security for Securities in definitive form,
such Global Security shall be cancelled by the Trustee. Registered
Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver Bearer Securities issued in
exchange for a Global Security pursuant to this Section to the persons, and
in such authorized denominations, as the Depositary for such Global
Security, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee; provided, however, that no
definitive Bearer Security shall be delivered in exchange for a temporary
Global Security unless the Company or its agent shall have received from
the person entitled to receive the definitive Bearer Security a certificate
substantially in the form set forth in Exhibit A to this Indenture in
accordance with Section 303; and provided further that delivery of a Bearer
Security shall occur only outside the United States; and provided further
that no definitive Bearer Security will be issued if the Company has reason
to know that such certificate is false.
(c) By adding the following to the end of the sentence comprising the seventh paragraph:
, or (iii) to exchange any Bearer Security so selected for redemption except that such a Bearer Security may be exchanged for a Registered Security of that series (if the Securities of such series are issuable as Registered Securities), provided that such Registered Security shall be simultaneously surrendered for redemption with written instruction for payment consistent with the provisions of this Indenture.
10. The third paragraph of Section 306 is hereby amended by adding the following to the end of the sentence comprising the third paragraph:
; provided, however, that payment of principal of (and premium, if any) and
any interest on Bearer Securities shall, except as otherwise provided in
Section 1002, be payable only at an office or agency located outside the
United States; and provided, further, that, with respect to any such
coupons, interest represented thereby (but not any additional amounts
payable as provided in Section 1010), shall be payable only upon
presentation and surrender of the coupons appertaining thereto.
11. Section 307 of the Indenture is hereby amended as follows:
(a) By adding the following to the end of the first paragraph:
In case a Bearer Security of any series is surrendered in exchange for a Registered Security of such series after the close of business (at an office or agency in a Place of Payment for such series) on any Regular Record Date and before the opening of business (at such office or agency) on the next succeeding Interest Payment Date, such Bearer Security shall be surrendered without the coupon relating to such Interest Payment Date and interest will not be payable on such Interest Payment Date in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture.
(b) By adding the following to the end of Section 307(1):
In case a Bearer Security of any series is surrendered at the office or agency in a Place of Payment for such series in exchange for a Registered Security of such series after the close of business at such office or agency on any Special Record Date and before the opening of business at such office or agency on the related proposed date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the coupon relating to such proposed date of payment and Defaulted Interest will not be payable on such proposed date of payment in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture.
12. Section 308 of the Indenture is hereby amended by adding the following to the end thereof:
Title to any Bearer Security and any coupons appertaining thereto shall pass by delivery. The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any Bearer Security and the bearer of any coupon as the absolute owner of such Bearer Security or coupon for the purpose of receiving payment thereof or on account thereof and for all other purposes whatsoever, whether or not such Bearer Security or coupon be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and holders of beneficial interests in any Global Security, the operation of customary practices governing the exercise of the rights of the Depositary as Holder of such Global Security. None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
13. The Indenture is hereby amended by adding new Sections 311 and 312 immediately after Section 310, as follows:
Whenever any provision of this Indenture or a Security contemplates that certification be given by a Person entitled to delivery of a Bearer Security, such certification shall be provided substantially in the form of Exhibit A hereto, with only such changes as shall be approved by the Company.
The Company may provide, pursuant to Section 301, for the Securities of any series that, to the fullest extent provided under applicable law, (a) the
obligation, if any, of the Company to pay the principal of (and premium, if any) and interest on the Securities of such series and any appurtenant coupons in a Foreign Currency, composite currency or Dollars (the "Designated Currency") as may be specified pursuant to Section 301 is of the essence and agree that judgments in respect of such Securities shall be given in the Designated Currency; (b) the obligation of the Company to make payments in the Designated Currency of the principal of (and premium, if any) and interest on such Securities and any appurtenant coupons shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the Designated Currency that the Holder receiving such payment may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) in the country of issue of the Designated Currency in the case of Foreign Currency or Dollars or in the international banking community in the case of a composite currency on the Business Day immediately following the day on which such Holder receives such payment; (c) if the amount in the Designated Currency that may be so purchased for any reason falls short of the amount originally due, the Company shall pay such additional amounts as may be necessary to compensate for such shortfall; and (d) any obligation of the Company not discharged by such payment shall be due as a separate and independent obligation and, until discharged as provided herein, shall continue in full force and effect.
14. Section 401 of the Indenture is hereby amended as follows:
(a) By adding the following to the end of the first parenthetical in the
first paragraph: "and any right to receive additional amounts as provided in
Section 1010."
(b) By deleting in the parenthetical in Section 401(1)(A) the word "and" immediately prior to subsection (ii), and adding the following immediately after the end of subsection (ii):
(iii) coupons appertaining to Bearer Securities surrendered in exchange for Registered Securities and maturing after such exchange, surrender of which is not required or has been waived as provided in Section 305, and (iv) coupons appertaining to Bearer Securities called for redemption and maturing after the relevant Redemption Date, surrender of which has been waived as provided in Section 1106.
15. Section 506 of the Indenture is hereby amended as follows:
(a) By adding the following to the end of clause SECOND of Section 506:
Except to the extent otherwise provided in Section 312 if such Section is specified as applicable to Securities of a particular series, the Holders of each series of Securities denominated in ECU, any other composite currency or a Foreign Currency and any matured coupons relating thereto shall be entitled to receive a ratable portion of the amount determined by the exchange rate agent specified pursuant to Section 301 by converting the principal amount Outstanding of such series of Securities and matured but unpaid interest on such series of Securities in the currency in which such series of Securities is denominated into Dollars at the Exchange Rate as of the date of declaration of acceleration of the Maturity of the Debt Securities (or, if there is no such rate on such date, such rate as determined by such exchange rate agent).
(b) By adding the following to the end thereof:
Upon receipt by the Trustee of any declaration of acceleration, or rescission and annulment thereof, with respect to Securities of a series all or part of which is represented by a Global Security, the Trustee shall establish a record date for determining Holders of Outstanding Securities of such series entitled to join in such declaration of acceleration, or rescission and annulment, as the case may be, which record date shall be at the close of business on the day the Trustee receives such declaration of acceleration, or rescission and annulment, as the case may be. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such
16. Section 512 of the Indenture is hereby amended by adding the following to the end thereof:
17. Section 513 of the Indenture is hereby amended by adding the following to the end thereof:
18. Section 608(b) of the Indenture is hereby amended by deleting the words "by mail" and inserting the following in their place:
in the manner and to the extent provided in Section 703(c)
19. Section 610(f) of the Indenture is hereby amended by deleting the words "by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register", and inserting in their place the words "in the manner provided in Section 106."
20. Section 701 of the Indenture is hereby amended by adding the following to the end thereof:
The Trustee shall preserve for at least two years the names and addresses
of Holders of Bearer Securities filed with the Trustee pursuant to
Section 703(c).
21. Section 703 of the Indenture is hereby amended as follows:
(a) By deleting the following in the first sentence of Section 703(b): ", as their names and addresses appear in the Security Register," and inserting in its place the following: ", as provided in Section 703(c)."
(b) By relettering Section 703(c) as Section 703(d) and inserting the following immediately prior to new Section 703(d):
(c) Reports pursuant to this Section shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names and addresses of such Holders appear in the Security Register;
(2) to such Holders of Bearer Securities as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose; and
(3) except in the case of reports pursuant to Subsection (b) of this Section, to each Holder of a Security whose name and address is preserved at the time by the Trustee, as provided in Section 702(a).
22. Section 704(3) of the Indenture is hereby amended by deleting the words "as their names and addresses appear in the Security Register", and inserting the following in their place:
in the manner and to the extent provided in Section 703(c) with respect to reports pursuant to Section 703(a)
23. Section 801(1) of the Indenture is hereby amended to insert the following immediately after the words "interest on all the Securities":
(including all additional amounts, if any, payable pursuant to Section 1010)
24. Section 901(4) of the Indenture is hereby amended by deleting the same in its entirety, and inserting the following in its place:
(4) to add to or change any of the provisions of this Indenture to provide that Bearer Securities may be registrable as to principal, to change or eliminate any restrictions on the payment of principal (or premium, if any) on Registered Securities or of principal (or premium, if any) or any interest on Bearer Securities, to permit Registered Securities to be exchanged for Bearer Securities, provided any such action shall not adversely affect the interests of the Holders of Securities of any series or any related coupons in any material respect; or
25. Section 902 of the Indenture is hereby amended as follows:
(a) By adding to the end of Section 902(1) the following: "change any obligation of the Company to pay additional amounts pursuant to Section 1010 (except as contemplated by Sections 301 or 801(1) or permitted by Section 901(1)), or"
(b) By adding to the end of Section 902(2) the following: "reduce the requirements of Section 1404 of quorum or voting, or"
(c) By adding to the end of Section 902 the following:
27. Section 1001 of the Indenture is hereby amended by adding the following to the end thereof:
Any interest due on Bearer Securities on or before Maturity, other than additional amounts, if any, payable as provided in Section 1010 in respect of principal of (or premium, if any, on) such a Security, shall be payable only upon presentation and surrender of the several coupons for such interest installments as are evidenced thereby as they severally mature.
27. Section 1002 of the Indenture is hereby amended as follows:
(a) By adding the following immediately after the first sentence of the first paragraph:
If Securities of a series are issuable as Bearer Securities, the Company
will maintain, subject to any laws or regulations applicable thereto, (A)
an office or agency in a Place of Payment for such series that is located
outside the United States where Securities of such series and the related
coupons may be presented and surrendered for payment (including payment of
any additional amounts payable on Securities of such series pursuant to
Section 1010); provided, however, that if the Securities of such series are
listed on The International Stock Exchange of the United Kingdom and
the Republic of Ireland or the Luxembourg Stock Exchange or any other stock exchange located outside the United States and such stock exchange shall so require, the Company will maintain a Paying Agent in London or Luxembourg or any other required city located outside the United States, as the case may be, so long as the Securities of such series are listed on such exchange, and (B) an office or agency in a Place of Payment for such series that is located outside the United States where any Registered Securities of such series may be surrendered for registration of transfer, where securities of that series may be surrendered for exchange and where notices and demands to or upon the Company in respect of the Securities of that series and the Indenture may be served.
(b) By adding the following to the end of the former third sentence of the first paragraph:
(c) By adding the following immediately after the first paragraph:
No payment of principal of or premium or interest on Bearer Securities shall be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States; provided, however, that, if the Securities are denominated and payable in Dollars, payment of principal of and any premium and interest (including any additional amounts payable in respect thereof pursuant to Section 1010) on any Bearer Security shall be made in Dollars at the Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of New York if (but only if) payment of the full amount of such principal, premium, interest or additional amounts at all offices outside the United States maintained for the purpose by the Company in accordance with this Indenture is illegal or effectively precluded by exchange controls or other similar restrictions.
27. The fifth paragraph of Section 1003 of the Indenture is hereby further amended as follows:
(a) By changing the words "three years" to "two years".
(b) By deleting the words "in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York" from the proviso in said fifth paragraph, and inserting the following in their place:
in an Authorized Newspaper of general circulation in the Borough of Manhattan, The City of New York, and each Place of Payment
29. The Indenture is hereby amended by adding a new Section 1010 immediately after Section 1009 as follows:
If the Securities of a series provide for the payment of additional amounts, the Company will pay to the Holder of any Security of any series or any coupon appertaining thereto additional amounts upon the terms and subject to the conditions provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of (or premium, if any) or interest on, or in respect of, any Security of any series or any related coupon or the net proceeds received on the sale or exchange or any Security of any series, such mention shall be deemed to include mention of the payment of additional amounts provided for in the terms of such Securities and this Section to the extent that, in such context, additional amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and express mention of the payment of additional amounts (if applicable) in any provisions hereof shall not be construed as excluding additional amounts in those provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of additional amounts, at least 10 days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to the Maturity, the first day on which a payment of principal (and premium, if any) is made, and at least 10 days prior to each date of payment of principal (and premium, if any) or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company will furnish the Trustee and the Company's principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of (and premium, if any) or interest on the Securities of that series shall be made to Holders of Securities of that series or the related coupons who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities or coupons and the Company will pay to the Trustee or such Paying Agent the additional amounts, if any, required by the terms of such Securities and the first paragraph of this Section. The Company covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with Actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section 1010.
30. The first paragraph of Section 1104 of the Indenture is hereby amended to delete the words "by first-class mail, postage prepaid, mailed"; to insert the following in their place: "in the manner provided in Section 106;" and to delete the words "at his address appearing in the Security Register."
31. Section 1106 of the Indenture is hereby amended as follows:
(a) By adding the following to the end of the first sentence of the first paragraph:
and the coupons for such interest appertaining to any Bearer Securities so to be redeemed, except to the extent provided below, shall be void.
(b) By adding the following immediately prior to the proviso to the second sentence of the first paragraph:
(c) By adding the following immediately following the first paragraph:
If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant coupons maturing after the Redemption Date, such Bearer Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Bearer Security shall surrender to the Trustee or any Paying Agent any such missing coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided, however, that interest represented by coupons shall be payable only upon presentation and surrender of those coupons at an office or agency located outside of the United States except as otherwise provided in Section 1002.
32. Section 1107 of the Indenture is hereby amended to add the following to the end of the sentence comprising Section 1107:
, except that if a Global Security is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the Depositary for such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed portion of the principal of the Global Security so surrendered.
33. Section 1202(1) of the Indenture is hereby amended to add the following after the parenthetical and immediately prior to the word "and":
, together in the case of any Bearer Securities of such series with all unmatured coupons appertaining thereto,
34. Section 1302(B) of the Indenture is hereby amended to add the words "and Section 1010" at the end thereof.
35. The Indenture is hereby amended to add a new Article Fourteen as follows:
ARTICLE FOURTEEN
MEETINGS OF HOLDERS
If Securities of a series are issuable in whole or in part as Bearer Securities, a meeting of Holders of Securities of such series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, notice, consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders of Securities of such series.
(a) The Trustee may at any time call a meeting of Holders of Securities of any series issuable in whole or in part as Bearer Securities for any purpose specified in Section 1401, to be held at such time and at such place in the Borough of Manhattan, The City of New York, or in London, as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 106, not less than 21 or more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 10% in principal amount of the Outstanding
Securities of any series shall have requested the Trustee to call a meeting
of the Holders of Securities of such series for any purpose specified in
Section 1401, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
made the first publication of the notice of such meeting within 21 days
after receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Company or the Holders of
Securities of such series in the amount above specified, as the case may
be, may determine the time and the place in the Borough of Manhattan, The
City of New York, or in London for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in Subsection (a)
of this Section.
To be entitled to vote at any meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more Outstanding Securities of such series, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.
The Persons entitled to vote a majority in principal amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders of Securities of such series; provided, however, that if any action is to be taken at such meeting with respect to a consent or waiver which this Indenture expressly provides may be given by the Holders of not less than 66 2/3% in principal amount of the Outstanding Securities of a series, the Persons entitled to vote 66 2/3% in
principal amount of the Outstanding Securities of such series shall constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In the absence of a quorum in any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 1402(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series that shall constitute a quorum.
Except as limited by the first proviso to Section 902, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in principal amount of the Outstanding Securities of that series; provided, however, that, except as limited by such first proviso to Section 902, any resolution with respect to any consent or waiver which this Indenture expressly provides may be given by the Holders of not less than 66 2/3% in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid only by the affirmative vote of the Holders of 66 2/3% in principal amount of the Outstanding Securities of that series; and provided further that, except as limited by such first proviso to Section 902, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series and the related coupons, whether or not present or represented at the meeting.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of such series in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 104 and the appointment of any proxy shall be proved in the manner specified in Section 104 or, in the case of Bearer Securities, by having the signature of the person executing the proxy witnessed or guaranteed by any trust company, bank or banker authorized by Section 104 to certify to holding of Bearer Securities. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 1402(b), in which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall be entitled to one vote for each $1,000 principal amount (or the equivalent in ECU,
any other composite currency or a Foreign Currency) of Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly pursuant to Section 1402 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting; and the meeting may be held as so adjourned without further notice.
The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record, at least in triplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 1402 and, if applicable, Section 1404. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter of have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.
33. The Indenture is hereby amended by adding Exhibits A, B, C and D to the end thereof, as such Exhibits are attached to this Second Supplemental Indenture.
34. All provisions of this Second Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Second Supplemental Indenture, shall be read, taken and construed as one and same instrument.
35. The Trustee accepts the trusts created by the Indenture, as supplemented by this Second Supplemental Indenture, and agrees to perform the same upon the terms and conditions in the Indenture, as supplemented by the Second Supplemental Indenture.
36. The recitals contained in the Indenture and the Securities, except the Trustee's certificate of authentication, shall be taken as statement of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of the Indenture or the Securities.
37. All amendments to the Indenture made hereby shall have effect only with respect to the Securities of any series created on or after the date hereof, and not with respect to the Securities of any series created prior to the date hereof.
38. All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Indenture.
39. This Second Supplemental Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, and their respective seals to be hereunto affixed and attested, all as of the date first above written.
THE MEAD CORPORATION
By /s/ W. A. Enoven -------------------------------- Title: Senior Vice President and Chief Financial Officer [Corporate Seal] Attest: /s/ Lorraine J. Francis ---------------------------------- Title: Assistant Secretary |
BANKERS TRUST COMPANY
By /s/ Louise A. Buckley -------------------------------- Title: Assistant Vice President [Corporate Seal] Attest: /s/ Virginia Cheng Shames ---------------------------------- Title: Assistant Vice President |
STATE OF OHIO ) ) s.s.: COUNTY OF MONTGOMERY ) |
On the 18th day of October, 1989, before me personally came W.A. Enoven, to be known, who, being duly sworn, did depose and say that he is Senior VP and Chief Financial Officer of THE MEAD CORPORATION, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
/s/ Jeffrey L. Hayman -------------------------------- JEFFREY L. HAYMAN ATTORNEY AT LAW NOTARY PUBLIC - STATE OF OHIO LIFETIME COMMISSION SECTION 147.03 R. C. |
STATE OF NEW YORK ) ) s.s.: COUNTY OF NEW YORK ) |
On the 16th day of October, 1989, before me personally came Louise A. Buckley, to be known, who, being duly sworn, did depose and say that she is Assistant Vice President of BANKERS TRUST COMPANY, one of the corporations described in and which executed the foregoing instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that she signed her name thereto by like authority.
/s/ Desiree Marshall ----------------------------------- DESIREE MARSHALL Notary Public, State of New York No. 24-4885294 Qualified in Kings County Certificate filed in New York County Commission Expires February 17, 1991 |
EXHIBIT A
[FORM OF CERTIFICATE TO BE GIVEN BY PERSON
ENTITLED TO RECEIVE BEARER SECURITY OR SECURITY
INITIALLY REPRESENTED BY TEMPORARY GLOBAL SECURITY]
[Insert title or sufficient description of Securities to be Delivered]
This is to certify that the above-captioned Securities is not being acquired by or on behalf of a United States person, or for offer to resell or for resale to a United States person, or any person inside the United States, or, if a beneficial interest in the Securities is being acquired by a United States person, that such United States person is a financial institution within the meaning of Section 1.165-12(c)(l)(v) of the United States Treasury Regulations or is acquiring through such a financial institution and that in either case the Securities are held by a financial institution that has agreed in writing to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder and that is not purchasing for offer to resell or for resale inside the United States. If this certificate is being provided by a clearing organization, it is based on similar certificates provided to it by its member organizations; provided, however, that, if the undersigned has actual knowledge that the information contained in such a certificate is false (and, absent documentary evidence that the beneficial owner of such Security is not a United States person, it will be deemed to have actual knowledge that such beneficial owner, other than a financial institution described above, is a United States person if it has a United States address for such beneficial owner), the undersigned will not deliver a Security in temporary or definitive bearer form, to the person who signed such certificate notwithstanding the delivery of such certificate to the undersigned.
As used herein, "United States" means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction, and "United States person" means any citizen or resident of the United States, any corporation, partnership or other entity created or organized in or under the laws of the United States and any estate or trust the income of which is subject to Federal income taxation regardless of its source.
We undertake to advise you by telex if the above statement as to beneficial ownership is not correct on the date of delivery of the above-captioned Securities as to all of such Securities.
We understand that this certificate is required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings.
Dated: __________________________, 19__
EXHIBIT B
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. IN
CONNECTION WITH THE EXCHANGE OF A PORTION OF
A TEMPORARY GLOBAL SECURITY]
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify with respect to $__________ principal amount of the above-captioned Securities that we have received from each of the persons appearing in our records as persons entitled to a portion of such principal amount (our "Qualified Account Holders") a certificate with respect to such portion substantially in the form attached hereto.
We further certify that as of the date hereof we have not received any notification from any of our Qualified Account Holders to the effect that the statements made by such Qualified Account Holders with respect to any portion of the part submitted herewith for exchange are no longer true and cannot be relied upon as of the date hereof.
Dated:__________ , 19__.
[To be dated no earlier than
the Exchange Date]
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
BRUSSELS OFFICE, AS
OPERATOR OF THE EURO-
CLEAR SYSTEM]
[CEDEL S.A.]
By____________________
EXHIBIT C
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. TO OBTAIN INTEREST]
CERTIFICATE
[Insert title or sufficient description of Securities]
We confirm that the interest payable on the Interest Payment Date(s) on
[Insert Date(s)] will be paid to each of the persons appearing in our records as
being entitled to interest payable on such date from whom we have received a
written certification, dated not earlier than such Interest Payment Date(s),
substantially in the form attached hereto.
We undertake that any interest received by us and not paid as provided above shall be returned to the Trustee for the above Securities immediately prior to the expiration of two years after such Interest Payment Date in order to be repaid by such Trustee to the above issuer at the end of two years after such Interest Payment Date.
Dated: ___________, 19__.
[To be dated on or after the most recent Interest Payment Date]
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
BRUSSELS OFFICE, AS
OPERATOR OF THE EURO-
CLEAR SYSTEM]
[CEDEL S.A.]
By____________________
EXHIBIT D
[FORM OF CERTIFICATE TO BE GIVEN BY
ACCOUNT HOLDERS TO OBTAIN INTEREST]
CERTIFICATE
[Insert title or sufficient description of Securities]
This is to certify that (i) as of the Interest Payment Date(s) on [Insert Date(s)], none of the above-captioned Securities held by you for our account was beneficially owned by a United States person or, if any of such Securities held by you for our account were beneficially owned by a United States person, such United States person was a financial institution as defined in Section 1.165-12(c)(1)(v) of the United States Treasury Regulations under the Internal Revenue Code of 1986, as amended or acquired such Securities through a financial institution and that such Securities were held by a financial institution that agreed to comply with Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986 and the regulations thereunder and that was not purchasing for offer to resell or for resale inside the United States (a "qualifying financial institution") and (ii) the above-captioned Securities are not being acquired by or on behalf of a United States person or for offer to resell or for resale to a United States person or any person inside the United States or, if a beneficial interest in the Securities is being acquired by or on behalf of a United States person, that such United States person is a qualifying financial institution. If the undersigned is a clearing organization, the undersigned has obtained a similar certificate from its member organizations on which this certificate is based; provided that, if the undersigned has actual knowledge that the information contained in such a certificate is false, the undersigned will not pay interest in respect of such Securities to, or credit interest in respect of such Securities to the account of, or deliver a Security in temporary or definitive bearer form to, the person who signed such certificate, notwithstanding the delivery of such certificate to the undersigned.
As used herein, "United States person" means any citizen or resident of the United States, any corporation, partnership
or other entity created or organized in or under the laws of the United States and any estate or trust the income of which is subject to United States Federal income taxation regardless of its source, and "United States" means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction.
We understand that this certificate may be required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings.
Dated:___________, 19__.
[To be dated on or after the
most recent Interest Payment Date]
[Name of Person Entitled to Receive Interest]
THE MEAD CORPORATION
TO
BANKERS TRUST COMPANY, TRUSTEE
Third Supplemental Indenture
Dated as of November 15, 1991
TO INDENTURE
Dated as of July 15, 1982
As Amended by
First Supplemental Indenture
Dated as of March 1, 1987
And As Amended by
Second Supplemental Indenture
Dated as of October 15, 1989
THIRD SUPPLEMENTAL INDENTURE, dated as of November 15, 1991, between THE MEAD CORPORATION, a corporation duly organized and existing under the laws of the State of Ohio (the "Company"), having its principal offices at Dayton, Ohio and BANKERS TRUST COMPANY, a corporation duly organized and existing under the laws of the State of New York, as Trustee (the "Trustee").
WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of July 15, 1982, a First Supplemental Indenture (the "First Supplemental Indenture"), dated as of March 1, 1987, and a Second Supplemental Indenture (the "Second Supplemental Indenture"), dated as of October 15, 1989 (as so supplemented, the "Indenture"), providing for the issuance from time to time of its unsecured debentures, notes and other evidences of indebtedness (herein and therein called the "Securities"), to be issued in one or more series as in the Indenture provided;
WHEREAS, Sections 901(5) and 901(9) of the Indenture provide, among other things, that the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into an indenture supplemental to the Indenture (1) for the purpose of changing or eliminating any provision of the Indenture, provided that such change or elimination becomes effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the
benefit of such provision and (2) for the purpose of making any other provisions with respect to matters arising under the Indenture, provided that such action does not adversely affect the interests of the Holders of Securities of any series in any material respect;
WHEREAS, the Company pursuant to the foregoing authority, proposed in and by this Third Supplemental Indenture to amend the Indenture in certain respects with respect to the Securities of any series created on or after the date hereof; and
WHEREAS, all things necessary to make this Third Supplemental Indenture a valid agreement of the Company, in accordance with its terms, have been done.
AGREEMENT
NOW, THEREFORE, the Company and the Trustee hereby agree as follows:
1. References to "The International Stock Exchange of the United Kingdom and the Republic of Ireland" in Sections 106 and 1002 are hereby amended to "The London Stock Exchange."
2. The definition of "United States" in Section 101 of the Indenture is hereby amended to read in full as follows:
"United States" means the United States of America (including the States thereof and the District of Columbia), and its possessions, which include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
3. Section 302 of the Indenture is hereby amended to read in full as follows:
Unless otherwise provided as contemplated by Section 301 with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof, except that Bearer Securities of each series, if any, shall be issuable in the denomination of $5,000.
4. The proviso to the first sentence of the third paragraph of Section 303 is hereby amended to read in full as follows:
earlier than 15 days prior to (i) any Interest Payment Date that
occurs prior to the Exchange Date (as defined in Section 304)
with respect to a temporary Global Security for such Security or
(ii) the earlier of the date on which such Security is delivered
or the date on which any temporary Global Security first becomes
exchangeable for such Securities in accordance with the terms of
such temporary Security or this Indenture.
5. The proviso to the second sentence of the fourth paragraph of Section 304 is hereby amended to read in full as follows:
6. The first sentence of the fifth paragraph of Section 304 is hereby amended in full as follows:
Unless otherwise specified in such temporary Global Security, the interest of a beneficial owner of Securities of a series in a temporary Global Security shall be exchanged for definitive Securities of the same series and of like tenor following the Exchange Date upon the receipt by Euro-clear or CEDEL S.A., as the case may be, of a certificate in the form set forth in Exhibit A to this Indenture, dated no earlier than 15 days prior to (i) any Interest Payment Date that
occurs prior to the Exchange Date or (ii) the Exchange Date, copies of which certificate shall be available from the offices of Euro-clear and CEDEL S.A., the Trustee, any Authenticating Agent appointed for such series of Securities and each Paying Agent.
7. The sixth paragraph of Section 304 is hereby amended in full as follows:
Until exchanged in full as hereinabove provided, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder, except that no interest shall be payable on a temporary Global Security on any Interest Payment Date occurring after the Exchange Date for Securities of such series. Unless otherwise specified as contemplated by Section 301, interest payable on a temporary Global Security on any Interest Payment Date prior to the Exchange Date for Securities of such series shall be payable to Euro-clear and CEDEL S.A. on such Interest Payment Date only upon delivery by Euro-clear and CEDEL S.A. to the Trustee of a certificate or certificates in the form set forth in Exhibit B to this Indenture, dated no earlier than 15 days prior to the Interest Payment Date, for credit without further interest on or after such Interest Payment Date to the respective accounts of the Persons for which Euro-clear or CEDEL S.A., as the case may be, holds such temporary Global Security on such Interest Payment Date and who have each delivered to Euro- clear and CEDEL S.A., as the case may be, a certificate in the form set forth in Exhibit A to this Indenture. Notwithstanding anything to the contrary herein contained, the certifications made pursuant to this paragraph shall satisfy the certification requirements of the preceding two paragraphs of this Section 304 and of the tenth paragraph of Section 305. The delivery of such certification by Persons for whom Euro-clear or CEDEL S.A., as the case may be, holds such temporary Global Security shall constitute irrevocable instructions by such Person to Euro-clear or CEDEL S.A. to exchange such Person's interest in the temporary Global Security for definitive Securities of the same
series and of like tenor on the Exchange Date. Any interest so received by Euro-clear and CEDEL S.A. and not paid as herein provided shall be returned to the Trustee immediately prior to the expiration of two years after such Interest Payment Date in order to be repaid to the Company in accordance with Section 1003.
8. The first proviso to the third sentence of the tenth paragraph of
Section 305 is hereby amended in full as follows:
provided, however, that no definitive Bearer Security shall be delivered in exchange for a temporary Global Security except in accordance with the delivery of a certificate required by Section 304;
9. Exhibits A, B, C and D to the Indenture are hereby deleted, and new Exhibits A and B are added to the end thereof, as such Exhibits are attached to this Third Supplemental Indenture.
10. All provisions of this Third Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture and this Third Supplemental Indenture, shall be read, taken and construed as one and same instrument.
11. The Trustee accepts the trusts created by the Indenture, as supplemented by this Third Supplemental Indenture, and agrees to perform the same upon the terms and conditions in the Indenture, as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture and this Third Supplemental Indenture.
12. The recitals contained in the Indenture and the Securities, except the Trustee's certificate of authentication, shall be taken as statement of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of the Indenture or the Securities.
13. All amendments to the Indenture made hereby shall have effect only with respect to the Securities of any series created on or after the date hereof, and not with respect to the Securities of any series created prior to the date hereof.
14. All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Indenture.
15. Except to the extent specifically provided therein, no provision of this Third Supplemental Indenture or any future supplemental indenture is intended to modify, and the parties do hereby adopt and confirm, the provisions of Section 318(c) of the Trust Indenture Act which amend and supersede provisions of the Indenture in effect prior to November 15, 1990.
16. This Third Supplemental Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed, and their respective seals to be hereunto affixed and attested all as of the date first above written.
THE MEAD CORPORATION
By /s/ W A Enouen -------------------------------- Title: Senior Vice President and Chief Financial Officer [Corporate Seal] Attest: /s/ Jeff Hayman ------------------------------- Title: Secretary and Associate General Counsel |
BANKERS TRUST COMPANY
By /s/ Remo J. Reale -------------------------------- Title: Assistant Vice President [Corporate Seal] Attest: /s/ Janine M. Shugar ------------------------------- Title: Assistant Vice President |
State of Ohio
----------------- )
County of Montgomery ) SS:
----------------- )
On the 26th day of November, 1991, before me personally came William A. Enouen, to be known, who being duly sworn, did depose and say that he is Senior VP and CFO of THE MEAD CORPORATION, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
/s/ Tina Marie Boyd --------------------------------- Notary Public f/k/a Tina Marie Earnest TINA MARIE EARNEST, Notary Public In and for the State of Ohio My Commission Expires Jan. 25, 1993 |
State of New York ----------------- ) |
County of New York ) SS:
----------------- )
On the 27th day of November, 1991, before me personally came Remo J. Reale, to be known, who being duly sworn, did depose and say that he is Assistant Vice President of BANKERS TRUST COMPANY, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
/s/ Joan Caruso --------------------------------- Notary Public |
EXHIBIT A
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE]
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (as defined in
United States Treasury Regulations Section 1.165-12(c)(1)(v)) purchasing for
their own account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise the Issuer or its agent that such financial institution will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) are owned by United States or foreign financial institutions for purposes
of resale during the restricted period (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in addition, if the owner is a
United States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)), this is to further
certify that such financial institution has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America (including the States and District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex or by electronic transmission on or prior to the date on which you intend to submit your certification relating to the above-captioned Securities held by you for our account in accordance with your Operating Procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.
This certificate excepts and does not relate to___________of such interest in the above-captioned Securities in respect of which we are not able to certify and as to which we understand an exchange for an interest in a permanent Global Security or an exchange for and delivery of definitive Securities (or, if relevant, collection of any interest) cannot be made until we do so certify.
We understand that this certificate may be required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings.
Date: , 19 ----------------------------- -- [To be dated no earlier than the 15th day prior to (i) the Exchange Date or (ii) the relevant Interest Payment Date occurring prior to the Exchange Date, as applicable] [Name of Person Making Certification] |
Name:
Title:
EXHIBIT B
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. IN CONNECTION WITH THE
EXCHANGE OF A PORTION OF A TEMPORARY
GLOBAL SECURITY OR TO OBTAIN
INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE]
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that based solely on written certifications that we have
received in writing, by tested telex or by electronic transmission from each of
the persons appearing in our records as persons entitled to a portion of the
principal amount set forth below (our "Member Organizations") substantially in
the form attached hereto, as of the date hereof, _____________ principal amount
of the above-captioned Securities (i) is owned by person(s) that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v)) purchasing for their own account or for
resale, or (b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in each case (a) or (b), each such financial institution has agreed, on its
own behalf or through its agent, that we may advise the Issuer or its agent that
such financial institution will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) is owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period
(as defined in United States Treasury Regulations Section 1.163-
5(c)(2)(i)(D)(7)), and to the further effect, that financial institutions
described in clause (iii) above (whether or not also described in clause (i) and
(ii)) have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
As used herein, "United States" means the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for exchange (or, if relevant, collection of any interest) any portion of the temporary Global Security representing the above-captioned Securities excepted in the above-referenced certificates of Member Organizations and (ii) as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, collection of any interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings.
Date: ________________________, 19__
[To be dated no earlier
than the Exchange Date
or the relevant Interest
Payment Date occurring
prior to the Exchange
Date, as applicable]
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
BRUSSELS OFFICE, as
Operator of the
Euro-clear System]
[CEDEL S.A.]
By ______________________
THE MEAD CORPORATION
TO
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
INDENTURE
Dated as of February 1, 1993
TABLE OF CONTENTS Page ---- PARTIES.................................................. 1 RECITALS OF THE COMPANY.................................. 1 ARTICLE ONE ----------- DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions:.......................... 1 Act................................... 2 Affiliate............................. 2 Appraised Value....................... 2 Attributable Debt..................... 2 Authenticating Agent.................. 2 Authorized Newspaper.................. 2 Bearer Security....................... 3 Board of Directors.................... 3 Board Resolution...................... 3 Business Day.......................... 3 CEDEL S.A............................. 3 Commission............................ 3 Company............................... 3 Company Request; Company Order........ 3 Consolidated Shareholders' Equity..... 4 Corporate Trust Office................ 4 Corporation........................... 4 Coupon................................ 4 Defaulted Interest.................... 4 Depositary............................ 4 Defaulted Currency.................... 4 Dollar; $............................. 4 ECU................................... 4 Euro-clear............................ 4 European Communities.................. 4 Event of Default...................... 4 Exchange Rate......................... 5 Exempted Indebtedness................. 5 Experts............................... 5 Foreign Currency...................... 5 Global Security....................... 5 Holder................................ 5 Indenture............................. 5 Interest.............................. 6 Interest Payment Date................. 6 Maturity.............................. 6 Officers' Certificate................. 6 ___________ NOTE: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture. |
Page ---- Opinion of Counsel......................... 6 Original Issue Discount Security........... 6 Outstanding................................ 6 Paying Agent............................... 7 Person..................................... 7 Place of Payment........................... 7 Predecessor Security....................... 8 Principal Property......................... 8 Redemption Date............................ 8 Redemption Price........................... 8 Registered Security........................ 8 Regular Record Date........................ 8 Securities................................. 8 Security Register and Security Registrar................................. 8 Special Record Date........................ 8 Stated Maturity............................ 9 Subsidiary................................. 9 Trustee.................................... 9 Trust Indenture Act........................ 9 United States.............................. 9 United States Alien........................ 9 U.S. Government Obligations................ 9 Vice President............................. 9 Section 102. Compliance Certificates and Opinions....... 10 Section 103. Form of Documents Delivered to Trustee..... 10 Section 104. Acts of Holders; Record Dates.............. 11 Section 105. Notices, Etc., to Trustee and Company...... 13 Section 106. Notice to Holders; Waiver.................. 14 Section 107. Conflict with Trust Indenture Act.......... 15 Section 108. Effect of Headings and Table of Contents......................... 15 Section 109. Successors and Assigns..................... 15 Section 110. Separability Clause........................ 15 Section 111. Benefits of Indenture...................... 15 Section 112. Governing Law.............................. 16 Section 113. Legal Holidays............................. 16 |
NOTE: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture.
Page ---- ARTICLE TWO ----------- SECURITY FORMS Section 201. Forms Generally............................................ 16 Section 202. Form of Face of Security................................... 17 Section 203. Form of Reverse of Security................................ 19 Section 204. Form of Trustee's Certificate of Authentication............ 23 ARTICLE THREE ------------- THE SECURITIES Section 301. Amount Unlimited; Issuable in Series....................... 23 Section 302. Denominations.............................................. 26 Section 303. Execution, Authentication, Delivery and Dating............. 26 Section 304. Temporary Securities....................................... 30 Section 305. Registration, Registration of Transfer and Exchange........ 33 Section 306. Mutilated, Destroyed, Lost and Stolen Securities........... 37 Section 307. Payment of Interest; Interest Rights Preserved............. 38 Section 308. Persons Deemed Owners...................................... 40 Section 309. Cancellation............................................... 41 Section 310. Computation of Interest.................................... 41 Section 311. Certification by a Person Entitled to Delivery of Bearer Security................................................. 41 Section 312. Judgments.................................................. 41 ARTICLE FOUR ------------ SATISFACTION AND DISCHARGE Section 401. Satisfaction and Discharge of Indenture.................... 42 Section 402. Application of Trust Money................................. 43 |
Page ---- ARTICLE FIVE ------------ REMEDIES Section 501. Events of Default.......................................... 44 Section 502. Acceleration of Maturity; Rescission and Annulment......... 46 Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.................................................. 47 Section 504. Trustee May File Proofs of Claim........................... 48 Section 505. Trustee May Enforce Claims Without Possession of Securities 48 Section 506. Application of Money Collected............................. 49 Section 507. Limitation on Suits........................................ 50 Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest..................................... 51 Section 509. Restoration of Rights and Remedies......................... 51 Section 510. Rights and Remedies Cumulative............................. 51 Section 511. Delay or Omission Not Waiver............................... 52 Section 512. Control by Holders......................................... 52 Section 513. Waiver of Past Defaults.................................... 53 Section 514. Undertaking for Costs...................................... 53 Section 515. Waiver of Stay or Extension Laws........................... 53 ARTICLE SIX ----------- THE TRUSTEE Section 601. Certain Duties and Responsibilities........................ 54 Section 602. Notice of Defaults......................................... 54 Section 603. Certain Rights of Trustee.................................. 54 Section 604. Not Responsible for Recitals or Issuance of Securities..... 56 Section 605. May Hold Securities........................................ 56 Section 606. Money Held in Trust........................................ 56 Section 607. Compensation and Reimbursement............................. 56 Section 608. Disqualification; Conflicting Interests.................... 57 Section 609. Corporate Trustee Required; Eligibility.................... 57 |
Page ---- Section 610. Resignation and Removal; Appointment of Successor.......... 57 Section 611. Acceptance of Appointment by Successor..................... 59 Section 612. Merger, Conversion, Consolidation or Succession to Business................................................. 60 Section 613. Preferential Collection of Claims Against Company.......... 61 Section 614. Appointment of Authenticating Agent........................ 61 ARTICLE SEVEN ------------- HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY Section 701. Company to Furnish Trustee Names and Addresses of Holders.. 63 Section 702. Preservation of Information; Communications to Holders..... 63 Section 703. Reports by Trustee......................................... 64 Section 704. Reports by Company......................................... 64 ARTICLE EIGHT ------------- CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 801. Company May Consolidate, Etc., Only on Certain Terms....... 65 Section 802. Successor Substituted...................................... 66 ARTICLE NINE ------------ SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures Without Consent of Holders......... 67 Section 902. Supplemental Indentures with Consent of Holders............ 68 Section 903. Execution of Supplemental Indentures....................... 70 Section 904. Effect of Supplemental Indentures.......................... 70 Section 905. Conformity with Trust Indenture Act........................ 70 |
Page ---- Section 906. Reference in Securities to Supplemental Indentures......... 70 ARTICLE TEN ----------- COVENANTS Section 1001. Payment of Principal, Premium and Interest................. 70 Section 1002. Maintenance of Office or Agency............................ 71 Section 1003. Money for Securities Payments to Be Held in Trust.......... 72 Section 1004. Corporate Existence........................................ 74 Section 1005. Maintenance of Properties.................................. 74 Section 1006. Limitation on Liens........................................ 74 Section 1007. Limitation on Sale and Lease-Back.......................... 76 Section 1008. Statement by Officers as to Default........................ 77 Section 1009. Waiver of Certain Covenants................................ 77 Section 1010. Payment of Additional Amounts.............................. 77 ARTICLE ELEVEN -------------- REDEMPTION OF SECURITIES Section 1101. Applicability of Article................................... 78 Section 1102. Election to Redeem; Notice to Trustee...................... 78 Section 1103. Selection by Trustee of Securities to Be Redeemed.......... 79 Section 1104. Notice of Redemption....................................... 79 Section 1105. Deposit of Redemption Price................................ 80 Section 1106. Securities Payable on Redemption Date...................... 80 Section 1107. Securities Redeemed in Part................................ 81 ARTICLE TWELVE -------------- SINKING FUNDS Section 1201. Applicability of Article................................... 82 |
Page ---- Section 1202. Satisfaction of Sinking Fund Payments with Securities...... 82 Section 1203. Redemption of Securities for Sinking Fund.................. 83 ARTICLE THIRTEEN ---------------- DEFEASANCE AND COVENANT DEFEASANCE Section 1301. Applicability of Article; Company's Option to Effect Defeasance or Covenant Defeasance........................ 83 Section 1302. Defeasance and Discharge................................... 83 Section 1303. Covenant Defeasance........................................ 84 Section 1304. Conditions to Defeasance and Covenant Defeasance........... 84 Section 1305. Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions................. 87 ARTICLE FOURTEEN ---------------- MEETINGS OF HOLDERS Section 1401. Purposes of Which Meetings May be Called................... 87 Section 1402. Call, Notice and Place of Meetings......................... 88 Section 1403. Persons Entitled to Vote at Meetings....................... 88 Section 1404. Quorum; Action............................................. 88 Section 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings................................................. 90 Section 1406. Counting Votes and Recording Action of Meetings............ 91 TESTIMONIUM............................................................... 92 SIGNATURES AND SEAL....................................................... 93 ACKNOWLEDGMENTS........................................................... 93 |
Page ---- EXHIBIT A................................................................. 94 EXHIBIT B................................................................. 96 |
THE MEAD CORPORATION
Certain Sections of this Indenture relating to Sections 310 through 318, inclusive, of the Trust Indenture Act of 1939:
Trust Indenture Act Section Indenture Section (S) 310(a)(1) 609 (a)(2) 609 (a)(3) Not Applicable (a)(4) Not Applicable (b) 608 610 (S) 311(a) 613 (b) 613 (S) 312(a) 701 702(a) (b) 702(b) (c) 702(c) (S) 313(a) 703(a) (b) 703(a) (c) 703(a) (d) 703(b) (S) 314(a) 704 (a)(4) 101 1004 (b) Not Applicable (c)(1) 102 (c)(2) 102 (c)(3) Not Applicable (d) Not Applicable (e) 102 (S) 315(a) 601 (b) 602 (c) 601 (d) 601 (e) 514 (S) 316(a) 101 (a)(1)(A) 502 512 (a)(1)(B) 513 (a)(2) Not Applicable (b) 508 (c) 104(c) (S) 317(a)(1) 503 (a)(2) 504 (b) 1003 (S) 318(a) 107 |
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
INDENTURE, dated as of February 1, 1993, between THE MEAD CORPORATION, a corporation duly organized and existing under the laws of the State of Ohio (herein called the "Company"), having its principal office at Courthouse Plaza Northeast, Dayton, Ohio 45463, and The First National Bank of Chicago, a national banking association duly organized and existing under the laws of the United States of America as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and
(4) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that Article.
"Act," when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" means any Person, other than a Subsidiary, in which the Company and/or any Subsidiary at any time owns, directly or indirectly, an aggregate of at least 50% of the voting stock.
"Appraised Value" means the fair market value as determined on the appraisal date or dates by an "expert" acceptable to the Trustee and the Company. The term "Appraisal Date" as used in this paragraph shall mean: (a) the date or dates on which the appraisals conducted during 1989 were completed, which appraisals were finalized on November 2, 1989; and (b) thereafter, such later date or dates, if any, which is five years after the last previous appraisal date under this Indenture, provided that the Company may, at its option by thirty days' written notice to the Trustee, fix any appraisal date at any date which is not less than two and one-half years nor more than five years after the last previous appraisal date under this Indenture.
"Attributable Debt" means, as to any particular lease entered into after the date hereof under which any Person is at the time liable and at any date as of which the amount thereof is to be determined, the total net amount of rent required to be paid by such Person under such lease during the remaining term thereof, discounted from the respective due dates thereof to such date at a rate equal to the weighted average of the interest rates borne by the Securities. The net amount of rent required to be paid under any such lease for any such period shall be the aggregate amount of the rent payable by the lessee with respect to such period after excluding amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water and utility rates and similar charges. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.
"Authenticating Agent" means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper in an official language of the country of publication or in the English language, in either case customarily published on each Business Day, whether
or not published on Saturdays, Sundays or holidays, and of general circulation in the place in connection with which the term is used or in the financial community of such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form of bearer securities established pursuant to Section 201 that is payable to bearer.
"Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment or any other particular location referred to in the Indenture or in the Securities, means, except as may otherwise be provided in the form of Securities of any particular series pursuant to the provisions of this Indenture, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law to close.
"CEDEL S.A." means Centrale de Livraison de Valeurs Mobilieres S.A.
"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Shareholders' Equity" means the sum of the consolidated shareholders' equity of the Company and its consolidated subsidiaries, as shown on the most recent audited consolidated balance sheet of the Company plus 75% of the excess of the "Appraised Value" (as herein defined) of all timberlands owned by the Company and its Subsidiaries over the book value thereof.
"Corporate Trust Office" means the principal office of the Trustee in Chicago, Illinois at which at any particular time its corporate trust business shall be administered.
"Corporation" includes corporations, associations, companies, joint-stock companies or business trusts.
The term "coupon" means any interest coupon appertaining to a Bearer Security.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depositary by the Company pursuant to Section 301 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, "Depositary" as used with respect to the Securities of any such series shall mean the Depositary with respect to the Securities of that series.
"Designated Currency" has the meaning specified in Section 312.
"Dollar" or "$" means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to time by the Council of the European Communities.
"Euro-clear" means Morgan Guaranty Trust Company of New York, Brussels office, or its successor as operator of the Euro-clear System.
"European Communities" means the European Economic Community, the European Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
"Exchange Rate" means the exchange rate set forth in the Officers' Certificate or supplemental indenture establishing a series of Securities pursuant to Section 301.
"Exempted Indebtedness" means, as of any particular time, the sum of (i) the aggregate principal amount of all then outstanding indebtedness for money borrowed of the Company and Subsidiaries issued, assumed or guaranteed directly or indirectly after the date of this Indenture and secured by any mortgage, security interest, pledge, lien or other encumbrance other than those permitted by paragraph (a) of Section 1006 and (ii) all Attributable Debt in respect of Sale and Lease-Back Transactions (as defined in Section 1007) incurred after the date of this Indenture and at such time outstanding other than that permitted pursuant to paragraph (a) of Section 1007.
"Experts," except as otherwise herein specifically provided, the engineer, appraiser, accountant, counsel or other person giving any opinion, certificate, audit or report provided for herein shall be selected by the Board of Directors and shall not be disqualified by reason of his regular employment or retention by the Company, but in all cases such selection of the Board of Directors must be acceptable to the Trustee. In any case, more than one person of the designated class may join in any such opinion, certificate, audit or report, each certifying to a party of the required facts, opinions or conclusions. Each certificate or opinion with respect to compliance with a condition or covenant provided for herein shall conform to the requirements of Section 102.
"Foreign Currency" means a currency issued by the government of any country other than the United States of America.
"Global Security" means a Registered or Bearer Security evidencing all or
part of a series of Securities, issued to the Depositary for such series or its
nominee in accordance with Section 303, and bearing the legend prescribed in
Section 303.
"Holder," with respect to a Registered Security, means a Person in whose name such Registered Security is registered in the Security Register and, with respect to a Bearer Security or a coupon, means the bearer thereof.
"Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument, and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term "Indenture" shall also include the terms of particular series of Securities established as contemplated by Section 301.
"Interest," when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, the Controller or an Assistant Controller, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.
(i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(iii) Securities for whose payment or redemption money or U.S. Government Obligations as contemplated by Section 1304 in the necessary amount have been theretofore deposited with the Trustee (or another trustee satisfying the requirements of Section 609) in trust for the Holders of such Securities in accordance with Section 1305; and
(iv) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;
"Paying Agent" means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any series payable in Dollars, means the Corporate Trust Office of the Trustee, when used with respect to the Securities of any series payable in a Foreign Currency, means the place or places
where such Foreign Currency is the legal tender, and, when used with respect to the Securities of any series, means such other place or places, if any, where the principal of (and premium, if any) and any interest on the Securities of that series are payable as specified as contemplated by Section 301, in all cases subject to the provisions of Section 1002.
"Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means (i) any paperboard, paper or pulp mill or any paper converting plant or foundry or any other manufacturing plant or facility located within the United States of America or Canada of the Company or any Subsidiary except any such plant or facility which the Board of Directors by resolution declares is not of material importance to the total business conducted by the Company and its Subsidiaries as an entirety and (ii) any timber or timberlands of the Company or any Subsidiary.
"Redemption Date," when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" means any Security in the form of registered securities established pursuant to Section 201 that is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.
"Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. Where appropriate in the context of this Indenture, the term "Securities" includes any coupon appertaining to any Bearer Securities.
"Security Register" and "Security Registrar" have the respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
"Subsidiary" means any corporation at least a majority of the outstanding securities of which having ordinary voting power to elect a majority of the board of directors of such corporation (whether or not any other class of securities has or might have voting power by reason of the happening of a contingency) is at the time owned or controlled directly or indirectly by the Company, or by one of more Subsidiaries, or by the Company and one or more Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.
"United States" means the United States of America (including the States thereof and the District of Columbia), and its possessions, which include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
"United States Alien" means any Person who, for United States Federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States Federal income tax purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" has the meaning specified in Section 1304.
"Vice President," when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president."
Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. If Securities of a series
are issuable in whole or part as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may, alternatively, be embodied
in and evidenced by the record of Holders of Securities voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities duly called and held in accordance with the provisions of
Article Fourteen, or a combination of such instruments and any such record. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 1406.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the Security Register.
(d) The principal amount and serial numbers of Bearer Securities held by any Person, and the date of holding the same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary, wherever situated, if such certificate shall be deemed by the Trustee to be satisfactory, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Bearer Securities in the amount and with the serial numbers therein described; or such facts may be proved by the certificate or affidavit of the Person holding such Bearer Securities, if such certificate or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the Company may assume that such ownership of any Bearer Security continues until (1) another certificate or affidavit bearing a later date issued in respect of the same Bearer Securities is produced, or (2) such Bearer Security is produced to the Trustee by some other Person, or (3) such Bearer Security is surrendered in exchange for a Registered Security, or (4) such Bearer Security is no longer outstanding.
(e) The fact and date of execution of any such instrument or writing, the authority of the Person executing the same and the principal amount and serial numbers of Bearer Securities held by the Person so executing such instrument or writing and the date of holding the same may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section.
(f) If the Company shall solicit from the Holders of Securities of any series any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by Board Resolution, fix in advance a record date for the determination of Holders of Registered Securities entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. Any such record date shall be fixed at the Company's discretion. If such a record date is fixed, such request, demand, authorization, direction, notice, consent and waiver or other Act may be sought or given before or after the record date, but only the Holders of Registered Securities of record at the close of business on such record date shall be deemed to be Holders of Registered Securities for the purpose of determining whether Holders of the requisite proportion of Securities of such series Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that purpose the Registered Securities of such series outstanding shall be computed as of such record date.
(g) For purposes of determining the principal amount of Outstanding
Securities of any series the Holders of which are required, requested or
permitted to give any request, demand, authorization, direction, notice,
consent, waiver or take any other Act under this Indenture and for purposes of
determining whether a quorum is present at a meeting of Holders of Securities
(i) each Original Issue Discount Security shall be deemed to have the principal
amount determined by the Trustee that would be due and payable upon acceleration
of the Maturity thereof pursuant to Section 502 and the terms of such Original
Issue Discount Security as of the date such Act is delivered to the Trustee and,
where it is hereby expressly required, the Company and (ii) each Security
denominated in a Foreign Currency or composite currency shall be deemed to have
the principal amount determined by the exchange rate agent specified pursuant to
Section 301 by converting the principal amount of such Security in the currency
in which such Security is denominated into Dollars at the Exchange Rate as of
the date such Act is delivered to the Trustee and, where it is hereby expressly
required, to the Company (or, if there is no such rate on such date, such rate
as determined by such exchange rate agent).
(h) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or
at any other address previously furnished in writing to the Trustee by the Company.
Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event, (1) such notice shall be sufficiently given to Holders of Registered Securities if in writing and mailed, first-class postage prepaid, to each Holder of a Registered Security affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice; and (2) such notice shall be sufficiently given to Holders of Bearer Securities if published in an Authorized Newspaper in The City of New York and, if the Securities of such series are then listed on the London Stock Exchange and such stock exchange shall so require, in London and, if the Securities of such series are then listed on the Luxembourg Stock Exchange and such stock exchange shall so require, in Luxembourg and, if the Securities of such series are then listed on any other stock exchange outside the United States and such stock exchange shall so require, in any other required city outside the United States or, if not practicable, in Europe on a Business Day at least twice, the first such publication to be not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee, including publication, if necessary, shall constitute a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearer Securities as provided above, then such notification to Holders of Bearer Securities as shall be given with the approval of the Trustee, including publication
in any newspapers, shall constitute sufficient notice to such Holders for every purpose hereunder. Neither failure to give notice by publication to Holders of Bearer Securities as provided above, nor any defect in any notice so published, shall affect the sufficiency of any notice so mailed to Holders of Registered Securities as provided above.
Any request, demand, authorization, direction, notice, consent, election, waiver or other Act required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded as the case may be.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.
ARTICLE TWO
Security Forms
The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in substantially the form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
THE MEAD CORPORATION
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
Dated:
THE MEAD CORPORATION
By _________________
Attest:
This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of February , 1993 (herein called the "Indenture"), between the Company and The First National Bank of Chicago, as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof[, limited in aggregate principal amount to $....... ].
amount): If redeemed [on or before ............, ___%, and if redeemed] during the 12-month period beginning............. of the years indicated, Redemption Redemption Year Price Year Price ---- ----- ---- ----- |
Record Dates referred to on the face hereof, all as provided in the Indenture.]
Redemption Price For Redemption Redemption Price For Through Operation Redemption Otherwise of the Than Through Operation Year Sinking Fund of the Sinking Fund ---- ----------------- ---------------------- |
and thereafter at a Redemption Price equal to ......% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to ..........., redeem any Securities of this series as contemplated by [Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than .......% per annum.]
[The sinking fund for this series provides for the redemption on ....... in
each year beginning with the year ....... and ending with the year ....... of
[not less than $ ....... ("mandatory sinking fund") and not more than ("optional
sinking fund")] $ ....... aggregate principal amount of Securities of this
series. Securities of this series acquired or redeemed by the Company otherwise
than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made [in
the inverse order in which they become due].]
[The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Securities of this series and (b) certain restrictive covenants and other provisions, in each case upon compliance by the Company with certain conditions set forth therein, which provisions apply to the Securities of this series.]
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of 66-2/3% in principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without coupons in denominations of $..... and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
As Trustee
ARTICLE THREE
The Securities
The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided, in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);
(3) the date or dates on which the principal of the Securities of the series is payable;
(4) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any interest payable on any Interest Payment Date;
(5) the place or places where the principal of (and premium, if any) and interest on Securities of the series shall be payable;
(6) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company;
(7) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(8) the denominations in which Registered Securities of the series, if any, shall be issuable, if other than denominations of $1,000 and any integral multiple thereof, and the denominations in which Bearer Securities of the series, if any, shall be issuable if other than the denomination of $5,000;
(9) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;
(10) the application, if any, of either or both of Section 1302 and
Section 1303 to the Securities of the series;
(11) whether Bearer Securities of the series are to be issuable and, if so, whether Registered Securities of the series are also to be issuable;
(12) if Bearer Securities of the series are to be issuable, (x) whether interest in respect of any portion of a temporary Security in global form (representing all
of the Outstanding Bearer Securities of the series) payable in respect of any Interest Payment Date prior to the exchange of such temporary Security for definitive Securities of the series shall be paid to any clearing organization with respect to the portion of such temporary Security held for its account and, in such event, the terms and conditions (including any certification requirements) upon which any such interest payment received by a clearing organization will be credited to the Persons entitled to interest payable on such Interest Payment Date, and (y) the terms upon which interests in such temporary Security in global form may be exchanged for interests in a permanent Global Security or for definitive Securities of the series and the terms upon which interests in a permanent Global Security, if any, may be exchanged for definitive Securities of the series;
(13) whether the Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depositary for such Global Security or Securities;
(14) if other than Dollars, the currency of denomination of the Securities of any series, which may be in Dollars, any Foreign Currency or any composite currency, including but not limited to the ECU, and, if such currency of denomination is a composite currency other than the ECU, the agency or organization, if any, responsible for overseeing such composite currency;
(15) if other than Dollars, the currency or currencies in which
payment of the principal of (and premium, if any) and interest on the
Securities of the series will be made, and the currency or currencies, if
any, in which payment of the principal of (and premium, if any) or the
interest on Registered Securities of the series, at the election of each of
the Holders thereof, may also be payable, and the periods within which and
the terms and conditions upon which such election is to be made, the manner
in which the exchange rate with respect to such payment shall be determined
and the agent appointed by the Company in connection with the determination
of the exchange rate, and whether Section 312 will be applicable to
Securities of the Series, and the manner of determining the equivalent
thereof in Dollars for purposes of the definition of "Outstanding" in
Section 101;
(16) if the amount of payments of principal of (and premium, if any) or interest on the Securities of
the series may be determined with reference to an index, the manner in which such amounts shall be determined;
(17) whether and under what conditions additional amounts shall be
payable to Holders of Securities pursuant to or in a manner different from
Section 1010; and
(18) any other terms of the series or covenants for the benefit thereof (which terms or covenants shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 901(5)).
All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officers' Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series.
Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be payable, with different Redemption Dates and may be denominated in different currencies or payable in different currencies.
Unless otherwise provided as contemplated by Section 301 with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof, except that Bearer Securities of each series, if any, shall be issuable in the denomination of $5,000.
The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile. Coupons shall bear the facsimile signature of the Treasurer or any Assistant Treasurer of the Company.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
authorizing and delivering the first Securities of any series (and upon
reasonable request of the Trustee thereafter), the Company shall deliver to the
Trustee (i) the certificates called for under Sections 201 and 301 hereof and
(ii) an Opinion of Counsel described in the next sentence. If the form or terms
of the Securities of the series have been established in or pursuant to one or
more Board Resolutions as permitted by Sections 201 and 301, in authenticating
such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and
(c) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.
If the Company shall establish pursuant to Section 301 that the Securities of a series are to be issued in whole or in part in the form of one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance with this Section and the Company Order with respect to such series, authenticate and deliver one or more Global Securities in temporary or permanent form that (i) shall represent and shall be denominated in an amount equal to the aggregate principal
amount of Outstanding Securities of such series to be represented by one or more Global Securities; (ii) shall be registered, if in registered form, in the name of the Depositary for such Global Security or Securities or the nominee of such Depositary; (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions; and (iv) shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for Securities in definitive form in accordance with the provisions of the Indenture and the terms of the Securities, this Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary."
Each Depositary designated pursuant to Section 301 for a Global Security in registered form must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Securities Exchange Act of 1934 and any other applicable statute or regulation.
Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security shall be dated as of the date specified as contemplated by
Section 301.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Except as permitted by
Section 306 or 307, the Trustee shall not authenticate and deliver any Bearer
Security unless all appurtenant coupons for interest then matured have been
detached and cancelled. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by
the Company, and the Company shall deliver such Security to the Trustee for can-
cellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, in registered form or, if authorized, in bearer form with one or more coupons or without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. In the case of any series issuable as Bearer Securities, such temporary Securities may be in global form and shall be delivered only in compliance with the applicable conditions set forth in Section 303.
If temporary Securities of any series are issued in global form, any such temporary Global Security shall, unless otherwise provided therein, be delivered to the London office of a depositary or common depositary (the "Common Depositary"), for the benefit of Euro-clear and CEDEL S.A. for credit to the
respective accounts of the beneficial owners of such Securities (or to such other accounts as they may direct).
Unless otherwise specified in such temporary Global Security, the interest of a beneficial owner of Securities of a series in a temporary Global Security shall be exchanged for definitive Securities of the same series and of like tenor following the Exchange Date upon the receipt by Euro-clear or CEDEL S.A., as the case may be, of a certificate in the form set forth in Exhibit A to this Indenture, dated no earlier than 15 days prior to (i) any Interest Payment Date that occurs prior to the Exchange Date or (ii) the Exchange Date, copies of
which certificate shall be available from the offices of Euro-clear and CEDEL S.A., the Trustee, any Authenticating Agent appointed for such series of Securities and each Paying Agent. Unless otherwise specified in such temporary Global Security, any such exchange shall be made free of charge to the beneficial owners of such temporary Global Security, except that a Person receiving definitive Securities must bear the cost of insurance, postage, transportation and the like in the event that such Person does not take delivery of such definitive Securities in person at the offices of Euro-clear or CEDEL S.A. Definitive Securities to be delivered in exchange for any portion of a temporary Global Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that no interest shall be payable
on a temporary Global Security on any Interest Payment Date occurring after the
Exchange Date for Securities of such series. Unless otherwise specified as
contemplated by Section 301, interest payable on a temporary Global Security on
any Interest Payment Date prior to the Exchange Date for Securities of such
series shall be payable to Euro-clear and CEDEL S.A. on such Interest Payment
Date only upon delivery by Euro-clear and CEDEL S.A. to the Trustee of a
certificate or certificates in the form set forth in Exhibit B to this
Indenture, dated no earlier than 15 days prior to the Interest Payment Date, for
credit without further interest on or after such Interest Payment Date to the
respective accounts of the Persons for which Euro-clear or CEDEL S.A., as the
case may be, holds such temporary Global Security on such Interest Payment Date
and who have each delivered to Euro-clear and CEDEL S.A., as the case may be, a
certificate in the form set forth in Exhibit A to this Indenture.
Notwithstanding anything to the contrary herein contained, the certifications
made pursuant to this paragraph shall satisfy the certification requirements of
the preceding two paragraphs of this Section 304 and of the tenth paragraph of
Section 305. The delivery of such certification by Persons for whom Euro-clear
or CEDEL S.A., as the case may be, holds such temporary Global Security shall
constitute irrevocable instructions by such Person to Euro-clear or CEDEL S.A.
to exchange such Person's interest in the temporary Global Security for
definitive Securities of the same series and of like tenor on the Exchange Date.
Any interest so received by Euro-clear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee immediately prior to the expiration of
two years after such Interest Payment Date in order to be repaid to the Company
in accordance with Section 1003.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security of any series at the office or agency of the Company maintained for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Securities of the same series of any authorized denomination or denominations, of like tenor and aggregate principal amount.
Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for Securities in definitive form, a Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by a Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.
At the option of the Holder, Registered Securities of any series (except a Global Security) may be exchanged for other Registered Securities of the same series of any authorized denomination or denominations, of a like aggregate principal amount, upon surrender of the Registered Securities to be exchanged at such office or agency. Bearer Securities may not be delivered by the Trustee in exchange for Registered Securities.
At the option of the Holder, except as otherwise specified as contemplated by Section 301 with respect to a Global Security issued in bearer form, Bearer Securities of any series may be exchanged for Registered Securities (if the Securities of such series are issuable as Registered Securities) or Bearer Securities (if Bearer Securities of such series are issuable in more than one denomination) of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Bearer
If at any time the Depositary for the Securities of a series notifies the Company that it is unwilling or unable to continue as Depositary for the Securities of such series or if at any time the Depositary for the Securities of such series shall no longer be eligible under Section 303, the Company shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for the Securities of such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company's election pursuant to Section 301(13) shall no longer be effective with respect to the Securities of such series and the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive form in an aggregate principal amount
equal to the principal amount of the Global Security of Securities representing such series in exchange for such Global Security or Securities.
The Company may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more Global Security or Securities shall no longer be represented by such Global Security or Securities. In such event the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive form and in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such series in exchange for such Global Security or Securities.
If (a) there shall have occurred and be continuing an Event of Default or an event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default with respect to a series of Securities issued in the form of one or more Global Securities, or (b) if specified by the Company pursuant to Section 301 with respect to a series of Securities, the Depositary for such series of Securities may surrender a Global Security for such series of Securities in exchange in whole or in part for Securities of such series in definitive form, then the Company shall execute, and the Trustee shall authenticate and delivery, without service charge:
(i) to each Person specified by such Depositary a new Security or Securities of the same series, of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities delivered to Holders thereof.
In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Securities
(a) in definitive registered form in authorized denominations, if the Securities
of such series are issuable as Registered Securities, (b) in definitive bearer
form in authorized denominations, with coupons attached, if the Securities of
such series are issuable as Bearer Securities or (c) as either Registered or
Bearer Securities, if the Securities of such series are issuable in either form;
provided, however, that no definitive Bearer Security shall be delivered in
exchange for a temporary Global
Security unless the Company or its agent shall have received from the person entitled to receive the definitive Bearer Security a certificate substantially in the form set forth in Exhibit A hereto in accordance with Section 303; and provided further that delivery of a Bearer Security shall occur only outside the United States; and provided further that no definitive Bearer Security will be issued if the Company has reason to know that such certificate is false.
Upon the exchange of a Global Security for Securities in definitive form,
such Global Security shall be cancelled by the Trustee. Registered Securities
issued in exchange for a Global Security pursuant to this Section shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
Bearer Securities issued in exchange for a Global Security pursuant to this
Section to the persons, and in such authorized denominations, as the Depositary
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee; provided, however, that
no definitive Bearer Security shall be delivered in exchange for a temporary
Global Security except in accordance with the delivery of a certificate required
by Section 304; and provided further that delivery of a Bearer Security shall
occur only outside the United States; and provided further that no definitive
Bearer Security will be issued if the Company has reason to know that such
certificate is false.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, (i) to issue, register the transfer of or exchange Securities of any series or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, or (iii) to exchange any Bearer Security so selected for redemption except that such a Bearer Security may be exchanged for a Registered Security of that series (if the Securities of such series are issuable as Registered Securities), provided that such Registered Security shall be simultaneously surrendered for redemption with written instruction for payment consistent with the provisions of this Indenture.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Interest on any Registered Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. In case a Bearer Security of any series is surrendered in exchange for a Registered Security of such series after the close of business (at an office or agency in a Place of Payment for such series) on any Regular Record Date and before the opening of business (at such office or agency) on the next succeeding Interest Payment Date, such Bearer Security shall be surrendered without the coupon relating to such Interest Payment Date and interest will not be payable on such Interest Payment Date in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture.
Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Registered Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Registered Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Registered Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). In case a Bearer Security of any series is surrendered at the office or agency in a Place of Payment for such series in exchange for a Registered Security of such series after the close of business at such office or agency on any Special Record Date and before the opening of business at such office or agency on the related proposed date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the coupon relating to such proposed date of payment and Defaulted Interest will not be payable on such proposed date of payment in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
Prior to due presentment of a Registered Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall pass by delivery. The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any Bearer Security and the bearer of any coupon as the absolute owner of such Bearer Security or coupon for the purpose of receiving payment thereof or on account thereof and for all other purposes whatsoever, whether or not such Bearer Security or coupon be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and holders of beneficial interests in any Global Security, the operation of customary practices governing the exercise of the rights of the Depositary as Holder of such Global Security. None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order.
Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year of twelve 30-day months.
Whenever any provision of this Indenture or a Security contemplates that certification be given by a Person entitled to delivery of a Bearer Security, such certification shall be provided substantially in the form of Exhibit A hereto, with only such changes as shall be approved by the Company.
discharged only to the extent of the amount in the Designated Currency that the Holder receiving such payment may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and cost of exchange) in the country of issue of the Designated Currency in the case of Foreign Currency or Dollars or in the international banking community in the case of a composite currency on the Business Day immediately following the day on which such Holder receives such payment; (c) if the amount in the Designated Currency that may be so purchased for any reason falls short of the amount originally due, the Company shall pay such additional amounts as may be necessary to compensate for such shortfall; and (d) any obligation of the Company not discharged by such payment shall be due as a separate and independent obligation and, until discharged as provided herein, shall continue in full force and effect.
ARTICLE FOUR
Satisfaction and Discharge
This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for and any right to receive additional amounts as provided in Section 1010), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306, (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003, (iii) coupons
appertaining to Bearer Securities surrendered in exchange for Registered
Securities and maturing after such exchange, surrender of which is not
required or has been waived as provided in Section 305, and (iv) coupons
appertaining to Bearer Securities called for redemption and maturing after
the relevant Redemption Date, surrender of which has been waived as
provided in Section 1106) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
Subject to provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the extent required by law.
ARTICLE FIVE
Remedies
"Event of Default," wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or
(5) a default by the Company in the payment of any indebtedness for borrowed money (including a default with respect to Securities of any series other than that series), whether such indebtedness now exists or shall hereafter be created, whether at maturity, by call for
(6) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of that series.
At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
(1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
FIRST: To the payment of all amounts due the Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively. Except to the extent otherwise provided in Section 312 if such Section is specified as applicable to Securities of a particular series, the Holders of each series of Securities denominated in ECU, any other composite currency or a Foreign Currency and any matured coupons relating thereto shall be entitled to receive a ratable portion of the amount determined by the exchange rate agent specified pursuant to Section 301 by converting the principal amount Outstanding of such series of Securities and matured but unpaid interest on such series of Securities in the currency in which such series of Securities is denominated into Dollars at the Exchange Rate as of the date of declaration of acceleration of the Maturity of the Securities (or, if there is no such rate on such date, such rate as determined by such exchange rate agent).
Upon receipt by the Trustee of any declaration of acceleration, or rescission and annulment thereof, with respect to Securities of a series all or part of which is represented by a Global Security, the Trustee shall establish a record date for determining Holders of Outstanding Securities of such
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
(1) in the payment of the principal of or any premium or interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it hereunder.
(1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.
(b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all securities, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to
the Securities of any Series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any Series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.
(b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) and (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.
cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607.
If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
As Trustee
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
(a) semi-annually, not later than January 15 and July 15 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of the preceding January 1 or July 1, as the case may be, and
(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;
The Trustee shall preserve for at least two years the names and addresses of Holders of Bearer Securities filed with the Trustee pursuant to Section 703(b).
The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.
(a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) Reports pursuant to this Section shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names and addresses of such Holders appear in the Security Register;
(2) to such Holders of Bearer Securities as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose; and
(3) except in the case of reports pursuant to Subsection (b) of this Section, to each Holder of a Security whose name and address is preserved at the time by the Trustee, as provided in Section 702(a).
(c) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange.
The Company shall file with the Trustee and the Commission, and transmit to Holders, such information,
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
The Company shall not, and will not permit any Subsidiary to, consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company or any Subsidiary or convey, transfer or lease its properties and assets substantially as an entirety to the Company or any Subsidiary, unless:
(1) in case the Company shall consolidate with or merge into another corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities (including all additional amounts, if any, payable pursuant to Section 1010) and the performance of every covenant of this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or a Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, any Principal Property of the Company or of any Subsidiary, or any indebtedness of or equity securities of any Subsidiary or Affiliate (but not including any such indebtedness and equity securities or any other property not owned by the Company or a Subsidiary immediately prior to any such consolidation, merger, conveyance, transfer or lease) would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by this Indenture, the Company or such successor corporation or Person, as the case may be, shall take such steps as shall be necessary effectively to secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transactions have been complied with.
Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to provide that Bearer Securities may be registrable as to principal, to change or eliminate any restrictions on the payment of principal (or premium, if any) on Registered Securities or of principal (or premium, if any) or any interest on Bearer Securities, to permit Registered Securities to be exchanged for Bearer Securities, provided any such action shall not adversely affect the interests of the Holders of Securities of any series or any related coupons in any material respect; or
(6) to secure the Securities pursuant to the requirements of Section 1006 or otherwise; or
(7) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); or
(1) change the Stated Maturity of the principal of, or any instalment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or change any obligation of
the Company to pay additional amounts pursuant to Section 1010 (except as contemplated by Sections 301 or 801(1) or permitted by Section 901(1)), or
(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or reduce the requirements of Section 1404 of quorum or voting, or
A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.
Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
Covenants
The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture. Any interest due on Bearer Securities on or before Maturity, other than additional amounts, if any, payable as provided in Section 1010 in respect of principal of (or premium, if any, on) such a Security, shall be payable only upon presentation and surrender of the several coupons for such interest installments as are evidenced thereby as they severally mature.
Bearer Securities of that series pursuant to Section 1010) at the place specified for the purpose pursuant to Section 301 or, if no such place is specified, at the main office of the Trustee in London.
No payment of principal of or premium or interest on Bearer Securities shall be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States; provided, however, that, if the Securities are denominated and payable in Dollars, payment of principal of and any premium and interest (including any additional amounts payable in respect thereof pursuant to Section 1010) on any Bearer Security shall be made in Dollars at the Corporate Trust Office of the Trustee in Chicago, Illinois if (but only if) payment of the full amount of such principal, premium, interest or additional amounts at all offices outside the United States maintained for the purpose by the Company in accordance with this Indenture is illegal or effectively precluded by exchange controls or other similar restrictions.
Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, and upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
unclaimed balance of such money then remaining will be repaid to the Company.
Debt; provided, however, that the foregoing restriction shall not apply to
(1) mortgages on any property acquired, constructed or improved by the Company or any Subsidiary after the date of this Indenture which are created or incurred contemporaneously with or within one hundred twenty days after such acquisition, construction or improvement to secure or provide for the payment of any part of the purchase price of such property or the cost of such construction or improvement (the date of such construction or improvement being, for the purpose of this clause (1), deemed to be the date of completion of such construction or improvement); provided that any such mortgage shall not apply to any other property of the Company or any Subsidiary except, in the case of any construction or improvement, theretofore unimproved real property on which the property so constructed, or the improvement, is located;
(2) mortgages on any property acquired from a corporation which is merged with or into the Company or a Subsidiary or mortgages outstanding on property at the time it is acquired by the Company or a Subsidiary or mortgages outstanding on property of a corporation at the time it becomes a Subsidiary;
(3) mortgages to secure Debt of a Subsidiary to the Company or to another Subsidiary;
(4) mortgages or other restrictions relating to equity securities of any Affiliate under any agreement or arrangement between the Company or any Subsidiary and such Affiliate (or the other stockholder or stockholders of such Affiliate) providing for the operations, financing or purchase of products of such Affiliate or under any agreement among any such parties imposing restrictions on the disposition of or granting options to purchase the equity securities of such Affiliate;
(5) mortgages upon property or assets of the Company or any Subsidiary in favor of any governmental agency or authority or guarantees given for the purpose of financing, through industrial revenue bonds or notes the interest on which is exempt from federal income taxation under Section 103 of the Internal Revenue Code of 1986, as amended, the construction, acquisition or purchase of industrial plants, machinery, equipment or other property or facilities; and
(6) any extension, renewal or replacement (or successive extensions, renewals or replacements), in
whole or in part, of any mortgage referred to in the foregoing clauses (1) to (5), inclusive; provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement shall be limited to all or a part of the property which secured the mortgage so extended, renewed or replaced (plus improvements on such property).
(b) Notwithstanding the provisions of paragraph (a) of this Section 1006, the Company or any Subsidiary may, without equally and ratably securing the Securities, create or assume mortgages which would otherwise be subject to the foregoing restrictions if, at the time of such creation or assumption, and after giving effect thereto, Exempted Indebtedness does not exceed 5% of Consolidated Shareholders' Equity.
(a) The Company will not, nor will it permit any Subsidiary to, enter into any arrangement with any person providing for the leasing to the Company or Subsidiary of any Principal Property (except for temporary leases for a term of not more than three years), which property has been owned more than one hundred twenty days by the Company or such Subsidiary and has been or is to be sold or transferred by the Company or such Subsidiary to such person (herein referred to as a "Sale and Lease-Back Transaction"), unless either (1) the Company or such Subsidiary would be entitled to incur debt secured by a mortgage on the property to be leased without equally and ratably securing the Securities pursuant to clause (a) or (b) of Section 1006 or (2) the Company shall, and in any such case the Company covenants that it will, apply an amount equal to the fair value (as determined by the Board of Directors) of the property so leased to the retirement, within one hundred twenty days of the effective date of any such Sale and Lease-Back Transaction, of Securities (in the manner, subject to the restrictions and at the redemption prices then applicable to redemption of Securities at the option of the Company) or other indebtedness of the Company with a maturity in excess of one year from the date of such Sale and Lease-Back Transaction and which ranks on a parity with the Securities.
(b) Notwithstanding the provisions of paragraph (a) of this Section 1007, the Company or any Subsidiary may enter into Sale and Lease-Back Transactions which would otherwise be prohibited by the foregoing restrictions if, at the time such transactions are entered into, and after giving effect thereto, Exempted Indebtedness does not exceed 5% of Consolidated Shareholders' Equity.
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of Sections 1004 to 1007, inclusive, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.
The Company may omit in any particular instance to comply with term, provision or condition set forth in Sections 1004 to 1007, inclusive, with respect to the Securities of any series if before the time for such compliance the Holders of at least 66 2/3% in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.
If the Securities of a series provide for the payment of additional amounts, the Company will pay to the Holder of any Security of any series or any coupon appertaining thereto additional amounts upon the terms and subject to the conditions provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of (or premium, if any) or interest on, or in respect of, any Security of any series or any related coupon or the net proceeds received on the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of additional amounts provided for in the terms of such Securities and this Section to the extent that, in such context, additional amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and express mention of the payment of additional amounts (if applicable) in any provisions hereof shall not be construed as excluding additional amounts in those provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of additional amounts, at least 10 days prior to the first Interest Payment Date with respect to that series of Securities
(or if the Securities of that series will not bear interest prior to the Maturity, the first day on which a payment of principal (and premium, if any) is made), and at least 10 days prior to each date of payment of principal (and premium, if any) or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company will furnish the Trustee and the Company's principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of (and premium, if any) or interest on the Securities of that series shall be made to Holders of Securities of that series or the related coupons who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities or coupons and the Company will pay to the Trustee or such Paying Agent the additional amounts, if any, required by the terms of such Securities and the first paragraph of this Section. The Company covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with Actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section 1010.
ARTICLE ELEVEN
Redemption of Securities
Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of
the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction.
If less than all the Securities of any series are to be redeemed (unless all of the Securities of such series and of a specified tenor are to be redeemed), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series. If less than all of the Securities of such series and of a specified tenor are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.
Notice of redemption shall be given in the manner provided in Section 106, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company.
Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.
If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant coupons maturing after the Redemption Date, such Bearer Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Bearer Security shall surrender to the Trustee or any Paying Agent any such missing coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided, however, that interest represented by coupons shall be payable only upon presentation and surrender of those coupons at an office or agency located outside of the United States except as otherwise provided in Section 1002.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered, except that if a Global Security is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the Depositary for such Global Security, without service charge, a new Global Security in a
denomination equal to and in exchange for the unredeemed portion of the principal of the Global Security so surrendered.
ARTICLE TWELVE
Sinking Funds
The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment." If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.
Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 31 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
If pursuant to Section 301 provision is made for either or both of (a) defeasance of the Securities of a series under Section 1302 or (b) covenant defeasance of the Securities of a series under Section 1303, then the provisions of such Section or Sections, as the case may be, together with the other provisions of this Article Thirteen, shall be applicable to the Securities of such series, and the Company may at its option by Board Resolution, at any time, with respect to the Securities of such series, elect to have either Section 1302 (if applicable) or Section 1303 (if applicable) be applied to the Outstanding Securities of such series upon compliance with the conditions set forth below in this Article Thirteen.
Upon the Company's exercise of the above option applicable to this Section, the Company shall be deemed to have been discharged from its obligations with respect to the Outstanding Securities of such series on the date the conditions set forth below are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities of such series and to have satisfied all its other obligations
under Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of Outstanding Securities of such series to receive, solely from the trust fund described in Section 1304 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) and interest on such Securities when such payments are due, (B) the Company's obligations with respect to such Securities under Sections 304, 305, 306, 607, 1002, 1003 and 1010, (C) the rights, powers, trusts, duties, and immunities of the Trustee hereunder and (D) this Article Thirteen. Subject to compliance with this Article Thirteen, the Company may exercise its option under this Section 1302 notwithstanding the prior exercise of its option under Section 1303 with respect to the Securities of such series.
Upon the Company's exercise of the above option applicable to this Section, the Company shall be released from its obligations under Sections 801, 1005, 1006, 1007, 1008, 501(4) (as to Sections 801, 1005, 1006, 1007 and 1008), 501(5), 501(6), 501(7) and 501(8) (if Section 501(8) is specified as applicable to the Securities of such series) with respect to the Outstanding Securities of such series on and after the date the conditions set forth below are satisfied (hereinafter, "covenant defeasance"). For this purpose, such covenant defeasance means that, with respect to the outstanding securities of such series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section, whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such securities shall be unaffected thereby.
The following shall be the conditions to application of either Section 1302 or Section 1303 to the Outstanding Securities of such series:
(1) the Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 609 who shall agree to comply with the provisions of this Article Thirteen applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (i) the principal of (and premium, if any, on) and each installment of principal of (and premium, if any) and interest on the Outstanding Securities of such series on the Stated Maturity of such principal or installment of principal or interest and (ii) any mandatory sinking fund payments or analogous payments applicable to the Outstanding Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture of such Securities. For this purpose, "U.S. Government Obligations" means securities that are (x) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.
(2) No Event of Default or event with which notice or lapse of time or both would become an Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit or, insofar as subsections 501(6) and (7) are concerned, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not cause the Trustee for the Securities of such series to have a
conflicting interest as defined in Section 608 and for purposes of the Trust Indenture Act with respect to any securities of the Company.
(4) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound.
(5) Such defeasance or covenant defeasance shall not cause any Securities of such series then listed on any registered national securities exchange under the Securities Exchange Act of 1934, as amended, to be delisted.
(6) In the case of an election under Section 1302, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred.
(7) In the case of an election under Section 1303, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
(8) Such defeasance or covenant defeasance shall be effected in compliance with any additional terms, conditions or limitations which may be imposed on the Company in connection therewith pursuant to Section 301.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for in the Indenture relating to either the defeasance under
Section 1302 or the covenant defeasance under Section 1303 (as the case may be)
have been complied with.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee -- collectively, for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Securities of such series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities of such series.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
ARTICLE FOURTEEN
Meetings of Holders
If Securities of a series are issuable in whole or in part as Bearer Securities, a meeting of Holders of Securities of such series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, notice, consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders of Securities of such series.
(a) The Trustee may at any time call a meeting of Holders of Securities of any series issuable in whole or in part as Bearer Securities for any purpose specified in Section 1401, to be held at such time and at such place in the Borough of Manhattan, The City of New York, or in London, as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 106, not less than 21 or more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% in principal amount of the Outstanding Securities of any series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 1401, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or in London for such meeting and may call such meeting for such purposes by giving notice thereof as provided in Subsection (a) of this Section.
To be entitled to vote at any meeting of Holders of Securities of any series, a person shall be (1) a Holder of one or more Outstanding Securities of such series, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.
The Persons entitled to vote a majority in principal amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders of Securities of such series; provided, however, that if any action is to be taken at such meeting with respect to a consent or waiver which
this Indenture expressly provides may be given by the Holders of not less than 66 2/3% in principal amount of the Outstanding Securities of a series, the Persons entitled to vote 66 2/3% in principal amount of the Outstanding Securities of such series constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In the absence of a quorum in any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 1402(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series that shall constitute a quorum.
Except as limited by the first proviso to Section 902, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in principal amount of the Outstanding Securities of that series; provided, however, that, except as limited by such first proviso to Section 902, any resolution with respect to any consent or waiver which this Indenture expressly provides may be given by the Holders of not less than 66 2/3% in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid only by the affirmative vote of the Holders of 66 2/3% in principal amount of the Outstanding Securities of that series; and provided further that, except as limited by such first proviso to Section 902, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance
with this Section shall be binding on all the Holders of Securities of such series and the related coupons, whether or not present or represented at the meeting.
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of such series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or, in the case of Bearer Securities, by having the signature of the person
executing the proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to holding of Bearer Securities. Such
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in
Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 1402(b), in which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall be entitled to one vote for each $1,000 principal amount (or the equivalent in ECU, any other composite currency or a Foreign Currency) of Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly pursuant to
Section 1402 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.
The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record, at least in triplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 1402 and, if applicable, Section 1404. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter of have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.
THE MEAD CORPORATION
By /s/ William R. Graber ---------------------------- William R. Graber Attest: Treasurer CSR. /s/ Tina M. Boyd ---------------------------- [SEAL] |
THE FIRST NATIONAL BANK OF
CHICAGO
By /s/ R. D. Manella ---------------------------- Vice President Attest: /s/ Kaye Wright ---------------------------- [SEAL] |
Assistant Vice President
State of Ohio
County of Montgomery, ss:
On the 2nd day of February, 1993, before me personally came William R. Graber, to me known, who, being by me duly sworn, did depose and say that he is Treasurer of The Mead Corporation, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
/s/ Jeffrey Hayman _________________________ [NOTARY STAMP APPEARS HERE] |
JEFFREY HAYMAN
ATTORNEY AT LAW
NOTARY PUBLIC-STATE OF OHIO
LIFETIME COMMISSION
SECTION 147.03 O.R.C.
State of Illinois
County of Cook, ss:
On the 3rd day of February, 1993, before me personally came R. D. Manella, to me known, who, being by me duly sworn, did depose and say that he is Vice President of The First National Bank of Chicago, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
/s/ Somsri Helmer _________________________ [NOTARY STAMP APPEARS HERE] |
OFFICIAL SEAL
SOMSRI HELMER
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES 1/14/95
EXHIBIT A
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE]
[Insert title or sufficient description of Securities to be delivered]
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by persons(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (as defined in
United States Treasury Regulations Section 1.165-12(c)(1)(v)) purchasing for
their own account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise the Issuer or its agent that such financial institution will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) are owned by United States or foreign financial institutions for purposes
of resale during the restricted period (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in addition, if the owner is a
United States or foreign financial institution described in clause (iii) above
(whether or note also described in clause (i) or (ii)), this is to further
certify that such financial institution has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America (including the States and District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex or by electronic transmission on or prior to the date on which you intend to submit your certification relating to the above-captioned Securities held by you for our account in accordance with your Operating Procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.
This certificate excepts and does not relate to _______ of such interest in the above-captioned Securities in respect of which we are not able to certify and as to which we understand an exchange for an interest in a permanent Global Security or an exchange for and delivery of definitive Securities (or, if relevant, collection of any interest) cannot be made until we do so certify.
We understand that this certificate may be required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings.
Date: _________________________, 19__
[To be dated no earlier
than the 15th day prior to
(i) the Exchange Date or (ii)
the relevant Interest Payment
Date occurring prior to the
Exchange Date, as applicable]
[Name of Person Making Certification]
Name:
Title:
EXHIBIT B
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. IN CONNECTION WITH THE
EXCHANGE OF A PORTION OF A TEMPORARY
GLOBAL SECURITY OR TO OBTAIN
INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE]
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that based solely on written certifications that we have
received in writing, by tested telex or by electronic transmission from each of
the persons appearing in our records as persons entitled to a portion of the
principal amount set forth below (our "Member Organizations") substantially in
the form attached hereto, as of the date hereof, ________ principal amount of
the above-captioned Securities (i) is owned by person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States person(s)"), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (as defined in U.S. Treasury Regulations Section 1.165-
12(c)(1)(v)) purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in each case (a) or (b),
each such financial institution has agreed, on its own behalf or through its
agent, that we may advise the Issuer or its agent that such financial
institution will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) is owned by United States or foreign financial
institutions(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations (Section 1.163-5(c)(2)(i)(D)(7)), and to
the further effect, that financial institutions described in clause (iii) above
(whether or not also described in clause (i) and (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for exchange (or, if relevant, collection of any interest) any portion of the temporary Global Security representing the above-captioned Securities excepted in the above-referenced certificates of Member Organizations and (ii) as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, collection of any interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with certain tax legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings.
Date: _______________, 19__
[To be dated no earlier
than the Exchange Date
or the relevant Interest
Payment Date occurring
prior to the Exchange
Date, as applicable)]
[MORGAN GUARANTY
TRUST COMPANY OF NEW
YORK, BRUSSELS
OFFICE, as Operator
of the Euro-clear
System] [CEDEL S.A.]
By _______________________
Exhibit 10.xxiii
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
Dated as of December 1, 1988
Relating to $44,000,000 The Industrial Development Board of the City of Phenix City, Alabama Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988
LEASE AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Lease Agreement is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of this Lease Agreement.)
Page ---- ARTICLE I DEFINITIONS Section 1.1 Definitions Section 1.2 Certain Rules of Interpretation ARTICLE II REPRESENTATIONS Section 2.1 Representations by the Issuer Section 2.2 Representations by the Company ARTICLE III LEASING CLAUSES AND TITLE PROJECT Section 3.1 Lease of the Project Section 3.2 Title to Project Section 3.3 Quiet Enjoyment ARTICLE IV ACQUISITION, CONSTRUCTION, INSTALLATION, EQUIPPING AND COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS Section 4.1 Acquisition, Construction, Installation, Equipping and Completion of the Project Section 4.2 Issuance of Bonds; Disbursements from the Project Fund Section 4.3 Establishment of Completion Date; Excess Proceeds Section 4.4 Insufficiency of Project Fund Section 4.5 Issuer to Pursue Remedies Against Suppliers, Contractors and Subcontractors and their Sureties -i- |
ARTICLE V EFFECTIVE DATE OF THIS AGREEMENT; DURATION; OF LEASE TERM; RENTAL PROVISIONS Section 5.1 Effective Date of This Agreement; Duration of Lease Term Section 5.2 Delivery of Acceptance of Possession Section 5.3 Rental Payments Section 5.4 Obligation of the Company Unconditional Section 5.5 Assignment and Pledge of Rental Payments and the Agreement Section 5.6 Agreement to Supply Letter of Credit Section 5.7 Purchase of Bonds Section 5.8 Optional Purchase of Bonds Section 5.9 Determination of Interest Rate Periods ARTICLE VI SPECIAL COVENANTS Section 6.1 Use of Project Section 6.2 Use of Proceeds Section 6.3 Indemnity Against Claims Section 6.4 Inspection of the Project Section 6.5 Company to Maintain Its Corporate Existence; Conditions Under Which Exceptions Permitted Section 6.6 Ownership; Further Assurances and Corrective Instruments Section 6.7 Maintenance of Project by Company Section 6.8 Redemption or Purchase of Bonds Section 6.9 Investment of Bond Fund and Project Fund Moneys Permitted Section 6.10 Non-Arbitrage Covenant Section 6.11 Removal and Substitution of Portions of Project Section 6.12 Taxes, Other Governmental Charges and Utility Charges Section 6.13 Insurance Required Section 6.14 Application of Net Proceeds of Insurance Section 6.15 Additional Provisions Respecting Insurance Section 6.16 Investment Credit Section 6.17 Granting of Easements Section 6.18 Release of Certain Land -ii- |
ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION Section 7.1 Damage and Destruction Section 7.2 Condemnation Section 7.3 Condemnation of Company-Owned Property ARTICLE VII: ASSIGNMENT; SUBLEASING, PLEDGING AND SELLING; REDEMPTION; RENT PREPAYMENT AND ABATEMENT; OPTION AND OBLIGATION TO PURCHASE PROJECT; OPTION TO EXTEND TERM OF AGREEMENT Section 8.1 Assignment and Subleasing Section 8.2 Pledge Under Indenture Section 8.3 Restrictions on Sale of Project by Issuer Section 8.4 Prepayment of Rents; Option to Purchase Project; Obligation to Purchase Project Section 8.5 Rent Abatements If Bonds Paid Prior to Maturity Section 8.6 Reference to Bonds Ineffective After Bonds Paid Section 8.7 Option to Extend ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Section 9.1 Events of Default Section 9.2 Remedies on Default Section 9.3 Agreement to Pay Attorneys' Fees and Expenses Section 9.4 No Additional Waiver Implied by One Waiver Section 9.5 Notice of Default ARTICLE X MISCELLANEOUS Section 10.1 Notices Section 10.2 Binding Effect Section 10.3 Severability Section 10.4 Amounts Remaining in the Bond Fund Section 10.5 Amendments Section 10.6 Execution in Counterparts Section 10.7 Applicable Law Section 10.8 Captions Section 10.9 Recording of Agreement Section 10.10 Net Lease -iii- |
EXHIBITS Exhibit "A" Project Land A-1 Exhibit "B" Description of Project B-1 Exhibit "C" Form of Requisition C-1 |
THIS LEASE AGREEMENT, dated as of December 1, 1988 between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation duly organized and existing under the laws of the State of Alabama, as lessor (the "Issuer"), and MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware (the "Company"), evidencing the agreement of the parties hereto.
In consideration of the respective representations and agreements hereinafter contained, the parties hereto agree as follows (provided that in the performance of the agreements of the Issuer herein contained, any obligation the Issuer may thereby incur for the payment of money shall not be a general debt, liability or obligation of the Issuer, or of the State of Alabama or any political subdivision thereof, but shall be payable solely out of the rents, revenues and proceeds derived from this Agreement (hereinafter defined) and the sale of the Bonds referred to herein:
ARTICLE I
(a) obligations incurred for labor and materials (including reimbursements payable to the Company or the Issuer and payments on contracts in the name of the Company or the Issuer) in connection with the acquisition, construction, installation and equipping of the Project;
(b) the cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of construction of the Project;
(c) all costs of engineering services, including the costs for test borings, surveys, estimates, plans and specifications and preliminary investigation therefor, and for supervising construction, as well as for the performance of all other duties required by or consequent upon the proper construction of the Project;
(d) overhead of the Company, to the extent not included in subparagraph (c) above, allocable to the Project by the Company in accordance with generally accepted accounting principles;
(e) interest to accrue in respect of the Bonds to the Completion Date;
(f) amounts paid to the United States Treasury pursuant to (S) 1.103- 15AT(d) and (e) of Temporary Treasury Regulations or any regulations promulgated pursuant to Section 148(f) of the Code;
(g) subject to the limitations of Section 147(g) of the Code, all expenses incurred in connection with the issuance of the Bonds, including without limitation initial compensation and expenses of the Trustee, legal expenses and fees, costs of printing and engraving, recording and filing fees, compensation of the underwriters, if any, rating agency fees and costs of the Letter of Credit;
(h) all other costs which may properly be paid or accrued for the acquisition, construction, installation, equipping or financing of the Project; and
(i) any sums required to reimburse the Company for advances made for any of the above items or for any other costs incurred or for work done which are properly chargeable to the Project.
or solid waste disposal facilities within the meaning of said Code section or facilities functionally related and subordinate thereto, excluding amounts paid as costs of issuance of the Bonds but including fees paid to the issuer of the Letter of Credit during the construction of the Project.
remaining after the payment of all expenses (including, without limitation, attorneys' fees and any Extraordinary Expenses of the Trustee) incurred in the collection of such gross proceeds.
"Herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this Agreement and not solely to the particular Article, Section or subdivision in which such word is used.
Any terms defined in Article I of the Indenture and not defined herein are incorporated by reference.
ARTICLE II
enforceability of the Bonds, the Indenture, this Agreement or any agreement or instrument to which the Issuer is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby.
to the acquisition, construction, installation or equipping of the Project was paid or incurred prior to such date.
ARTICLE III
ARTICLE IV
(a) It will acquire, construct, equip and install facilities necessary for the Project. The aforesaid acquisition, construction, equipping and installation shall be substantially in accordance with the Plans. The Project shall be the property of the Issuer and subject to the terms hereof.
(b) Subject to the provisions of the following paragraphs, it will cause to be acquired, constructed, equipped and installed such additional machinery, equipment
and related property described in the list attached hereto as Exhibit "B" and such other items of machinery, equipment and related property as in the Company's judgment may be necessary for the operation of the Project. Such additional machinery, equipment and related property shall become a part of the Project and shall be the property of the Issuer and subject to the terms hereof.
The Issuer and the Company agree that the Company from time to time may supplement or amend the Plans (including additions thereto or omissions therefrom), provided that no such amendment shall provide for a material addition to, deletion from or modification of the Plans unless there shall have been filed with the Issuer and the Trustee (i) a revised Exhibit "B" containing a description of the Project as revised by such amendment or modification, the accuracy of which shall have been certified by an Authorized Company Representative, and (ii) the written opinion of a firm of nationally recognized Bond Counsel experienced in the financing of solid waste disposal facilities stating that (a) the Project as provided for in such modified or amended Plans will constitute a "project" within the meaning of the Act, and (b) the expenditure of moneys from the Project Fund to pay the Cost of Construction in accordance with such amended or modified Plans will not impair the exemption of interest on Bonds from federal income taxation.
The Issuer hereby makes, constitutes and appoints the Company as its true, lawful and exclusive agent for the acquisition, construction, equipping and installation of the Project, and the Company hereby accepts such agency to act and do all things on behalf of the Issuer, to perform all acts and agreements of the Issuer hereinabove provided in this Section, and to bring any actions or proceedings against any person which the Issuer might bring with respect thereto as the Company shall deem proper. The Issuer hereby ratifies and confirms all actions of, and assumes and adopts all contracts entered into by, the Company with respect to the Project prior to the date hereof. This appointment of the Company to act as agent and all authority hereby conferred or granted is conferred and granted irrevocably until all activities in connection with the acquisition, construction, equipping and installation of the Project shall have been completed, and shall not be terminated prior thereto by act of the Issuer or of the Company. So long as the Company is not in default hereunder, upon the Completion Date (or at any time prior thereto upon the request of the company) the Issuer will assign to the Company all warranties and guarantees of all contractors, subcontractors, suppliers, architects and engineers for the furnishing of labor, materials or equipment or
supervision or design in connection with the Project and any rights or causes of action arising from or against any of the foregoing.
The Issuer agrees to complete the acquisition, construction, equipping and installation of the Project as promptly as practicable after receipt of the proceeds from the sale of the Bonds, to continue said acquisition, construction, equipping and installation with all reasonable dispatch and to use its best efforts to cause said acquisition, construction, equipping and installation to be completed as soon as practicable, delays incident to strikes, riots, acts of God or the public enemy beyond the reasonable control of the Issuer only excepted, but if said acquisition, construction and installation is not completed within the time herein contemplated there shall be no resulting liability on the part of the Issuer and no diminution in or postponement or abatement of the rents and other payments required by Section 5.3 to be paid by the Company.
The Issuer has authorized and directed the Trustee to disburse moneys from the Project Fund for payment or reimbursement of the Cost of Construction. Each disbursement from the Project Fund shall be made only upon receipt by the Trustee of a written requisition signed by the Authorized Company Representative in substantially the form of Exhibit "C" attached hereto, stating with respect to each payment to be made: (a) the requisition number, (b) the name and address (or wire transfer instructions) of the person, firm or corporation to whom payment is due, (c) the amount to be paid, (d) certifying that each obligation mentioned therein has been properly incurred and is a proper charge against the Project Fund, specifying in reasonable detail the purpose and circumstances of such obligation and certifying that such obligation has not been the basis of any previous withdrawal from the Project Fund, and (e) certifying that payment of such requisition will not result in less than 97% of the total proceeds of the sale of the Bonds (excluding amounts applied to pay costs of issuance of the Bonds) expended at that time having been used to pay Exempt Costs.
In approving or certifying any requisition under this Section the Issuer and the Trustee may rely as to the completeness and accuracy of all statements in such requisition upon the approval of or certification to such requisition by the Authorized Company Representative, and the Company hereby agrees to indemnify and save harmless the Issuer and the Trustee, and each of their directors, officers, members, agents and employees from any liability incurred in connection with any requisition so approved or certified.
In the event that moneys shall remain in the Project Fund after payment of all Cost of Construction of the Project, such moneys shall, at the direction of the Company, be used (i) for the redemption of Bonds in the largest amount possible at the earliest date permitted by the Indenture at which the redemption price for such Bonds to be redeemed is 100% of the principal amount thereof plus accrued interest to the redemption date or for the purchase of Bonds pursuant to Article IV of the Indenture or otherwise for the purpose of cancellation at any time prior to the earliest date permitted by the Indenture for the redemption of Bonds, (ii) paid into the Bond Fund to pay interest on the Bonds, or (iii) a combination of (i) and (ii) above; provided, however, that such moneys shall not be used as described in (ii) or (iii) above unless the Company supplies the Trustee with an opinion of Bond Counsel to the effect that such use will not adversely affect the tax-exempt status of the interest on the Bonds. The Company agrees that any investments which it may direct of such amounts shall result in a yield on such investments, computed in accordance with the applicable provisions of (S)(S) 1.103-13 and 1.103-14 of the Treasury Regulations, not in excess of the yield (computed in the same manner) on the Bonds.
ARTICLE V
(a) As rent for the Project, the Company agrees to pay to the Trustee, as assignee and pledgee of and for the account of the Issuer, for deposit in the Bond Fund, amounts sufficient, together with other moneys held by the Trustee under the Indenture and available therefor, to pay the principal of, and the redemption premium (if any) and the interest on, the Bonds as the same become due pursuant to the terms of the Indenture, as follows:
(i) On or prior to each date upon which interest on the Bonds is payable under the Indenture, a sum which will be equal to the interest on the Bonds coming due on such dates;
(ii) On or prior to any redemption date for the Bonds, a sum equal to the principal of, and the redemption premium (if any) and the interest on, the Bonds which are to be redeemed on such date; and
(iii) On or prior to December 1, 2023, a sum which will be equal to the principal amount of the Bonds coming due on such date.
If the Company defaults in any payment required by this paragraph (a), the Company will pay interest (to the extent allowed by law) on such amount until paid at the rate provided for in the Bonds.
(b) In furtherance of the foregoing, so long as any Bonds are outstanding the Company will pay all amounts required to prevent any deficiency by an act or failure to act by the Trustee, the Company, the Issuer, the Tender Agent or any other person.
(c) The Company will also pay: (i) the fees of the Trustee for rendering Ordinary Services and the Ordinary Expenses
of the Trustee and any Paying Agents under the Indenture, such fees and
expenses to be paid directly to the Trustee or Paying Agents for their
respective accounts as and when such fees and expenses become due and payable,
(ii) any fees for Extraordinary Services and the Extraordinary Expenses of the
Trustee and (iii) any expenses in connection with any redemption of the Bonds.
The Company may, without constituting grounds for an Event of Default
hereunder, withhold payment of any fees for Ordinary Services and
Extraordinary Services and Ordinary Expenses and Extraordinary Expenses to
contest in good faith the necessity of the same or to contest in good faith
the necessity for any services performed and expenses paid or incurred by any
Paying Agent.
(d) In addition to the payments required to be made by the Company pursuant to paragraph (a) above, the Company shall have the option to pay to the Trustee amounts sufficient to pay the purchase price of any Bonds which the Company has the option to purchase in lieu of redemption pursuant to Section 8.07 of the Indenture. All such payments shall be made to the Trustee at its principal corporate trust office or to the Tender Agent at its principal office, as the case may be, in lawful money of the United States of America.
(e) The Company will also pay, on or prior to each day on which a payment of purchase price of a Bond which has been tendered shall become due, an amount which will enable the Trustee or the Tender Agent, as the case may be, to make such payment in full in a timely manner.
(f) The Company need not pay any amount paid to Bondholders from the proceeds of a draw on the Letter of Credit or any Alternate Credit Facility.
(g) The Company need not pay any amount required to be paid by paragraphs (d) and (e) above to the extent of any amount paid to Bondholders from the proceeds of a remarketing of Bonds in accordance with Section 3.02 of the Indenture.
Section 5.4 Obligation of the Company Unconditional.
The obligation of the Company to make the rental payments as provided in Section
5.3 and to perform and observe the other agreements on its part contained herein
shall be absolute and unconditional notwithstanding any change in the tax or
other laws of the United States of America or of the State of Alabama or any
political subdivision of either thereof or any failure of the Issuer to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or connected with this Agreement. Nothing contained in
this Section
5.4 shall be construed to release the Issuer from the performance of any of the agreements on its part herein contained; and, in the event the Issuer should fail to perform any such agreement on its part, the Company may institute such action against the Issuer as the Company may deem necessary to compel performance or recover its damages for nonperformance so long as such action shall not violate the agreements on the part of the Company contained in the preceding sentence, but in no event shall the Company be entitled to any diminution of the amounts payable as provided in Section 5.3 hereof.
Article XII of the Indenture. The Issuer acknowledges that the Remarketing Agent, in undertaking its duties set forth in the Indenture with respect to the determination of the interest rates borne by the Bonds, will be acting as agent for and on behalf of the Issuer. The Issuer shall have no obligation or responsibility, financial or otherwise, with respect to the purchase or remarketing of Bonds or the making or continuation of arrangements therefor, except that the Issuer shall generally cooperate with the Company, the Trustee, the Tender Agent and the Remarketing Agent as contemplated in Article XII of the Indenture.
ARTICLE VI
In addition, the Company covenants with the Issuer, for the benefit of the Bondholders, that the proceeds of the Bonds
will not be used in any manner which would result in the loss of the exemption from federal income taxation of the interest on the Bonds.
The Company agrees to indemnify the Trustee, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the Indenture, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties thereunder or hereunder.
(a) The Company agrees that during the Lease Term, it will pay all costs of
operating, maintaining and repairing the Project; provided, that nothing in this
Section shall require the Company to maintain, operate or repair the Project if,
in the sole judgment of the Company, the Company shall determine that operation
of the Project or the manufacturing facilities the Project is designed to serve
is impossible, impracticable or uneconomic.
(b) The Company may, from time to time, in its sole discretion and at its own expense, make any additions,
modifications or improvements to the Project, including installation of additional machinery, equipment, and related property, which it may deem desirable for its business purposes; provided that all such additions, modifications and improvements do not adversely affect the use of the Project as solid waste disposal facilities. All machinery, equipment and related personal property so installed by the Company shall not be subject to this Agreement or the lien of the Indenture but shall be subject to the landlord's lien created under the Code of Alabama, 1975, Section 35-9-60. A11 such machinery, equipment and related property so installed by the Company may be modified or removed at any time while there exists no Event of Default hereunder; provided, that any damage to the Project occasioned by such modification or removal shall be repaired by the Company at its own expense.
(c) The Company shall not permit any mechanics', materialmen's, suppliers', vendors' or other similar lien to be established or remain against the Project for labor or materials furnished or services rendered in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that if the Company shall first notify the Trustee of its intention so to do, the Company may in good faith contest any mechanics', materialmen's, suppliers', vendors' or other similar lien filed or established against the Project, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the Issuer or the Trustee shall notify the Company that by nonpayment of any such items, the lien or security interests afforded by this Agreement or as to any part of the Project or the payments to be made pursuant to the Agreement or the Revenues will be materially endangered or the Project or any part thereof or the payments to be made pursuant to the Agreement or the Revenues will be subject to loss or forfeiture, in which event the Company shall promptly pay and cause to be satisfied and discharged all such unpaid items. The Issuer will cooperate fully with the Company in any such contest.
(a) the principal amount of Bonds to be redeemed or purchased;
(b) the date of such redemption or purchase; and
(c) in the case of a redemption of Bonds, directions to mail a notice of redemption in accordance with Section 8.04 of the Indenture.
(a) The Company and the Issuer each covenants that it shall take no action, nor shall the Company direct the Trustee to take or approve the Trustee's taking any action or direct the Trustee to make or approve the Trustee's making any investment or use of proceeds of the Bonds or any other moneys which may arise out of or in connection with, this Agreement, the Indenture or the Project, which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Code. In addition, the Company covenants and agrees to comply with the requirements of Section 148(f) of the Code as it may be applicable to the Bonds or the proceeds derived from the sale of the Bonds or any other moneys which may arise out of or in connection with, this Agreement, the Indenture or the Project.
(b) Unless the Company shall supply the Trustee and the Issuer with an opinion of Bond Counsel to the effect that failure to comply with all or any portion of this subsection (b) will not, by itself adversely affect the exclusion of the interest payable on the Bonds from gross income for purposes of federal income taxation, the Company hereby further covenants and agrees with the Issuer, as follows:
(1) If any part of the "gross proceeds" (hereinafter defined) of the Bonds has not been expended on Cost of
Construction within six (6) months of the date of issuance and delivery of the Bonds, the Company shall invest or cause such gross proceeds to be invested in the manner described in subparagraph (A) below and shall pay or cause to be paid to the United States the amounts described in subparagraph (B) below in accordance with the terms and conditions set forth therein.
(A) Except during any "temporary period" (hereinafter described, the aggregate amount of gross proceeds of the Bonds which are invested in "nonpurpose obligations" (hereinafter defined) having a "yield" (hereinafter defined) higher than the yield on the Bonds shall at no time during any "bond year" (hereinafter defined) exceed one hundred fifty percent (150%) of the "debt service" (hereinafter defined) on the Bonds for such bond year. In addition, the aggregate amount of gross proceeds of the Bonds invested in nonpurpose obligations having a yield higher than the yield on the Bonds shall be promptly and appropriately reduced as the amount of outstanding Bonds is reduced (whether by payment at maturity, mandatory sinking fund redemption, redemption prior to maturity, or otherwise). The Company shall not be required to sell or dispose of nonpurpose obligations if such sale or disposition would result in the realization of a loss, for federal income tax purposes, that exceeds the amount that would be rebated to the United States pursuant to the provisions of subparagraph (b)(l)(B) below (but for such sale or disposition), at the time of such sale or disposition if a rebate were due at such time. The provisions of the foregoing sentence shall not apply to the extent that other nonpurpose obligations acquired with the gross proceeds of the Bonds may be sold or disposed of without incurring the loss described above, and in any event the provisions of the foregoing sentence shall cease to apply thirty (30) days after the last day of the first "computation period" (defined in subparagraph (b)(l)(B)) ending thereafter on which such nonpurpose obligations can be sold or disposed of without incurring the loss described hereinabove. The provisions of this subparagraph (A) shall not apply to gross proceeds of the Bonds while such amounts are invested for the temporary periods described in Treasury
Regulations (S) 1.103-15AT(c)(2). (B) At the time or times hereinafter set forth, the Company shall pay or shall cause the Trustee to pay |
to the United States an amount (the "Rebate Amount") which is equal to the sum of:
(i) the excess of --
(a) the aggregate amounts earned from the date of issuance and delivery of the Bonds on all nonpurpose obligations in which gross proceeds of the Bonds have been invested (other than nonpurpose obligations attributable to an excess described herein) over
(ii) any income attributable to the excess described in clause (i) above.
The Rebate Amount payable to the United States shall be determined annually by the Company for each bond year during which Bonds remain outstanding and upon retirement of the last of the Bonds (each such period is hereinafter referred to as a "computation period"). Such Rebate Amounts shall be deposited annually in the Excess Investment Earnings Account created pursuant to the provisions of the Indenture. The Rebate Amount shall be paid to the United States in installments, as follows:
(I) subject to clause (III) below, the first such installment shall be paid no later than thirty (30) days after the end of the fifth (5th) bond year of the Bonds;
(II) subject to clause (III) below, an additional installment shall be paid on or prior to the last day of each additional installment payment period during which any of the Bonds remain outstanding. For purposes of this clause (II), an installment payment period shall commence on the last day on which a preceding installment of the Rebate Amount was required to be paid, and shall end on the day preceding the fifth (5th) anniversary of such payment date;
(III) anything herein to the contrary notwithstanding, the last installment shall be paid no later than sixty (60) days after the last of the Bonds has been retired; and
(IV) each installment shall be in an amount which, when aggregated with the amount of any prior installments paid to the United States hereunder, will equal at least ninety percent (90%) of the total Rebate Amount payable to the United States hereunder as of the date such installment is paid; provided, however, that the last installment shall be in an amount equal to the entire remaining balance of the Rebate Amount payable to the United States hereunder.
Each such payment to the United States shall be made to the Internal Revenue Service, Philadelphia, Pennsylvania 19255, or to such other address as shall be specified by the Department of Treasury and shall be accompanied by (i) a copy of the Information Return for Private Activity Bond Issues (Internal Revenue Service Form 8038) filed by the Issuer upon the issuance of the Bonds and (ii) a statement summarizing the determination of the Rebate Amount required to be paid to the United States. The Company shall maintain or cause to be maintained records of such determinations for each computation period until six years after payment in full of the Bonds and shall make such records available to the Issuer, the Trustee and their representatives upon reasonable request therefor. The Issuer hereby agrees to cooperate with the Company in making the determinations for each computation period required pursuant to this subparagraph. The Trustee agrees to cooperate with the Company in respect of the Company's obligations under this Section 6.10 by providing information to the Company regarding the investment of funds pursuant to the Indenture. The Trustee shall have no responsibility or obligation to make any computations or determinations under this Section 6.10 or to monitor or investigate compliance by the Company with the provisions hereof.
(3) For purposes of clause (a) of subparagraph (b)(l)(B) of this Section, the Company, in determining the aggregate amounts earned on all nonpurpose obligations acquired with gross proceeds of the Bonds --
(A) will take into account any gain or loss incurred on the disposition of any such nonpurpose obligation, and
(B) unless the Issuer otherwise elects, will not take into account any amounts earned on nonpurpose obligations held in a "bona fide debt service fund" (hereinafter defined) for the Bonds during any bond year in which the gross earnings on such fund do not exceed $100,000.
(4) Except as provided in (S) 1.103-15AT(d)(6) of the Treasury Regulations with respect to the purchase of obligations of the United States Treasury, at no time shall any of the gross proceeds of the Bonds be invested in (A) nonpurpose obligations having a purchase price which is not equal to the fair market value of comparable obligations or producing a yield which is not equal to the fair market yield of comparable obligations, or (B) in any other manner resulting in a "prohibited payment" (within the meaning of (S) 1.103-15AT(d)(6) of the Treasury Regulations) of any portion of the Rebate Amount, directly or indirectly, to a party other than the United States.
(c) The terms "bond year", "debt service", "gross proceeds", "nonpurpose obligations", and "yield" shall have the meanings set forth in Section 148 of the Code and Treasury Regulation (S) 1.103-15AT(b), and the term "bona fide debt service fund" shall have the meaning set forth in Treasury Regulation (S) 1.103-13(b)(12).
(d) No provision of this Agreement shall be construed to impose upon the Trustee any obligation or responsibility for compliance with arbitrage regulations.
(a) substitute (either by direct payment of the costs thereof or by advancing to the Issuer the moneys necessary therefor) and install other machinery, equipment or related property having equal or greater utility (but not necessarily having the same function or value) in the operation of the Project as a solid waste disposal or pollution control facilities (provided such removal and substitution shall not impair operating unity), all of which substituted machinery, equipment or related property shall become a part of the Project; or
(b) not make any such substitution and installation, provided (i) that in the case of the sale of any such machinery, equipment or related property to anyone other than itself or in the case of the scrapping thereof, the Company shall pay into the Bond Fund the greater of the proceeds from such sale, the scrap value thereof or the original cost thereof less depreciation in accordance with generally accepted accounting principles, as the case may be, (ii) that in the case of the trade-in of such machinery, equipment or related property for other machinery, equipment or related property not to be installed as a part of the Project, the Company shall pay into the Bond Fund the amount of the greater of the credit received by it in such trade-in or the original cost thereof less depreciation in accordance with generally accepted accounting principles, and (iii) that in the case of the sale of any such machinery, equipment or related property to the Company or in the case of any other disposition thereof, the Company shall pay into the Bond Fund an amount equal to the original cost thereof less depreciation at rates calculated in accordance with generally accepted accounting principles.
The removal of any portion of the Project pursuant to the provisions of this
Section shall not entitle the Company to any diminution in or postponement or
abatement of the rents payable under Section 5.3.
The Company shall promptly report to the Trustee each such removal,
substitution, sale, trade-in or other disposition which, together with other
prior unreported dispositions, in the aggregate results in proceeds under this
Section of $100,000 or more and shall pay to the Trustee such amounts as are
required by the provisions of the preceding subsection (b) of this Section to be
paid into the Bond Fund promptly after the sale, trade-in or other disposition
requiring such payment. The Company shall not remove or permit the removal of
any item constituting the Project except in accordance with the provisions of
this Section.
The Company shall deliver to the Issuer appropriate documents conveying to the Issuer title to any machinery, equipment or related property installed or placed at the Project Site pursuant to this Section, and upon the request of the Company, the Issuer shall deliver, and cause or direct the Trustee to deliver, to the Company appropriate documents conveying to the Company title to any property removed from the Project Site pursuant to this Section.
(a) upon or with respect to, or shall be or become liens upon, the Project or any portion thereof or any interest of the Issuer or the Company therein or under this Agreement;
(b) upon or with respect to the income or profits of the Issuer from the Project or under this Agreement;
(c) upon or with respect to the possession, operation, management, maintenance, alterations, repair, rebuilding, use or occupancy of the Project or any portion thereof; or
(d) upon this transaction or any document to which the Issuer or the Company is a party creating or transferring an interest or an estate in the Project;
under or by virtue of any present or future law, statute, ordinance, regulation or other requirement of any governmental authority, whether federal, state, county, city, municipal, school or otherwise.
The Company shall, at its sole cost and expense, procure or cause to be procured any and all necessary building permits, other permits, licenses and other authorizations required for the
lawful and proper construction, use, occupation, operation and management of the Project. The Company also agrees to pay or cause to be paid all lawful charges for gas, water, sewer, electricity, light, heat, power, telephone and other utility and service used, rendered or supplied to, upon or in connection with the Project and the Issuer will cooperate with the Company in securing such permits, licenses and authorizations.
The Company may, at its own expense and in its own name and behalf or in the name and behalf of the Issuer, in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assessments and other charges so contested to remain unpaid during the period of such contest and any appeal therefrom. The Issuer shall cooperate fully with the Company in any such contest. If the Company shall fail to pay any of the foregoing items required by this Section to be paid by the Company, the Issuer or the Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Issuer or the Trustee shall become an additional obligation of the Company to the one making the advancement, which amounts, together with interest thereon at the rate of interest borne by the Bonds from the date thereof, the Company agrees to pay.
(a) a copy of the instrument of grant or release, and
(b) a written application signed by the president or any vice president of the Company requesting the execution and delivery of such instrument and stating
(i) that such grant or release is not detrimental to the proper conduct of the business of the Company, and
(ii) that such grant or release will not impair the effective use or interfere with the operation of the Project.
(a) any unimproved part of the Project Land (on which none of the components comprising the Project is located but on which parking, transportation or utility facilities may be located) on which the Issuer proposes to construct improvements for lease or sale to another person or persons under another and different agreement, or
(b) any part of the Project land with respect to which the Issuer proposes to grant an easement or convey a fee, interest or other title to a railroad or other public or private carrier or to any public utility or public body in order that transportation facilities or services by rail, water, road or other means or utility services for the Project may be provided, increased or improved; provided, that if at the time any such amendment is made any of the Bonds are outstanding, there shall be deposited with the Trustee the following:
(i) a copy of such amendment as executed;
(ii) a resolution of the Issuer (A) stating that the Issuer is not in default under any of the provisions hereof or of the Indenture and that the Company is not to the knowledge of the Issuer in default under any of the provisions hereof, (B) giving an adequate legal description of that portion of the Project Land to be released, (C) stating the purpose for which the Issuer desires the release, (D) stating that the improvements which will be constructed or the facilities and services which will be provided, increased or improved will be such as will promote at least one of the public purposes of the Issuer and (E) requesting such release;
(iii) a certificate of an officer of the Company approving such amendment together with an officer's certificate stating that the Company is not in default under any of the provisions hereof;
(iv) a copy of the agreement between the Issuer and such other person wherein the Issuer agrees to construct improvements on the portion of the Project Land so requested to be released and agrees to lease or sell the same to such other person, and wherein such other person agrees to lease or purchase the same from the Issuer, or a copy of the instrument granting the easement or conveying the title or other interest to a railroad, public utility or public body; and
(v) a certificate of an Authorized Company Representative dated more than sixty (60) days prior to the date of such amendment and stating that, in the opinion of the person signing such certificate, (A) the portion of the Project Land so proposed to be released is necessary or desirable for railroad, utility services or roads to benefit the Project or is not otherwise needed for the operation of the Project for the purposes hereinabove stated, and (B) the release so proposed to be made will not impair the usefulness of the Project as a facility of a type which the Issuer is authorized to acquire under the laws pursuant to which the Issuer then exists, and will not destroy the means of ingress thereto and egress therefrom.
No release effected under this Section shall entitle the Company to any diminution in or postponement or abatement of the rents payable under Section 5.3.
ARTICLE VII
Section 7.2 Condemnation. Unless the Company shall exercise its option to prepay all rentals or purchase the Project pursuant to the provisions of Section 8.4, if the title in and to, or the temporary use of, the Project or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any other person acting under governmental authority, the Company shall be obligated to continue to pay the rents specified in Section 5.3. The Issuer and the Company shall cause the Net Proceeds received by them or any of them, from any award made in such eminent domain proceeding, to be paid to and held by the Company and applied in one or more of the following ways:
(a) the restoration of the Project to substantially the same condition as existed prior to the exercise of such power of eminent domain;
(b) the acquisition, by construction or otherwise, of other solid waste disposal facilities suitable for the Company's operations at the Project Site (which solid waste disposal facilities will be deemed a part of the Project and available for use by the Company and will be leased to the Company hereunder without the payment of any rents other than herein provided to the same extent as if such other improvements were specifically described herein); provided, that such solid waste disposal facilities will be acquired subject to no liens, security interests or encumbrances prior to the lien or security interest afforded by this Agreement and the Indenture, other than Permitted Encumbrances;
(c) redemption of the Bonds in accordance with the provisions of Article VIII of the Indenture; provided, that no part of any such condemnation award may be applied for such redemption unless (1) all of the Bonds are to be redeemed in accordance with the Indenture upon exercise of the option to purchase the Project pursuant to the provisions of Section 8.01(a) of the Indenture, or (2) if less than all of the Bonds are to be redeemed, the Company shall furnish to the Issuer and the Trustee a certificate of the Authorized Company Representative stating (i) that the property forming a part of the Project that was taken in such eminent domain proceeding is not essential to the Company's use or occupancy of the Project, (ii) that the Project has been restored to a condition substantially equivalent to its condition prior to the taking in such eminent domain proceeding, or (iii) that solid waste disposal facilities have been acquired which are suitable for the Company's operations at the Project as contemplated by the foregoing subsection (b) of this Section; or
(d) payment into the Bond Fund of an amount sufficient to provide for payment in full of the Bonds.
The Issuer shall cooperate fully with the Company in the handling and conduct of any prospective or pending eminent domain proceeding with respect to the Project or any part thereof and shall, to the extent it may lawfully do so, permit the Company to litigate in any such proceeding in the name and on behalf of the Issuer. In no event will the Issuer voluntarily settle, or consent to the settlement of, any prospective or pending eminent domain proceeding with respect to the Project or any part thereof without the written consent of the Company.
ARTICLE VIII
(a) no assignment (other than pursuant to Section 6.5) or sublease shall relieve the Company from primary liability for any of its obligations hereunder, and if any such assignment occurs, the Company shall continue to remain primarily liable for the payment of the rents specified in Section 5.3 and for performance and observance of the other agreements on its part herein provided to be performed and observed by it; and
(b) the Company shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Issuer and to the Trustee a true and complete copy of each such assignment or sublease, as the case may be, together with any instrument of assumption.
(a) The Company shall have the option to prepay any part of the rents payable under Section 5.3, and the Issuer agrees that the Trustee may accept such prepayment when the same is tendered by the Company, upon giving written notice to the Trustee at least four Business Days prior to the thirtieth day before the date set for redemption, to the extent that the Bonds are subject to optional redemption in part pursuant to Section 8.01(a) of the Indenture.
(b) The Company shall have the option to purchase the Project by prepaying all of the rents payable under Section
5.3, and the Issuer agrees that the Trustee may accept such prepayment when the same is tendered by the Company, upon giving written notice to the Trustee at least four Business Days prior to the thirtieth day before the date set for redemption, to the extent that the Bonds are subject to optional redemption in whole pursuant to Section 8.01(a) of the Indenture.
(c) The Company shall be obligated to prepay a portion of the rentals payable under Section 5.3, and the Issuer agrees that the Trustee may accept such prepayment when the same is tendered by the Company, to the extent that the bonds are subject to mandatory redemption in part pursuant to Section 8.01(b) of the Indenture.
(d) The Company shall be obligated to purchase the Project by prepaying all of the rents payable under Section 5.3, or to prepay all of the rents payable under Section 5.3 without purchasing the Project, and the Issuer agrees that the Trustee may accept such prepayment when the same is tendered by the Company, to the extent that Bonds are subject to mandatory redemption in whole pursuant to Section 8.01(b) of the Indenture.
(e) The Company shall have the option to purchase the Project by providing for payment of the Bonds pursuant to Article XV of the Indenture.
(f) The Company shall be obligated to purchase, and the Issuer agrees to sell, the Project for ten dollars ($10.00) at the expiration of the Lease Term, following payment in full of the Bonds.
All prepaid rents shall be used for the redemption or purchase of Bonds in the manner and to the extent provided in the Indenture. The options granted to the Company pursuant to this Section shall be and remain prior and superior to the Indenture and may be exercised whether or not there exists an Event of Default hereunder, provided that the existence of such Event of Default will not result in nonfulfillment of any condition to the exercise of any such option. Upon the expiration of the Lease Term, or the sooner termination of the Lease Term, the Issuer will, upon receipt of evidence provided by the Trustee satisfactory to it that none of the Bonds remain outstanding under the Indenture, deliver to the Company documents conveying to the Company good and marketable fee simple title in and to the Project, as the Project then exists, subject to the following: (a) those liens, security interests and encumbrances (if any) to
which said title in and to the Project was subject when conveyed to the Issuer,
(b) those liens, security interests and encumbrances created by the Company or
to the creation or suffering to which the Company consented, (c) those liens,
security interests and encumbrances resulting from the failure of the Company to
perform or observe any of its agreements contained herein, (d) Permitted
Encumbrances other than the Indenture, and (e) any right and title of any
condemning authority.
the terms and conditions of this Agreement shall apply during such additional
term; except that the provisions of Sections 7.1 and 7.2 shall not apply and
except further that the Company shall not be required to carry any insurance for
the benefit of the Trustee, but shall be required to carry insurance under
Section 6.13 for the benefit of the Board as its interest may appear. In the
event the Company exercises the option to extend the Lease Term granted in this
Section 8.7, it shall, at any time after commencement of such additional term,
have the right to terminate this Agreement upon giving to the Board notice in
writing not less than 10 days prior to the date of termination. At any time
during, or at the end of, the extended Lease Term provided for in this Section
8.7, the Company may purchase the Project for $100.
ARTICLE IX
(a) An "Event of Default" occurs and is continuing under the Indenture or under either of the Guarantee Agreements.
(b) Failure by the Company to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder, for a period of ninety (90) days after written notice, specifying such failure and requesting that it be remedied, is given to the Company by the Issuer or the Trustee; provided, however, if the failure stated in the notice cannot be remedied within such period, it shall not constitute an "Event of Default" if corrective action is instituted by the Company within the applicable period and diligently pursued until the default is corrected.
(c) Either Mead or the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of it or of all or a substantial part of its property; (ii) admit in writing its inability, or be generally unable, to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, (vi) fail to controvert in a timely or appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under said Federal Bankruptcy Code, or (vii) take any action for the purpose of effecting any of the foregoing.
(d) A proceeding or case shall be commenced, without the application or consent of either Mead or the Company, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding-up, or composition or adjustment of debts, of either Mead or the Company, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of either Mead or the Company or of all or any substantial part of any of their assets, or (iii) similar relief in respect of the Company under any law relating to bankruptcy, insolvency, reorganization, winding- up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or any order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of sixty (60) days from commencement of such proceeding or case or the date of such order, judgment or decree, or an order the Company shall be entered in an involuntary case under said Federal Bankruptcy Code.
(e) The dissolution or liquidation of the Company except as may be permitted by the terms of Section 6.5.
(a) By written notice to the Company, the Issuer may declare a11 amounts payable hereunder to be immediately due and payable, whereupon the same shall become immediately due and payable;
(b) The Issuer may take whatever action at law or in equity may appear necessary or desirable to collect the amounts referred to in (a) above then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Company under this Agreement.
Any amounts collected pursuant to action taken under this Section 9.2 shall be paid into the Bond Fund and applied in accordance with the provisions of the Indenture or, if the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the provisions of the Indenture) and the fees and expenses of the Trustee and the Paying Agents and all other amounts required to be paid under the Indenture shall have been paid, to the Company.
ARTICLE X
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement to be executed in their respective corporate names and their respective corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the date first above written.
THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PHENIX
CITY, ALABAMA
(Corporate Seal)
By: /s/ Kenneth A. Roberts ---------------------- Chairman Attest: /s/ Carlotta Waldrop -------------------- Secretary |
MEAD COATED BOARD, INC.
(Corporate Seal)
By: /s/ W. D. BLOEBAUM, JR. ----------------------- Title: TREASURER Attest: /s/ JEFFREY L. HAYMAN --------------------- Title: ASSISTANT SECRETARY |
STATE OF ALABAMA :
: ss.
COUNTY OF RUSSELL :
On this 20th day of December, 1988, before me appeared Kenneth Roberts, to me personally known, who being by me duly sworn, did say that he is Chairman of The Industrial Development Board of the City of Phenix City, Alabama and that the seal affixed to the foregoing Lease Agreement is the sale of The Industrial Development Board of the City of Phenix City, Alabama and that the foregoing Lease Agreement was signed and sealed on behalf of The Industrial Development Board of the City of Phenix City, Alabama, and the said Chairman acknowledges the execution of the foregoing Lease Agreement as the free act and deed of The Industrial Development Board of the City of Phenix City, Alabama.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ -------------------------------- Notary Public |
[NOTARIAL SEAL] My Commission Expires: 2/25/92
STATE OF OHIO
COUNTY OF MONTGOMERY
On this 22nd day of December, 1988, before me appeared W.D. Bloebaum, Jr. to me personally known, who, being by me duly sworn, did say that he is Treasurer of Mead Coated Board, Inc., a Delaware corporation, qualified to do business in the State of Alabama, and that the seal affixed to the foregoing Lease Agreement is the seal of Mead Coated Board, Inc., and that the foregoing Lease Agreement was signed and sealed on behalf of Mead Coated Board, Inc. by authority of its board of directors, and the said Treasurer acknowledges the execution of the foregoing Lease Agreement as the free act and deed of Mead Coated Board, Inc.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Robert A. Selak ------------------------------ Notary Public |
[NOTARIAL SEAL] My Commission Expires: ROBERT A. SELAK, Attorney at Law Notary Public State of Ohio My Commission has no Expiration Date Section 147.03 O. R. C. |
EXHIBIT A
PROJECT LAND
The Project Land includes the following property:
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 31(degrees) 59' 52" E, 291.25' to the point of beginning; thence S 0(degrees) 00' W, 231.00' to a point on the north side of a rectangular area (Truck Dumper) bounded by a N 792,366.0, N 792,326.5, and E 234,642.0, and E 234,765.5, said rectangular area being the point of ending; said land being 0.21 (plus or minus) acres;
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14, N, R 30 E, County of Russell, State of Alabama; thence N 31(degrees) 59' 52" E, 291.25' to the point of beginning; thence S 8(degrees) 20' 17" W, 284.46' to the center of a rectangular area which is
parallel to last said course 22' north to south by 15' east to west; thence S 81(degrees) 39' 40" E, 843.58' to a parallel rectangular area (Bark Hog Structure) 26.00' north to south (10.00' lying south of last said course) by 37.50'; thence continue along last said course 27.00'; thence N 45(degrees) 07' 38" E, 350.71' to the point of ending; said land being 0.63 + acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19,
E 233,250.02 of the West Zone of the State of Georgia Coordinate System;
thence S 25(degrees) 19' 16" E, 663.98' to the point of beginning
(N 792,550.0 E 233,534.0); thence S 0(degrees) 00' W, 50.00'; thence
N 90(degrees) 00' E, 121.00'; thence N 0(degrees) 00' W, 50.00'; thence
N 90(degrees) 00' W, 121.00' to the point of beginning; said land being
0.14 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48(degrees) 35' 13" W, 1186.73' to the point of beginning (N 791,565.0. E 233,610.0); thence S 0' 00" W, 12.00'; thence N 90(degrees) 00' W, 64.00'; thence N 0' 00" W, 12.00'; thence N 90' 00" E, 64.00' to the point of beginning; said land being 0.02 (plus or minus) acres; and
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence S 29(degrees) 39' 25" E, 461.76' to the point of beginning (N 792,748.92, E 233,478.50); thence N 90(degrees) 00' E, 73.57'; thence S 0(degrees) 00' W, 34.50'; thence N 90(degrees)
00' W, 11.82'; thence S 0(degrees) 00' W, 143.17'; thence N 90(degrees) 00' W, 90.62'; thence N 0(degrees) 00" W, 83.08'; thence N 90(degrees) 00" E, 28.87'; thence N 0(degrees) 00' W, 94.59' to the point of beginning; said land being 0.32 (plus or minus) acres;
(collectively, the "Unimproved Land"); less, in each case, any structures constructed and leased pursuant to a Lease Agreement dated July 1, 1977, and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977 Lease") under which Lessor leased to Georgia Kraft Company ("Georgia Kraft") a parcel of land in Russell County, Alabama as more particularly described in Exhibit A to the Lease (the "1977 Land"), together with certain items of equipment described in Exhibit B to the 1977 Lease (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated Board, Inc.);
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (the 1977 Land less and except the 1988 Land) in order to provide all necessary or convenient ingress or egress between the Unimproved Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Unimproved Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Unimproved Land to the Board Premises, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications,
instrumentation and control, and other similar facilities to the Unimproved Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Unimproved Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Unimproved Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Unimproved Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Unimproved Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Unimproved Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Unimproved Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Unimproved Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Unimproved Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Unimproved Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the Unimproved Land in respect of any additional improvements constructed adjacent to the Unimproved Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Unimproved Land.
EXHIBIT "B"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of December 1, 1988
PROJECT SUMMARY
Mead Coated Board, Inc. (the "Company") presently operates a linerboard mill (the "Mill") in Russell County, Alabama, near the City of Phenix City, Alabama. In connection with an expansion of the Mill, the Company is undertaking the acquisition, construction and installation of a wood refuse burning boiler which will burn bark, sawdust, fines and other waste, including fuel wood chips, derived from the cutting and processing of trees ("wood waste") to produce steam for use in the manufacturing process at the Mill and certain other sewage facilities and solid waste disposal facilities.
The "Project" will consist of six major subsystems -- a wood waste receiving, storing and handling system; a wood waste fired boiler (the "Boiler") and auxiliary equipment, including facilities to control air pollution in connection with the operation of the Boiler; modifications to two existing wood waste boilers; an ash disposal system to dispose of bottom ash from the Boiler; a system to dispose of sludge and other solid waste generated at the Mill; and a sanitary sewage treatment system.
The Boiler will dispose of wood waste material generated by the Company in its operations and wood waste which the Company will obtain from sawmills and other wood users in the area surrounding the Mill which generate the wood waste in the course of processing wood products. The wood waste will be brought to the Mill by the outside suppliers and unloaded by means of an hydraulic truck dumper which is included as part of the Project. The truck dumper will discharge the wood waste into a live bottom hopper from which it will be delivered onto a transfer conveyor. The transfer conveyor discharges the wood waste to a rotary disc screen for the removal of oversized particles. All oversized material rejected by the rotary disc screen will pass through a bark hog for size reduction and rejoin the wood waste which
passes through said screen on a storage conveyor which will discharge such material into a wood waste storage area. An electromagnet will be installed ahead of the bark shredder to remove tramp metal from the wood waste in order to prevent damage to the bark hog.
Wood waste will be reclaimed from the storage area and placed on a reclaim conveyor which will discharge it onto a transfer conveyor. The transfer conveyor will be equipped with an electromagnet to again remove tramp metal and prevent damage to the boiler fuel feed system and will also be equipped with a weightometer to measure fuel usage.
From the transfer conveyor, the wood waste will be discharged onto an existing reclaim conveyor to transfer the wood waste to the Boiler. The conveyor will discharge the wood waste into a live bottom surge bin which will supply fuel to the Boiler.
The wood waste Boiler will consist of a two drum bent tube type boiler with necessary boiler fittings and trim, steel supporting structure, tile and refractory, insulated steel casing, accessories, tubular air heater, pneumatic wood refuse fuel burners, variable speed fuel feeders, forced draft fan, induced draft fan, ductwork, combustion controls with a flame safety system, instrumentation, enclosure building, and the necessary foundations, electrical systems and insulation.
The Boiler will be specially designed and equipped to burn wood waste as fuel. Special design features will include a stoker on which the wood waste will be burned and by which the resulting ash will be discharged. In addition, the Boiler will be designed to withstand the highly abrasive internal atmosphere created by sand contained in wood waste.
The wood waste will be injected into the Boiler by means of airswept fuel feeders through the wall of the Boiler. A portion of the wood waste will be burned in suspension and the remainder and some of the ashes from the combustion will fall onto the grate at the bottom of the boiler furnace. The grate is equipped with a large number of small holes through which preheated air is forced to aid combustion. Energy released through the combustion of the wood waste will be used to generate steam for process use. Boiler exhaust gases are used to preheat combustion air for improved fuel efficiency.
Electrical power generation (turbine generator) and distribution for the solid waste disposal facilities is included in the Project.
In order to meet air pollution control requirements, the Boiler will be equipped with a multiple cyclone mechanical separator for removal of relatively large particles entrained in the exhaust gases and an adjustable throat wet venturi scrubber whereby water is injected into the boiler exhaust gas train to wash entrained particulates from the gases.
Certain modifications will be made to two existing wood waste boilers, including an upgrade of the existing boiler feedwater treatment system and an upgrade of the distributed control system for the existing wood waste boilers.
Bottom ashes from the combustion process in the Boiler will accumulate on the grate and will be discharged into an ash hopper for disposal by means of an ash handling system. This system is a sluice system in which the ash will be mixed with water and pumped to three ash ponds.
The sludge disposal system will dispose of sludge created in the treatment of Mill effluent. The sludge from the primary effluent treatment system will be pumped to a sludge mix tank before passing through a macerator to break up oversized solid pieces. This primary sludge will then be combined with sludge from the secondary effluent treatment system and pumped to two rotary thickeners and two sludge presses to remove water. Chemicals will be added to the sludge prior to the thickeners to aid in dewatering. After this treatment, the sludge is then transported in specially-designed trucks to an existing landfill for final disposal.
Sanitary waste will be collected and processed in a sanitary waste treatment plant before discharge into the effluent treatment system.
The estimated costs of the construction of the Project are as follows:
Wood waste handling system $ 3,621,270 Bark conveyors Fines pneumatic conveyor system Truck dumper and conveyor Hog and screen system Wood waste reclaimers Reclaimed wood waste conveyors 1,133,753 New wood waste boiler Boiler feedwater treatment system 1,322,546* Boiler feedwater pumping system 637,493* Removal and demolitional of existing facilities 79,532 Distributed control system 712,000* Boiler, including auxiliary equipment 21,220,250 Turbine generator 598,200* Power distribution system 178,932* Modifications to existing wood waste boilers Upgrade boiler feedwater treatment system 182,150* Upgrade existing wood waste boilers' distributed control system 1,424,000 Ash handling system 200,000 Sludge disposal system (including sludge trucks) 2,969,417 Sanitary treatment system 427,524 Miscellaneous Vendor representatives assisting in installation 10,000 Indirect costs relating to turnkey contracts 3,652,123 Indirect costs relating to conventional contracts 2,197,687 Interest during construction (net of anticipated investment earnings of $1,400,000) 1,600,000 ----------- TOTAL QUALIFYING COSTS $42,166,877 Non-qualifying costs Gas supply system and gas burners for new wood waste boiler $ 520,005 New boiler feedwater treatment system 1,013,118 ----------- TOTAL COSTS $43,700,000 |
* Allocated between qualifying and non-qualifying functions based on use.
EXHIBIT "C"
REQUISITION AND CERTIFICATION
Request No._____ Date: __________
TO: Citibank, N. A., as Trustee
5 Hanover Square, 14th Floor
New York, New York 10043
Attention: Corporate Trust Department
The undersigned Authorized Company Representative designated pursuant to the terms of a Lease Agreement, dated as of December 1, 1988 (the "Agreement"), between and among The Industrial Development Board of the City of Phenix City, Alabama, a public corporation created and existing under the laws of the State of Alabama (the "Issuer"), and Mead Coated Board, Inc., a Delaware corporation (the "Company"), hereby requests that there be paid from the "Project Fund" (herein below described) the sum of $__________ and in that connection, DOES HEREBY CERTIFY, as follows:
1. The requested payment has been properly incurred and is a proper charge against The Industrial Development Board of the City of Phenix City, Alabama Project Fund -- Mead Coated Board Project, 1988 and has not been the basis of any previous withdrawal from said Project Fund.
2. Payment should be made to:
Name:
Address or Wire Instructions:
3. The purpose and circumstances of such obligation are as follows:
4. Payment of such obligation will not result in less than 97% of the total proceeds of the sale of the "Bonds" (defined in the Agreement) (excluding amounts applied to pay costs of issuance of the Bonds) deposited with the Project Fund expended as of the date hereof having been used to pay "Exempt Costs" (as defined in the Agreement).
This______ day of _________, 19__. MEAD COATED BOARD, INC. By: --------------------------------- Authorized Company Representative |
LEASE AGREEMENT
between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
Dated as of December 1, 1988
This Lease Agreement and all right, title and interest of The Industrial Development Board of the City of Phenix City, Alabama in any rental payments and other receipts and revenues derived under this Lease Agreement have been assigned to AmSouth Bank N.A., as Trustee under the Trust Indenture, dated as of even date herewith, from The Industrial Development Board of the City of Phenix City, Alabama, which secures $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A.
This instrument prepared by:
Smith & Schnacke A Legal Professional Association 2900 DuBois Tower 511 Walnut Street Cincinnati, Ohio 45202
(The Table of Contents for this Lease Agreement is for
convenience of reference only and is not intended to define,
limit or describe the scope or intent of any provisions of this
Lease Agreement.)
Page ---- PARTIES ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION.................. 1 Section 1.1 Definitions............................................ 1 Section 1.2 Rules of Construction.................................. 5 ARTICLE II REPRESENTATIONS AND WARRANTIES......................... 6 Section 2.1 Representations and Warranties by the Board........................................... 6 Section 2.2 Representations and Warranties by the Company......................................... 8 ARTICLE III LEASING CLAUSES AND TITLE.............................. 10 Section 3.1 Lease of the Project................................... 10 Section 3.2 Warranty of Title...................................... 10 Section 3.3 Quiet Enjoyment........................................ 10 ARTICLE IV COMPLETION OF THE PROJECT FACILITIES; ISSUANCE OF THE BONDS.................................. 11 Section 4.1 Agreement to Acquire, Construct and Install the Project Facilities......................... 11 Section 4.2 Agreement to Issue Bonds; Application of Bond Proceeds....................................... 12 Section 4.3 Company Required to Pay Notes If Project Fund Insufficient........................... 12 Section 4.4 Board to Pursue Remedies Against Suppliers, Contractors and Subcontractors and Their Sureties............................................... 12 Section 4.5 Issuance of Additional Bonds........................... 13 |
ARTICLE V EFFECTIVE DATE OF THIS AGREEMENT; DURATION OF LEASE TERM; RENTAL PROVISIONS................................................... 13 Section 5.1 Effective Date of This Agreement; Duration of Lease Term....................................... 13 Section 5.2 Delivery and Acceptance of Possession................................................... 13 Section 5.3 Rents and Other Amounts Payable.............................. 14 Section 5.4 Place of Rental Payments..................................... 15 Section 5.5 Obligations of Company Hereunder Absolute and Unconditional................................... 15 Section 5.6 Company's Performance Under Indenture.................................................... 16 ARTICLE VI MAINTENANCE, MODIFICATION, TAXES AND INSURANCE................................................ 16 Section 6.1 Maintenance and Modification of Project Facilities by Company................................ 16 Section 6.2 Removal of Portions of Project............................... 17 Section 6.3 Taxes, Other Governmental Charges and Utility Charges.......................................... 18 Section 6.4 Insurance Required........................................... 19 Section 6.5 Application of Net Proceeds of Insurance..................... 20 Section 6.6 Additional Provisions Respecting Insurance.................................................... 20 Section 6.7 Other Board Expenses......................................... 20 Section 6.8 Advances by Board or Trustee................................. 20 Section 6.9 Indemnification of Board and Trustee......................... 20 Section 6.10 Investment Credit............................................ 21 ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION......................... 22 Section 7.1 Damage and Destruction....................................... 22 Section 7.2 Condemnation................................................. 22 Section 7.3 Condemnation of Company-Owned Property....................... 23 Section 7.4 Further Assurances and Corrective Instruments................ 23 ARTICLE VIII SPECIAL AGREEMENTS........................................... 23 Section 8.1 No warranty of Condition or Suitability by the Board......... 23 Section 8.2 Inspection of the Project.................................... 24 |
Section 8.3 Company to Maintain Its Corporate Existence; Exceptions Permitted................................................. 24 Section 8.4 Qualification in the State................................ 24 Section 8.5 Granting of Easements..................................... 25 Section 8.6 Release of Certain Land................................... 25 ARTICLE IX ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING; REDEMPTION; RENT PREPAYMENT AND ABATEMENT............................. 27 Section 9.1 Assignment and Subleasing ................................ 27 Section 9.2 Pledge Under Indenture.................................... 27 Section 9.3 Restrictions on Sale of Project by Board.................. 27 Section 9.4 Redemption of Bonds....................................... 28 Section 9.5 Prepayment of Rents....................................... 28 Section 9.6 Rent Abatements if Bonds Paid Prior to Maturity........... 28 Section 9.7 Reference to Bonds Ineffective After Bonds Paid........... 29 ARTICLE X EVENTS OF DEFAULT AND REMEDIES............................ 29 Section 10.1 Events of Default Defined................................. 29 Section 10.2 Remedies.................................................. 30 Section 10.3 No Remedy Exclusive....................................... 31 Section 10.4 Agreement to Pay Attorneys' Fees and Expenses............. 31 Section 10.5 No Additional Waiver Implied by One Waiver................ 32 Section 10.6 Waiver of Appraisement, Valuation, etc.................... 32 Section 10.7 Waiver of Events of Default............................... 32 ARTICLE XI OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE PROJECT................................................... 32 Section 11.1 General Option to Prepay Rent and Purchase Project........ 32 Section 11.2 Conveyance on Purchase.................................... 33 Section 11.3 Relative Positions of Options and Indenture............... 33 ARTICLE XII MISCELLANEOUS............................................. 34 Section 12.1 Notices................................................... 34 Section 12.2 Binding Effect............................................ 34 |
Section 12.3 Severability............................................ 35 Section 12.4 Amounts Remaining in Bond Fund.......................... 35 Section 12.5 Amendments, Changes and Modifications................... 35 Section 12.6 Execution Counterparts.................................. 35 Section 12.7 Captions................................................ 35 Section 12.8 Recording of Agreement.................................. 35 Section 12.9 Law Governing Construction of Agreement................. 35 Section 12.10 Net Lease............................................... 35 SIGNATURES AND SEALS..................................................... 36 ACKNOWLEDGMENTS.......................................................... 37,38 EXHIBIT "A" - DESCRIPTION OF PROJECT LAND................................ 39 EXHIBIT "B" - PROJECT SUMMARY............................................ 47 |
THIS LEASE AGREEMENT, made and entered into as of December 1, 1988, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public corporation organized and existing under the laws of the State of Alabama, as lessor, and MEAD COATED BOARD, INC. (the "Company"), a corporation organized and existing under the laws of the State of Delaware and qualified to do business in the State of Alabama, as lessee;
In consideration of the respective representations and agreements hereinafter contained, the Board and the Company agree as follows (provided, that in the performance of the agreements of the Board herein contained, any obligation it may thereby incur for the payment of money shall not be a general debt on its part but shall be payable solely out of the rents, payments and revenues derived from this Lease Agreement, the sale of the "Bonds" as hereinafter defined, the insurance and condemnation awards herein described and any other revenues arising out of or in connection with its ownership of the "Project" as hereinafter defined):
"Act" means the statutes codified as Code of Alabama 1975, Title 11, Chapter 54, Article 4, as amended and supplemented and at the time in force and effect;
"Additional Bonds" means the bonds of any series, other than the Bonds, authorized under the Indenture and authenticated and delivered in accordance with Section 401 of the Indenture.
"Agreement" means this Lease Agreement as it now exists and as it may hereafter be amended pursuant to Section 12.5 of this Lease Agreement and Article XV of the Indenture;
"Authorized Board Representative" means the person at the time designated to act on behalf of the Board by written certificate furnished to the Company and the Trustee containing the specimen signature of such person and signed on behalf of the Board by its Chairman or Vice Chairman. Such certificate may designate an alternate or alternates;
"Authorized Company Representative" means the person at the time designated to act on behalf of the Company by written certificate furnished to the Board and the Trustee containing the specimen signature of such person and signed on behalf of the Company by the President or any Vice President of the Company. Such certificate may designate an alternate or alternates;
"Board" means The Industrial Development Board of the City of Phenix City, Alabama, a public corporation of the State, and its successors and assigns;
"Bond Fund" means the Bond principal and interest payment fund created pursuant to Section 702 of the Indenture and within which have been established a general account and a special account. Any reference herein to the "Bond Fund" without further limitation or explanation shall be deemed to be a reference to the general account in the Bond Fund;
The term "bondholder" or "holder of the Bonds" means the registered owner of any Bond;
"Bonds" means the $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, issued pursuant to the Indenture;
"City" means the City of Phenix City, Alabama, a municipal corporation of the State;
"Code" means the Internal Revenue Code of 1986, as amended, and the applicable Regulations thereunder;
"Company" means the corporation designated as such in the first paragraph hereof and its successors and assigns, including any surviving, resulting or transferee corporation as provided in Section 8.3;
The term "default" means an event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default;
"Event of Default" means one of the events so denominated and described in Section 10.1;
"Government Obligations" means (a) direct obligations of the United States of America, (b) obligations unconditionally guaranteed by the United States of America and (c) securities or receipts evidencing ownership interests in obligations or specified portions (such as principal or interest) of obligations described in (a) or (b).
"Indenture" means the Trust Indenture, of even date herewith, between the Board and the Trustee, including any indenture supplemental thereto;
"Lease Term" means the duration of the leasehold interest created hereby as specified in Section 5.1;
"Net Proceeds", when used with respect to any insurance or condemnation award, means the gross proceeds from the insurance or condemnation award with respect to which that term is used remaining after payment of all expenses (including attorneys' fees and any Extraordinary Expenses of the Trustee as defined in the Indenture) incurred in the collection of such gross proceeds;
"Notes" means those unpaid and outstanding industrial development notes issued by the Board, pursuant to resolutions of the Board to finance the costs of the Project;
The term "payment in full of the Bonds" specifically encompasses the situations described in Article X of the Indenture;
"Permitted Encumbrances" means, as of any particular time,
(a) liens for ad valorem taxes, special assessments or other governmental charges not then delinquent or permitted to exist as provided in Section 6.3;
(b) this Agreement and the security interests created herein;
(c) such utility, access or other easements and rights-of-way, restrictions, reservations, reversions and exceptions as the Authorized Company Representative certifies will not materially interfere with or impair the operation of the Project (or, if it is not being
operated, the operations for which it was designed or last modified);
(d) unfiled and inchoate mechanics' and materialmen's liens for construction work in progress;
(e) mechanics', materialmen's, suppliers' and vendors' liens or other
similar liens not then payable, and those permitted to exist as provided in
Section 6.1;
(f) such minor defects, irregularities, encumbrances, easements, rights-of-ways and clouds on title as the Authorized Company Representative certifies do not, in the aggregate, materially impair the property affected thereby for the purpose for which it was acquired or is held by the Board or the Company;
(g) that certain Lease Agreement dated as of July 1, 1977 between the Board and Georgia Kraft Company, as amended in an Agreement of Assignment of Lease dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(h) that certain Mortgage and Indenture of Trust dated as of July 1, 1977 between the Board and The First National Bank of Chicago, as trustee, as the same may be amended and supplemented from time to time;
(i) that certain Lease Agreement dated as of July 1, 1980 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(j) that certain Lease Agreement dated as of November 1, 1983 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(k) that certain Lease Agreement dated as of December 1, 1983 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft and the Company; and
(l) that certain Lease Agreement dated as of December 1, 1988 between the Company and the Board
executed in connection with certain Environmental Improvement Revenue Bonds of the Board, Series 1988;
The term "person" means natural persons, firms, associations, corporations and public bodies;
"Project" means the Project Land and the Project Facilities, as they may at any time exist;
"Project Facilities" means the facilities acquired, constructed and installed with proceeds from the sale of the Notes, to the extent such Notes are refunded from the proceeds of the sale of the Bonds, as they may at any time exist. The Project Facilities are more fully described in the Project Summary;
"Project Fund" means the fund created pursuant to Section 601 of the Indenture;
"Project Land" means the real property described in Exhibit "A" attached hereto and by this reference made a part hereof, less such real property as may be released from this Agreement pursuant to Section 8.6 or taken by the exercise of the power of eminent domain as provided in Section 7.2;
"Project Summary" means the Project Summary prepared by the Company, entitled "PROJECT SUMMARY - INDUSTRIAL FACILITIES - MEAD COATED BOARD, INC. COATED LINERBOARD MILL", a copy of which is attached hereto as "Exhibit "B" and by this reference made a part hereof, including any amendments thereto made pursuant to the terms thereof;
The term "security interest" or "security interests" shall refer to the security interests created herein and in the Indenture and shall have the meaning set forth in the Uniform Commercial Code of the State;
"State" means the State of Alabama;
"Trustee" means AmSouth Bank N.A., or any co-trustee or any successor trustee under the Indenture.
(a) "Herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words
refer to this Agreement and not solely to the particular Article, Section or subdivision hereof in which such word is used.
(b) Words importing the singular number shall include the plural number and vice versa, and any pronoun used herein shall be deemed to cover all genders.
(c) All references herein to particular Articles or Sections are references to Articles or Sections of this Agreement.
duly organized and validly existing under the provisions of the Act by authority of a resolution adopted by the Board of Commissioners of the City on June 14, 1960 and a Certificate of Incorporation duly filed for record on October 17, 1960, in the office of the Judge of Probate of Russell County, Alabama, which Certificate of Incorporation has not been amended or been revoked and is of full force and effect. The Board has all requisite power and authority under the Act (1) to issue the Bonds, (2) to use the proceeds thereof to refund the Notes issued to pay the cost to acquire, construct and install the Project Facilities, (3) to own, lease, encumber and dispose of the Project, and (4) to enter into, and perform its obligations under, the Indenture and this Agreement. This Agreement and the Indenture have been duly authorized, executed and delivered by the Board and are legal, valid and binding agreements enforceable against the Board in accordance with their respective terms.
which adversely affect the validity or enforceability of the Bonds, the Indenture, this Agreement, or any agreement or instrument to which the Board is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby.
Agreement, the Indenture and the financing statements covering the security interests created hereunder and under the Indenture. The Board has filed the notification referred to in (i) of the preceding sentence and the Director of the Alabama Securities Commission has issued a Certificate of Notification applicable to the Bonds, which Certificate of notification has not been revoked or rescinded and is in full force and effect.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate
power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (ii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Agreement and to perform all of its obligations hereunder and thereunder.
(c) The willingness of the Board to issue the Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Project will create or preserve jobs and employment opportunities within the boundaries of the State of Alabama, thereby improving the economic welfare of the State of Alabama and the City.
(e) The acquisition, construction, and installation of the Project was not commenced, and no item which constitutes a part of the Project was ordered, prior to November 3, 1987.
(f) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Agreement, or performing any of its obligations hereunder; and the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(g) The acquisition, construction, and installation of the Project will comply in all material respects with all applicable zoning, planning, building, environmental and other regulations of the governmental authorities having jurisdiction of the Project, and all necessary permits, licenses, consents and permissions necessary for the Project have been or will be obtained.
(h) The acquisition, construction, and installation of the Project as well as its intended use and operation are in complete conformance with the purposes and provisions of the Act.
(i) No event has occurred and no condition exists that would constitute an "Event of Default" under this Agreement which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under this Agreement.
(j) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Agreement.
The Board agrees that it will enter into, or accept the assignment of, such contracts as the Company may request in order to effectuate the purposes of this Section but that it will not execute any other contract or give any order for construction or for the acquisition and installation of any equipment relating to the Project Facilities, unless and until the Authorized Company Representative shall have approved the same in writing.
The Board hereby makes, constitutes and appoints the Company, The Mead Corporation and Rust International Corporation as its true, lawful and agents for the acquisition, construction and installation of the Project Facilities, and the Company, The Mead Corporation and Rust International Corporation have accepted such agency to act and do all things on behalf of the Board, to perform all acts and agreements of the Board hereinbefore provided in this Section, and to bring any actions or proceedings against any person which the Board might bring with respect thereto as the Company, The Mead Corporation and Rust International Corporation shall deem proper. The Board hereby ratifies and confirms all actions of, and assumes and adopts all contracts entered into by, the Company, The Mead Corporation and Rust International Corporation with respect to the Project Facilities prior to the date hereof. This appointment of the Company, The Mead Corporation and Rust International Corporation to act as agents and all authority hereby conferred or granted is conferred and granted irrevocably until all activities in connection with the acquisition, construction and installation of the Project Facilities shall have been completed, and shall not be terminated prior thereto by act of the Board or of the Company, The Mead Corporation and Rust International Corporation. So long as the Company is not in default hereunder, upon the completion of the Project (or at any time prior or subsequent thereto upon the request of the Company) the Board will assign to the Company all warranties and guarantees of all contractors, subcontractors, suppliers, architects and engineers for the
furnishing of labor, materials or equipment or supervision or design in connection with the Project Facilities and any rights or causes of action arising from or against any of the foregoing.
subcontractor or surety which the Company deems reasonably necessary, and in such event the Board agrees to cooperate fully with the Company and to take all action necessary, to the extent it might lawfully do so, to effect the substitution of the Company for the Board in any such action or proceeding. Any moneys recovered by way of damages, refunds, adjustments or otherwise in connection with the foregoing shall be paid to the Bond Fund.
of Section 8.2) on the Completion Date and the Company agrees to accept possession of the Project upon such delivery; provided, however, that the Company shall be permitted such possession of the Project prior to the Completion Date as shall not interfere with the acquisition, construction and installation of the Project Facilities.
Anything herein to the contrary notwithstanding, any amount of money at any time held by the Trustee in the Bond Fund shall be credited against the next succeeding payment of rent and shall reduce the payment to be then made by the Company; and further, if, and for so long as, the amount held by the Trustee in the Bond Fund should be sufficient to pay at the times required the principal of and the interest on all Bonds then remaining unpaid, the Company shall not be obligated to make any further rental payments under the provisions of this Section.
The Company agrees to pay to the Trustee until the principal of and the interest on the Bonds shall have been paid in full (i) an amount equal to the annual fee of the Trustee for the Ordinary Services of the Trustee rendered and its Ordinary Expenses incurred under the Indenture, (ii) the reasonable fees and charges of the Trustee and any other paying agent for acting as paying agent and as bond registrar and the reasonable fees of Trustee's counsel as provided in the Indenture, as and when the same become due, and (iii) the reasonable fees and charges of the Trustee for Extraordinary Services rendered by it and Extraordinary Expenses incurred by it, as such terms are defined in the Indenture, as and when the same become due; provided, that the Company may, without precipitating an Event of Default hereunder, withhold such payment to contest in good faith the necessity for any such Extraordinary Services and Extraordinary Expenses and the reasonableness of any such fees, charges or expenses.
If the Company should fail to make any of the payments required in this Section, the item or installment which the Company has failed to make shall continue as an obligation of the Company until the same shall have been fully paid, and the Company agrees to pay the same (in the case of interest, to the extent permitted by law) with interest thereon at the rate per annum equal to one percent per annum over the applicable interest rate borne by the Bonds, calculated as described in the Indenture. The provisions of this Section shall be subject to the provisions of Section 9.6.
fail to perform any such agreement, the Company may institute such action against the Board as the Company may deem necessary to compel performance or recover its damages for nonperformance so long as such action shall not do violence to the agreements on the part of the Company contained in the preceding sentence. The Company may, however, at its own cost and expense and in its own name or in the name of the Board, prosecute or defend any action or proceeding or take any other action involving third persons which the Company deems reasonably necessary in order to insure the completion of the acquisition, construction and installation of the Project Facilities or to secure or protect its right of possession, occupancy and use of the Project hereunder, and in such event the Board hereby agrees to cooperate fully with the Company and to take all lawful action which is required to effect the substitution of the Company for the Board in any such action or proceeding if the Company shall so request.
Nothing contained herein shall be construed to be a waiver of any rights which the Company may have against the Board under this Agreement, or against other persons under this Agreement, the Indenture, or otherwise, or under any provision of law.
(b) The Company may from time to time, in its sole discretion and at its own expense, make any additions, modifications or improvements to the Project Facilities, including installation of additional machinery, equipment, and related property that do not impair the
effective use of the Project Facilities. All machinery, equipment and related personal property so installed by the Company shall not be subject to this Agreement but shall be subject to the Landlord's Lien created under the Code of Alabama 1975, Section 35-9-60. All such machinery, equipment and related personal property may be modified or removed at any time while there exists no event of default hereunder; provided, that any damage to the Project Facilities occasioned by such modification or removal shall be repaired by the Company at its own expense.
(c) The Company shall not permit any mechanics', materialmen's, suppliers', vendors' or other similar liens to be established or remain against the Project for labor or materials furnished or services rendered in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that if the Company shall first notify the Trustee of its intention so to do, the Company may in good faith contest any mechanics', materialmen's, suppliers', vendors' or other similar liens filed or established against the Project, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the Board of the Trustee shall notify the Company that by nonpayment of any such items the lien or security interests afforded by this Agreement or the Indenture as to any part of the Project or the rents, payments and revenues from the Project will be materially endangered or the Project or any part thereof or the rents, payments and revenues from the Project will be subject to loss or forfeiture, in which event the Company shall promptly pay and cause to be satisfied and discharged all such unpaid items. The Board will cooperate fully with the Company in any such contest.
Trustee therefor, provided that such removal does not impair the operation of the Project Facilities.
The removal of any portion of the Project Facilities pursuant to the provisions of this Section shall not entitle the Company to any diminution in or postponement or abatement of the rents payable under Section 5.3.
The Company shall promptly report to the Trustee each such removal, substitution, sale, trade-in or other disposition.
(a) upon or with respect to, or shall be or become liens upon, the Project or any portion thereof or any interest of the Board or the Company therein or under this Agreement;
(b) upon or with respect to the income or profits of the Board from the Project or under this Agreement;
(c) upon or with respect to the possession, operation, management, maintenance, alterations, repair, rebuilding, use or occupancy of the Project or any portion thereof; or
(d) upon this transaction or any document to which the Board or the Company is a party creating or transferring an interest or an estate in the Project;
under or by virtue of any present or future law, statute, ordinance, regulation or other requirement of any governmental authority, whether federal, state, county, city, municipal, school or otherwise.
The Company also agrees to pay any special assessments for public improvements or benefits for which the Company would have otherwise have been liable had it in fact been the owner of the Project.
The Company shall, at its sole cost and expense, procure or cause to be procured any and all necessary building permits, other permits, licenses and other authorizations required for the lawful and proper construction, use, occupation, operation and management of the Project. The Company also agrees to pay or cause to be paid all lawful charges for gas, water, sewer, electricity, light, heat, power, telephone and other utility and service used, rendered or supplied to, upon or in connection with the Project and the Board will cooperate with the Company in securing such permits, licenses and authorizations.
The Company may, at its own expense and in its own name and behalf or in the name and behalf of the Board, in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assessments and other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Board or the Trustee shall notify the Company that by nonpayment of any such items the lien or security interests afforded by this Agreement or the Indenture as to any part of the Project or the rents, payments and revenues derived from the Project will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event such taxes, assessments or charges shall be paid promptly. The Board shall cooperate fully with the Company in any such contest. If the Company shall fail to pay any of the foregoing items required by this Section to be paid by the Company and shall not cure any failure within any applicable curative provisions provided herein, the Board or the Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Board or the Trustee shall become an additional obligation of the Company to the one making the advancement, which amounts, together with interest thereon at the rate of interest borne by the Bonds from the date thereof, the Company agrees to pay.
Issuer hereunder, (c) any breach or default on the part of the Company in the performance of any of its obligations hereunder, (d) any act of negligence of the Company or of its agents, contractors, servants, employees or licensees, (e) any act of negligence of any assignee or sublessee of the Company, or of any agents, contractors, servants, employees or licensees of any assignee or sublessee of the Company and (f) any and all liability, damages, costs and expenses arising out of or resulting from the acquisition, construction and installation of the Project or the use or operation of the Project or any other activity carried out thereon or in connection therewith or the transactions contemplated by this Agreement and the Indenture, including the reasonable fees and expenses of counsel, except as the same may arise out of the negligence or misconduct on the part of the Issuer. If any such lien or charge is sought to be imposed upon payments, or any such taxes, assessments, impositions or other charges are sought to be imposed, or any such liability, damages, costs and expenses are sought to be imposed, the Issuer will give prompt notice to the Company, and the Company shall have the sole right and duty to assume, and will assume, the defense thereof, with full power to litigate, compromise or settle the same in its sole discretion. The indemnification provided by the Section shall survive the termination of this Agreement.
The Company agrees to indemnify the Trustee, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the Indenture, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties thereunder or hereunder.
(a) the restoration of the Project to substantially the same condition as existed prior to the exercise of such power of eminent domain;
(b) the acquisition, by construction or otherwise, of other industrial facilities suitable for the Company's operations at the Project (which facilities will be deemed a part of the Project and available for
use and occupancy by the Company and will be leased to the Company hereunder without the payment of any rents other than herein provided to the same extent as if such other improvements were specifically described herein); provided, that such facilities will be acquired subject to no liens, security interests or encumbrances prior to the lien afforded by this Agreement and the Indenture, other than Permitted Encumbrances; or
(c) payment into the Bond Fund to provide for payment in full of the Bonds at the earliest date that the Bonds may be called for redemption.
The Board shall cooperate fully with the Company in the handling and conduct of any prospective or pending eminent domain proceeding with respect to the Project or any part thereof and shall, to the extent it may lawfully do so, permit the Company to litigate in any such proceeding in the name and on behalf of the Board. In no event will the Board voluntarily settle, or consent to the settlement of, any prospective or pending eminent domain proceeding with respect to the Project or any part thereof without the written consent of the Company.
liable for and agrees to hold the Board harmless against, any loss that may be occasioned by any cause whatsoever pertaining to the Project or the use thereof.
(a) a copy of such amendment as executed;
(b) a resolution of the Board (i) stating that the Board is not in default under any of the provisions hereof or of the Indenture and that the Company is not to the knowledge of the Board in default under any of the provisions hereof, (ii) giving an adequate legal description of that portion of the Project Land to be released, (iii) stating the purpose for which the Board desires the release, (iv) stating that the improvements which will be constructed or the facilities and services which will be provided, increased or improved will be such as will promote at least one of the public purposes of the Board, and (v) requesting such release;
(c) a certificate of the president or any vice president of the Company indicating approval of such amendment and stating that the Company is not in default under any of the provisions hereof;
(d) a copy of the agreement between the Board and such other person wherein the Board agrees to construct improvements on the portion of the Project Land so requested to be released and agrees to lease or sell the same to such other person, and wherein such other person agrees to lease or purchase the same from the Board, or a copy of the instrument granting the easement or conveying the title or other interest to a railroad, public utility or public body; and
(e) a certificate of the Authorized Company Representative, dated not more than 60 days prior to the date of such amendment and stating that (i) the portion of the Project Land so proposed to be released is necessary or desirable for railroad, utility services or roads to benefit the Project or is not otherwise needed for the operation of the Project Facilities for the purposes hereinabove stated, and (ii) the release so proposed to be made will not impair the usefulness of the Project Facilities and will not destroy the means of ingress thereto and egress therefrom.
No release effected under this Section shall entitle the Company to any diminution in or postponement or abatement of the rents payable under Section 5.3.
(a) no assignment (other than pursuant to Section 8.3) or sublease shall relieve the Company from primary liability for any of its obligations hereunder, and if any such assignment occurs, the Company shall continue to remain primarily liable for payment of the rents specified in Section 5.3 and for performance and observance of the other agreements on its part herein provided to be performed and observed by it; and
(b) the Company shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Board and to the Trustee a true and complete copy of each such assignment or sublease, as the case may be, together with any instrument of assumption.
public corporation whose property and income are not subject to taxation and
which has corporate authority to carry on the business of owning and leasing the
Project; provided (a) that no such action shall be taken without the prior
written consent of the Company, unless such action shall be required by law, and
(b) that upon any such consolidation, merger or transfer, the due and punctual
payment of the principal of and the interest on the Bonds, and the due and
punctual performance and observance of all the agreements hereof to be kept and
performed by the Board, shall be expressly assumed in writing by the corporation
resulting from such consolidation or surviving such merger or to which the
Project shall be transferred as an entirety.
(a) Failure by the Company to make any payment required under Section 5.3 on or before the date that the payment is due and continuance of such failure for ten Business Days after receipt of notice of such failure from the Trustee.
(b) Failure by the Company to observe and perform any other covenant, condition or agreement on its part under this Agreement (other than as referred to in subsection (a) of this Section), for a period of ninety (90) days after written notice, specifying such failure and requesting that it be remedied, shall be given to the Company by the Trustee, unless the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be remedied within the applicable period, the Board and the Trustee will not unreasonably withhold their consent to an extension of such time if it is possible to correct such failure and corrective action is instituted by the Company within the applicable period and diligently pursued until the default is corrected;
(c) Any warranty, representation or other statement by or on behalf of the Company contained in this Agreement, or any instrument furnished in compliance with or in reference to this Agreement or the Indenture, is false or misleading in any material respect; or
(d) The dissolution or liquidation of the Company or the filing by the Company of a voluntary petition in bankruptcy, or the commission by the Company of any act of bankruptcy, or adjudication of the Company as a bankrupt, or assignment by the Company for the benefit of its creditors, or the entry by the Company into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Company in any proceeding for its reorganization instituted under the provisions of the Federal bankruptcy statutes, as amended, or under any similar act which may hereafter be enacted. The term "dissolution or liquidation of the Company", as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Company resulting from a merger or consolidation of the Company into or with another corporation or a dissolution or liquidation of the Company following a transfer of all or substantially all of its assets as an entirety.
(a) The Trustee may, and upon the written request of the holders of
not less than twenty-five percent (25%) in outstanding principal amount of
the Bonds, shall by notice in writing delivered to the Company, declare all
installments of rent payable under Section 5.3 for the remainder of the
Lease Term to be immediately due and payable. Upon such acceleration, the
amount then due and payable by the Company as accelerated rent shall be the
sum required to provide for payment in full of the Bonds on the earliest
possible date on which such payment can be made. Such sums as may then
become payable shall be paid into the Bond Fund and after payment in full
of the Bonds and payment of any cost occasioned by such Event of Default,
any excess moneys in the Bond Fund shall be returned to the Company as an
overpayment of rent. Notwithstanding the foregoing, upon the occurrence of
an Event of Default by reason of the occurrence of any event specified for
Section 10.1(d), all installments of rent payable under Section 5.3 for the
remainder of the Lease Term shall automatically become and be immediately
due and payable
without any action by the Trustee or the Board being necessary.
(b) The Trustee may take whatever action at law or in equity may appear necessary or desirable to collect the rents and any other payments then due and thereafter to become due, or to enforce performance and observance of any covenant, condition or agreement of the Company hereunder;
(c) The Trustee may exercise any remedies provided for in the Indenture and, with respect to any security interest, the rights of a secured party under the Uniform Commercial Code of the State.
Any amounts collected pursuant to action taken under this Section shall be paid into the Bond Fund and applied in accordance with the provisions of the Indenture or, if payment in full of the Bonds has been made, shall be paid to the Company.
The Company shall have the option to purchase the Project at any time, in the event that the Indenture is discharged pursuant to Article IX of the Indenture, by the Company (i) depositing irrevocably with the Trustee either moneys in an amount which shall be sufficient, or Government Obligations the principal of and interest on which when due will provide moneys which, together with the moneys, if any, deposited with or held by the Trustee at the same time and available for such purpose shall be sufficient pursuant to the Indenture, to pay the principal of and interest on all of the Bonds due and to become due on or prior to the redemption date (if the Bonds are to be redeemed) or maturity thereof; (ii) paying to the trustee all Trustee's fees and expenses due in connection with the payment or redemption of any such Bonds, and, (iii) if any Bonds are to be redeemed on any date prior to their maturity, giving the Trustee irrevocable instructions to redeem such Bonds on such date and either evidence satisfactory to the Trustee that all redemption notices required by the Indenture have been given or irrevocable power authorizing the Trustee to give such redemption notices.
(a) If to the Board - The Industrial Development
Board of the City of
Phenix City, Alabama
c/o Smith & Smith
1503 Broad Street
Phenix City, Alabama 36867
Attention: Sydney S. Smith, Esq.
(b) If to the Company - Mead Coated Board, Inc. Mead World Headquarters Dayton, Ohio 45463 Attention: Treasurer
with a copy to:
Smith & Schnacke A Legal Professional Association 2900 DuBois Tower Cincinnati, Ohio 45202 Attention: Robert A. Selak
(c) If to the Trustee - AmSouth Bank N.A.
1900 Fifth Avenue North
Birmingham, Alabama 35203
Attention: Corporate Trust
Department
A duplicate copy of each notice, certificate or other communication given hereunder by either the Board, the Company or the Trustee to any one of the others shall also be given to all of the others. The Board, the Company and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.
Company and their respective successors and assigns. To the extent provided herein and in the Indenture, the Trustee and the holders of the Bonds shall be deemed to be third party beneficiaries hereof, but nothing herein contained shall be deemed to create any right in, or to be for the benefit of, any other person not a party hereto.
abatement, deduction or set-off other than those herein expressly provided.
IN WITNESS WHEREOF, the Board and the Company have caused this Agreement to be executed in their respective corporate names as of the date first above written.
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF PHENIX CITY, ALABAMA
By: /s/ Kenneth A. Roberts ------------------------------------ Title: Chairman |
MEAD COATED BOARD, INC.
By: /s/ W. D. Bloebaum, Jr. ------------------------------------ Title: Treasurer |
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this 20th day of December, 1988.
/s/ Sydney S. Smith ------------------------------------ Notary Public |
(SEAL)
My commission expires: 2/25/92
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, Robert A. Selak, A Notary Public in and for said County in said State, hereby certify that W. D. Bloebaum, Jr., whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he or she, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 22nd day of December, 1988.
/s/ Robert A. Selak --------------------------------- Notary Public |
(SEAL)
My commission expires:__________
ROBERT A. SELAK, Attorney at Law
Notary Public, State of Ohio
My Commission has no expiration date.
Section 147.03 O. R. C.
EXHIBIT "A"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of December 1, 1988
The Project Land includes the following property:
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63(degree) 51' 31" E, 790.90' to the point of beginning; thence N 90(degree) 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90(degree) 00' W, 232.22'; thence S 15(degree) 17' 15" E, 479.72' to a point on the northmost side of a rectangular area (Chip Screen House) which parallels last said course and is 75.0' north to south (7.00' of which is west of last said course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56 + acres;
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 45(degree) 24' 34" E, 692.79' to the point of beginning; thence S 36(degree) 51' 02" E, 454.94' to the point of ending; said land being 0.29 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 71(degree) 34' 06" E, 600.24' to the point of beginning; thence S 71(degree) 04' 32" E, 640.91'; thence N 50(degree) 08' 32" E, 61.59' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S 48(degree) 21' 59" W, 84.29' to the point of beginning; thence S 56(degree) 07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a radius of 15.00' and a central angle of 360(degree) 00' bounded by a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus or minus) North-South; thence N 82 (degree) 51' 32" E, 355.48' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 48(degree) 06' 06" W, 35.94' to the point of beginning (N 792,374.0, E 234,473.25); thence S 0(degree) 00' W, 133.50'; thence N 90(degree) 00' W, 103.39'; thence S 0(degree) 00' W, 103.50'; thence 90(degree) 00' W, 48.00'; thence N 0(degree) 00' W, 55.75'; thence N 90(degree) 00' W, 80.00'; thence S 0(degree) 00' W, 42.75'; thence N 90(degree) 00' W, 63.00'; thence N 0(degree) 00' W, 110.00'; thence N 45(degree) 00' E, 55.00'; thence N 0(degree) 00' W, 23.11'; thence N 90(degree) 00' E, 23.00'; thence N 0(degree) 00' W, 23.25'; thence N 90(degree) 00' E, 170.00'; thence N 0(degree) 00' W, 28.75'; thence N 90(degree) 00' E, 62.50' to the point of beginning; said area being 1.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48(degree) 46' 07" W, 591.71' to the point of beginning (N 791,960.0 E 234,055.0); thence S 0(degree) 00' W, 170.00'; thence N 90(degree) 00' W, 111.00; thence N 0(degree) 00' W, 170.00'; thence N 90(degree) 00' E, 111.00' to the point of beginning; said land being 0.43 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63(degree) 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90(degree) 00" E, 20.00'; thence S 0(degree) 00' W, 30.00'; thence N 90(degree) 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; thence N 80(degrees)
22' 54" E, 879.79' to the point of beginning; thence N 0(degrees) 00' W,
326.00'; thence N 90(degrees) 00' E, 711.08'; thence S 0(degrees) 00' W,
326.00'; thence N 90(degrees) 00' W, 328.00'; thence S 0(degrees) 00' W,
188.00'; thence N 90(degrees) 00' W, 50.00'; thence N 0(degrees) 00' W, 188.00';
thence N 90(degrees) 00' W, 333.08' to the point of beginning; said land being
5.54 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11(degrees) 04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence S 0(degrees) 00" W, 82.00'; thence N 90(degrees) 00" W, 52.00'; thence N 0(degrees) 00' W, 82.00'; thence N 90(degrees) 00' E, 52.00 to the point of beginning; said land being 0.10 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02,
of the West Zone of the State of Georgia Coordinate System; thence N
70(degrees) 51' 29" E, 267.79' to the point of beginning (793,238.0 E 233,503.
0); thence N 90(degrees)
00' E, 399.23'; thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' E,
45.00'; thence S 0(degrees) 00' W, 78.00'; thence N 90(degrees) 00' W, 444.23';
thence N 0(degrees) 00' W, 128.00' to the point of beginning; said land being
1.25 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N 0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N 0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S 0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S 0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N 0(degrees) 00' W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N 00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N 90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N 0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02,
of the West Zone of the State of Georgia Coordinate System; thence S 62(degrees)
01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence
N 90(degrees) 00' E, 246.67'; thence along an arc South and East 53.41' having a
radius of 34.00' with a central angle of 90(degrees) 00'; thence S 0(degrees)
00' W, 135.33'; thence along an arc South and West 53.41' having a radius of
34.00' with a central angle of 90(degrees) 00'; thence N 90(degrees) 00' W,
34.00'; thence N 0(degrees) 00' W, 99.79'; thence N 90(degrees) 00' W, 69.00';
thence N 59(degrees) 47' 19" W, 91.42'; thence N 90(degrees) 00' W, 64.67';
thence N 0(degrees) 00' W, 57.54' to the point of beginning; said land being
0.72 (plus or minus) acres;
(collectively, the "Unimproved Land"); less, in each case, any structures constructed and leased pursuant to a Lease Agreement dated July 1, 1977, and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977 Lease") under which Lessor leased to Georgia Kraft Company ("Georgia Kraft") a parcel of land in Russell County, Alabama as more particularly described in Exhibit A to the Lease (the "1977 Land"), together with certain items of equipment described in Exhibit B to the 1977 Lease (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated Board, Inc.);
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (the 1977 Land less and except the 1988 Land) in order to provide all necessary or convenient ingress or egress between the Unimproved Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Unimproved Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Unimproved Land to the Board Premises, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Unimproved Land and the Project including, without limitation, the right to make connections with machinery,
equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Unimproved Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Unimproved Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Unimproved Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Unimproved Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Unimproved Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Unimproved Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Unimproved Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Unimproved Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Unimproved Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the Unimproved Land in respect of any additional improvements constructed adjacent to the Unimproved Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Unimproved Land.
EXHIBIT "B"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of December 1, 1988
PROJECT SUMMARY - INDUSTRIAL FACILITIES
RUSSELL COUNTY, ALABAMA
The Project in an expansion of an existing coated linerboard mill (the "Mill") in Russell County, Alabama owned by the Board and leased to the Company. The Project consists primarily of a paper machine to product coated linerboard, such machine having an annual production capacity of approximately 400,000 tons of coated linerboard. The Project also includes other related facilities, including an expansion of and additions to the existing wood yard and wood handling equipment; a new bleach plant; a new recovery boiler; and a substantial expansion of the Mill's existing effluent treatment system.
THIS FIRST AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of March 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"), pursuant to a Trust Indenture, dated as of December 1, 1988 (the "Original Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1988A Bonds for use in the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of December 1, 1988 (the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1988A Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in connection with the Project. In that connection, the Board is issuing $43,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series 1989A Bonds"), pursuant to the Indenture as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989 (the "Supplemental Indenture") from the Board to the Trustee. The Original Indenture as supplemented by the Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
Section 1.1 Amendment of Section 5.3 of the Agreement. The term
----------- ----------------------------------------- "Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989A Bonds. Section 1.2 Terms of Agreement Applicable to Series 1989A Bonds. All ----------- --------------------------------------------------- |
terms, conditions, representations and covenants set forth in the Agreement applicable to the Series 1988A Bonds and not specifically otherwise provided for in the Indenture, any supplements thereto or the Agreement, shall apply with full force and effect to the Series 1989A Bonds. Without limiting the foregoing, all references in the Agreement to the "Bonds" shall be deemed to mean the Series 1988A Bonds and the Series 1989A Bonds, including without limitation the provisions of Section 5.3 of the Agreement relating to the payment of rents.
affecting the Board in any court or before any governmental authority or arbitration board or tribunal, which adversely affect the validity or enforceability of the Series 1989A Bonds, the Indenture, the Agreement, this Amendment, or any agreement or instrument to which the Board is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby.
Notification as may be required by said Act, and (ii) the due filing and recording of this Amendment, the Supplemental Indenture and the financing statements covering the security interests created hereunder and under the Indenture. The Board has filed the notification referred to in (i) of the preceding sentence and the Director of the Alabama Securities Commission has issued a Certificate of Notification applicable to the Series 1989A Bonds, which Certificate of notification has not been revoked or rescinded and is in full force and effect.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (ii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1989A Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of this Amendment, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this
Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has no failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
MEAD COATED BOARD, INC.
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this 24th day of February, 1989.
/s/ Sydney S Smith ------------------- Notary Public |
(SEAL)
My commission expires: 2/25/92
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, ____________________, A Notary Public in and for said County in said State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 1st day of March, 1989.
/s/ Charity K. Burgess ------------------------- Notary Public |
(SEAL)
My commission expires: July 29, 1989
EXHIBIT "A"
to
First Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of March 1, 1989
The Project Land includes the following property:
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63 degrees 51' 31" E, 790.90' to the point of beginning; thence N 90 degrees 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90 degrees 00' W, 232.22'; thence S 15 degrees 17' 15" E, 479.72' to a point on the northmost side of a rectangular area (Chip Screen House) which parallels last said course and is 75.0' north to south (7.00' of which is west of last said course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56+ acres;
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, plus 14 N, R 30 E, County of Russell, State of Alabama; thence N 45 degrees 24' 34" E, 692.79' to the point of beginning; thence S 36 degrees 51' 02" E, 454.94' to the point of ending; said land being 0.29 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 71 degrees 34' 06" E, 600.24' to the point of beginning; thence S 71 degrees 04' 32" E, 640.91'; thence N 50 degrees 08' 32" E, 61.59' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S 48 degrees 21' 59" W, 84.29' to the point of beginning; thence S 56 degrees 07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a radius of 15.00' and a central angle of 360 degrees 00' bounded by a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus or minus) North-South; thence N 82 degrees 51' 32" E, 355.48' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 48 degrees 06' 06" W, 35.94' to the point of beginning (N 792,374.0, E 234,473.25); thence S 0 degrees 00' W, 133.50'; thence N 90 degrees 00' W, 103.39'; thence S 0 degrees 00' W, 103.50'; thence 90 degrees 00' W, 48.00'; thence N 0 degrees 00' W, 55.75'; thence N, 90 degrees 00' W, 80.00'; thence S 0 degrees 00' W, 42.75'; thence, N 90 degrees 00' W, 63.00'; thence N 0 degrees 00' W, 110.00'; thence N 45 degrees 00' E, 55.00'; thence N 0 degrees 00' W, 23.11'; thence N 90 degrees 00' E, 23.00'; thence N 0 degrees 00' W, 23.25'; thence N 90 degrees 00' E, 170.00'; thence N 0 degrees 00' W, 28.75'; thence N 90 degrees 00' E, 62.50' to the point of beginning; said area being 1.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48 degrees 46' 07" W, 591.71' to the point of beginning (N 791,960.0 E 234,055.0); thence S 0 degrees 00' W, 170.00'; thence N 90 degrees 00' W, 111.00; thence N 0 degrees 00' W, 170.00'; thence N 90 degrees 00' E, 111.00' to the point of beginning; said land being 0.43 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63 degrees 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90 degrees 00" E, 20.00'; thence S 0 degrees 00' W, 30.00'; thence N 90 degrees 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00 of the West Zone of the State of Georgia Coordinate System; thence N 80(degrees) 22' 54" E, 879.79' to the point of beginning; thence N 0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' E, 711.08'; thence S 0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' W, 328.00'; thence S 0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 50.00'; thence N 0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 333.08' to the point of beginning; said land being 5.54 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11(degrees) 04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence S 0(degrees) 00" W, 82.00'; thence N 90(degrees) 00" W, 52.00'; thence N 0(degrees) 00' W, 82.00'; thence N 90(degrees) 00' E, 52.00 to the point of beginning; said land being 0.10 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning
(793,238.0 E 233,503.0); thence N 90(degrees)
00' E, 399.23'; thence S 0' 00' W, 50.00'; thence N 90 degrees 00' E, 45.00'; thence S 0 degrees 00' W, 78.00'; thence N 90 degrees 00' W, 444.23'; thence N 0 degrees 00' W, 128.00' to the point of beginning; said land being 1.25 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40 degrees 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90 degrees 00' E, 36.30'; thence N 0 degrees 00' W, 20.50'; thence N 90 degrees 00' E, 72.26'; thence N 0 degrees 00' W, 14.83'; thence N 90 degrees 00' E, 110.50'; thence S 0 degrees 00' W, 42.58'; thence N 90 degrees 00' E, 26.00'; thence S 0' 00' W, 81.00'; thence N 90 degrees 00' W, 51.00'; thence N 0 degrees 00" W, 25.12'; thence N 90 degrees 00' W, 85.50'; thence N 00 degrees 00' W, 8.63'; thence N 90 degrees 00' W, 72.26'; thence N 90 degrees 00' W, 20.50'; thence N 0 degrees 00' W, 36.30'; thence N 0 degrees 00' W, 34.00' to the point of beginning; said land being 0.47 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 62 degrees 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90 degrees 00' E, 246.67'; thence along an arc South and East 53.41' having a radius of 34.00' with a central angle of 90 degrees 00'; thence S 0 degrees 00' W, 135.33'; thence along an arc South and West 53.41' having a radius of 34.00' with a central angle of 90 degrees 00'; thence N 90 degrees 00' W, 34.00'; thence N 0 degrees 00' W, 99.79'; thence N 90 degrees 00' W, 69.00'; thence N 59 degrees 47' 19" W, 91.42'; thence N 90 degrees 00' W, 64.67'; thence N 0 degrees 00' W, 57.54' to the point of beginning; said land being 0.72 (plus or minus) acres;
(collectively, the "Unimproved Land"); less, in each case, any structures constructed and leased pursuant to a Lease Agreement dated July 1, 1977, and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977 Lease") under which Lessor leased to Georgia Kraft Company ("Georgia Kraft") a parcel of land in Russell County, Alabama as more particularly described in Exhibit A to the Lease (the "1977 Land"), together with certain items of equipment described in Exhibit B to the 1977 Lease (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated Board, Inc.);
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (the 1977 Land less and except the 1988 Land) in order to provide all necessary or convenient ingress or egress between the Unimproved Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Unimproved Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Unimproved Land to the Board Premises, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Unimproved Land and the Project including, without limitation, the right to make connections with machinery,
equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Unimproved Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Unimproved Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Unimproved Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Unimproved Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Unimproved Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Unimproved Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Unimproved Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Unimproved Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Unimproved Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the Unimproved Land in respect of any additional improvements constructed adjacent to the Unimproved Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Unimproved Land.
MEAD COATED BOARD, INC., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A of the Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing First Amendment to Lease Agreement, dated as of March 1, 1989, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, between the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as trustee, to consent to the execution and delivery of the same.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of March 1, 1989.
MEAD COATED BOARD, INC.
By: /s/ W. D. Bloebaum, Jr. ------------------------------ Title: |
AMSOUTH BANK N.A., as Trustee under the Trust Indenture, dated as of December 1, 1988, from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing First Amendment to Lease Agreement, dated as of March 1, 1989, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of Trustee to be executed in its name and behalf as of March 1, 1989.
AMSOUTH BANK N.A., as Trustee
By: /s/ T. Franklin Caley ------------------------------ Title: Vice President and Corporate Trust Officer |
THIS SECOND AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of April 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"), and $43,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series 1989A Bonds") pursuant to a Trust Indenture, dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989 (collectively, the "Indenture") from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1988A Bonds and the Series 1989A Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of December 1, 1988, as amended by the First Amendment To Lease Agreement dated as of March 1, 1989 (collectively, the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1988A Bonds and the Series 1989A Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in connection with the Project. In that connection, the Board is issuing $45,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B Bonds"), pursuant to the Indenture as supplemented by a Second Supplemental Trust Indenture dated as of April 1, 1989 (the "Second Supplemental Indenture") from the Board to the Trustee. The Indenture as supplemented by the Second Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
Section 1.1 Amendment of Section 5.3 of the Agreement. The term
----------- ----------------------------------------- "Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989B Bonds. Section 1.2 Terms of Agreement Applicable to Series 1989B Bonds. All ----------- --------------------------------------------------- |
terms, conditions, representations and covenants set forth in the Agreement applicable to the Series 1988A Bonds and not specifically otherwise provided for in the Indenture, any supplements thereto or the Agreement, shall apply with full force and effect to the Series 1989B Bonds. Without limiting the foregoing, all references in the Agreement to the "Bonds" shall be deemed to mean the Series 1988A Bonds, the Series 1989A Bonds and the Series 1989B Bonds, including without limitation the provisions of Section 5.3 of the Agreement relating to the payment of rents.
which Certificate of Incorporation has not been amended or been revoked and is of full force and effect. The Board has all requisite power and authority under the Act (1) to issue the Series 1989B Bonds, (2) to use the proceeds thereof to refund the Notes issued to pay the cost to acquire, construct and install the Project, (3) to own, lease, encumber and dispose of the Project, and (4) to enter into, and perform its obligations under, the Indenture, the Agreement and this Amendment. This Amendment and the Second Supplemental Indenture have been duly authorized, executed and delivered by the Board and are legal, valid and binding agreements enforceable against the Board in accordance with their respective terms.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (ii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1989B Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of this Amendment, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
By: /s/ Kenneth A. Roberts ---------------------------------- Chairman |
MEAD COATED BOARD, INC.
By: /s/ W. D. Bloebaum, Jr. ---------------------------------- Title: Treasurer |
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
/s/ Sydney S. Smith ----------------------------------- Notary Public |
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, Jeffrey L. Hayman, Notary Public in and for said County in said State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this ______ day of April ___, 1989.
/s/ Jeffrey L. Hayman --------------------- Notary Public |
My commission expires:_____
(SEAL)
EXHIBIT "A"
to
Second Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of April 1, 1989
The Project Land includes the following property:
CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513)
---------------------------------------------,
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63 degrees 51' 31" E, 790.90' to the point of beginning; thence N 90 degrees 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90 degrees 00' W, 232.22'; thence S 15 degrees 17' 15" E, 479.72' to a point on the northmost side of a rectangular area (Chip Screen House) which parallels last said course and is 75.0' north to south (7.00' of which is west of last said course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56+ acres;
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 45 degrees 24' 34" E, 692.79' to the point of beginning; thence S 36(degrees) 51' 02" E, 454.94' to the point of ending; said land being 0.29(plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 71(degrees) 34' 06" E, 600.24' to the point of beginning; thence S 71(degrees) 04' 32" E, 640.91' thence N 50(degrees) 08' 32" E, 61.59' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S 56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus or minus) North-South; thence N 82(degrees) 51' 32" E, 355.48' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 48(degrees) 06' 06" W, 35.94' to the point of beginning (N 792,374.0, E 234,473.25); thence S 0(degrees) 00' W, 133.50'; thence N 90(degrees) 00' W, 103.39'; thence S 0(degrees) 00' W, 103.50'; thence 90(degrees) 00' W, 48.00'; thence N 0(degrees) 00' W, 55.75'; thence N 90(degrees) 00' W, 80.00'; thence S 0(degrees) 00' W, 42.75'; thence N 90(degrees) 00' W. 63.00'; thence N 0(degrees) 00' W, 110.00'; thence N 45(degrees) 00' E, 55.00'; thence N 0(degrees) 00' W, 23.11'; thence N 90(degrees) 00' E, 23.00'; thence N 0(degrees) 00' W, 23.25'; thence N 90(degrees) 00' E, 170.00'; thence N 0(degrees) 00' W, 28.75'; thence N 90(degrees) 00' E, 62.50' to the point of beginning; said area being 1.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48(degrees) 46' 07" W, 591.71' to the point of beginning (N 791,960.0 E 234,055.0); thence S 0(degrees) 00' W, 170.00'; thence N 90(degrees) 00' W, 111.00; thence N 0(degrees) 00' W, 170.00'; thence N 90(degrees) 00' E, 111.00' to the point of beginning; said land being 0.43 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63(degrees) 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90(degrees) 00" E, 20.00'; thence S 0(degrees) 00' W, 30.00'; thence N 90(degrees) 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 80 degrees 22' 54" E, 879.79' to the point of beginning; thence N 0 degrees 00' W, 326.00'; thence N 90 degrees 00' E, 711.08'; thence S 0 degrees 00' W, 326.00'; thence N 90 degrees 00' W, 328.00'; thence S 0 degrees 00' W, 188.00'; thence N 90 degrees 00' W, 50.00'; thence N 0 degrees 00' W, 188.00'; thence N 90 degrees 00' W, 333.08' to the point of beginning; said land being 5.54 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11 degrees 04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence S 0 degrees 00" W, 82.00'; thence N 90 degrees 00" W, 52.00'; thence N 0 degrees 00' W, 82.00'; thence N 90 degrees 00' E, 52.00 to the point of beginning; said land being 0.10 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence N 70 degrees 51' 29" E, 267.79' to the point of beginning (793,238.0 E 233,503.0); thence N 90 degrees
00' E, 399.23'; thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' E, 45.00'; thence S 0(degrees) 00' W, 78.00'; thence N 90(degrees) 00' W, 444.23'; thence N 0(degrees) 00' W, 128.00' to the point of beginning; said land being 1.25 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N 0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N 0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S 0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S 0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N 0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N 00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N 90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N 0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along an arc South and East 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence S 0(degrees) 00' W, 135.33'; thence along an arc South and West 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence N 90(degrees) 00' W, 34.00'; thence N 0(degrees) 00' W, 99.79'; thence N 90(degrees) 00' W, 69.00'; thence N 59(degrees) 47' 19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00' W, 57.54' to the point of beginning; said land being 0.72 (plus or minus) acres;
(collectively, the "Unimproved Land"); less, in each case, any structures constructed and leased pursuant to a Lease Agreement dated July 1, 1977, and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977 Lease") under which Lessor leased to Georgia Kraft Company ("Georgia Kraft") a parcel of land in Russell County, Alabama as more particularly described in Exhibit A to the Lease (the "1977 Land"), together with certain items of equipment described in Exhibit B to the 1977 Lease (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated Board, Inc.);
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (the 1977 Land less and except the 1988 Land) in order to provide all necessary or convenient ingress or egress between the Unimproved Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Unimproved Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Unimproved Land to the Board Premises, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Unimproved Land and the Project including, without limitation, the right to make connections with machinery,
equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Unimproved Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Unimproved Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Unimproved Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Unimproved Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Unimproved Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Unimproved Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Premises in order to permit and faci1itate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Unimproved Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Unimproved Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Unimproved Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the Unimproved Land in respect of any additional improvements constructed adjacent to the Unimproved Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Unimproved Land.
MEAD COATED BOARD, INC., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project) Series 1988A of the Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Second Amendment To Lease Agreement dated as of April 1, 1989, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, between the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as Trustee, to consent to the execution and delivery of the same.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of April 1, 1989.
MEAD COATED BOARD, INC.
AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Second Amendment To Lease Agreement, dated as of March 1, 1989, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of Trustee to be executed in its name and behalf as of April 1, 1989.
AMSOUTH BANK N.A., as Trustee
By: /s/ David E. White -------------------------------- Title: |
THIS THIRD AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of June 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series 1989A Bonds"); and $45,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B Bonds") pursuant to a Trust Indenture, dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989 and a Second Supplemental Trust Indenture dated as of April 1, 1989 (collectively, the "Indenture") from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1988A Bonds, the Series 1989A Bonds and the Series 1989B Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of December 1, 1988, as amended by the First Amendment To Lease Agreement dated as of March 1, 1989 and the Second Amendment To Lease Agreement dated as of April 1, 1989 (collectively, the "Agreement"). The Agreement obligates the
Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1988A Bonds, the Series 1989A Bonds and the Series 1989B Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in connection with the Project. In that connection, the Board is issuing $37,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989C (the "Series 1989C Bonds"), pursuant to the Indenture as supplemented by a Third Supplemental Trust Indenture dated as of June 1, 1989 (the "Third Supplemental Indenture") from the Board to the Trustee. The Indenture as supplemented by the Third Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
Section 1.1 Amendment of Section 5.3 of the Agreement. The term
----------- ----------------------------------------- "Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989C Bonds. Section 1.2 Terms of Agreement Applicable to Series 1989C Bonds. All ----------- --------------------------------------------------- |
terms, conditions, representations and covenants set forth in the Agreement applicable to the Series 1988A Bonds and not specifically otherwise provided for in the Indenture, any supplements thereto or the Agreement, shall apply with full force and effect to the Series 1989C Bonds. Without limiting the foregoing, all references in the Agreement to the "Bonds" shall be deemed to mean the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds and the Series 1989C Bonds including without limitation the provisions of Section 5.3 of the Agreement relating to the payment of rents.
resolution adopted by the Board of Commissioners of the City on June 14, 1960 and a Certificate of Incorporation duly filed for record on October 17, 1960, in the office of the Judge of Probate of Russell County, Alabama, which Certificate of Incorporation has not been amended or been revoked and is of full force and effect. The Board has all requisite power and authority under the Act (1) to issue the Series 1989C Bonds, (2) to use the proceeds thereof to refund the Notes issued to pay the cost to acquire, construct and install the Project, (3) to own, lease, encumber and dispose of the Project, and (4) to enter into, and perform its obligations under, the Indenture, the Agreement and this Amendment. This Amendment and the Third Supplemental Indenture have been duly authorized, executed and delivered by the Board and are legal, valid and binding agreements enforceable against the Board in accordance with their respective terms.
statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Board or any of its activities or properties, and (iii) have been duly authorized by all necessary corporate action on the part of the Board.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its
business as now being conducted and as presently proposed to be conducted, and (iii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1989C Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of this Amendment, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
By: /s/ Kenneth A. Roberts ----------------------------------- Chairman |
MEAD COATED BOARD, INC.
By:__________________________________
Title: Treasurer
THIS FOURTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of July 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series 1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B Bonds"); and $37,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project) Series 1989C (the "Series 1989C Bonds"), pursuant to a Trust Indenture, dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989 and a Third Supplemental Trust Indenture dated as of June 1, 1989 (collectively, the "Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds and the Series 1989C Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant
to a Lease Agreement dated as of December 1, 1988, as amended by the First Amendment To Lease Agreement dated as of March 1, 1989, the Second Amendment To Lease Agreement dated as of April 1, 1989 and the Third Amendment To Lease Agreement dated as of June 1, 1989 (collectively the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds and the Series 1989C Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in connection with the Project. In that connection, the Board is issuing $40,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989D (the "Series 1989D Bonds"), pursuant to the Indenture as supplemented by a Fourth Supplemental Trust Indenture dated as of July 1, 1989 (the "Fourth Supplemental Indenture") from the Board to the Trustee. The Indenture as supplemented by the Fourth Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
Section 1.1 Amendment of Section 5.3 of the Agreement. The term ------------------------------------------------------ "Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989D Bonds. Section 1.2 Terms of Agreement Applicable to Series 1989D Bonds. All ---------------------------------------------------------------- |
terms, conditions, representations and covenants set forth in the Agreement applicable to the Series 1988A Bonds and not specifically otherwise provided for in the Indenture, any supplements thereto or the Agreement, shall apply with full force and effect to the Series 1989D Bonds. Without limiting the foregoing, all references in the Agreement to the "Bonds" shall be deemed to mean the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds and the Series 1989D Bonds, including without limitation the provisions of Section 5.3 of the Agreement relating to the payment of rents.
Encumbrances under the Agreement) upon any property of the Board under the provisions of, its certificate of incorporation or Bylaws, or any indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Board is a party or by which the Board is bound, or any license, judgment, decree, law, statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Board or any of its activities or properties, and (iii) have been duly authorized by all necessary corporate action on the part of the Board.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (iii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1989D Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of this Amendment, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
By:/s/ Kenneth A. Roberts ------------------------------------- Chairman |
MEAD COATED BOARD, INC.
By: /s/ W. D. Bloebaum, Jr. ------------------------------------- Title: Treasurer |
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this 24th day of July, 1989.
/s/ Sydney S. Smith -------------------- Notary Public (SEAL) |
My commission expires: 2/25/92
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, Charity K. Burgess, Notary Public in and for said County in said State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 24th day of July, 1989.
/s/ Charity K. Burgess ---------------------- Notary Public |
(SEAL)
My commission expires: 7/29/89
EXHIBIT "A"
to
Fourth Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of July 1, 1989
The Project Land includes the following property:
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63(degrees) 51' 31" E, 790.90' to the point of beginning; thence N 90(degrees) 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90(degrees) 00' W, 232.22'; thence S 15(degrees) 17' 15" E, 479.72' to a point on the northmost side of a rectangular area (Chip Screen House) which parallels last said course and is 75.0' north to south (7.00' of which is west of last said course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56+ acres;
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R
30 E, County of Russell, State of Alabama; thence N 45(degrees) 24' 34" E, 692.79' to the point of beginning; thence S 36(degrees) 51' 02" E, 454.94' to the point of ending; said land being 0.29+/- acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 71(degrees) 34' 06" E, 600.24' to the point of beginning; thence S 71(degrees) 04' 32" E, 640.91'; thence N 50(degrees) 08' 32" E, 61.59' to the point of ending; said land being 0.45+/- acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S 56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by a rectangular structure 32' -6"+/- East-West and 32' -6"+/- North-South; thence N 82(degrees) 51' 32" E, 355.48' to the point of ending; said land being 0.45+/- acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E
234,500.00, of the West Zone of the State of Georgia Coordinate System;
thence N 48(degrees) 06' 06" W, 35.94' to the point of beginning (N
792,374.0, E 234,473.25); thence S 0(degrees) 00' W, 133.50'; thence N
90(degrees) 00' W, 103.39'; thence S 0(degrees) 00' W, 103.50'; thence
90(degrees) 00' W, 48.00'; thence N 0(degrees) 00' W, 55.75'; thence N
90(degrees) 00' W, 80.00'; thence S 0(degrees) 00' W, 42.75'; thence N
90(degrees) 00' W, 63.00'; thence N 0(degrees) 00' W, 110.00'; thence N
45(degrees) 00' E, 55.00'; thence N 0(degrees) 00' W, 23.11'; thence N
90(degrees) 00' E, 23.00'; thence N 0(degrees) 00' W, 23.25'; thence N
90(degrees) 00' E, 170.00'; thence N 0(degrees) 00' W, 28.75'; thence N
90(degrees) 00' E, 62.50' to the point of beginning; said area being
1.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E
234,500.00, of the West Zone of the State of Georgia Coordinate System;
thence S 48(degrees) 46' 07" W, 591.71' to the point of beginning (N
791,960.0 E 234,055.0); thence S 0(degrees) 00' W, 170.00'; thence N
90(degrees) 00' W, 111.00; thence N 0(degrees) 00' W, 170.00'; thence N
90(degrees) 00' E, 111.00' to the point of beginning; said land being
0.43 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63(degrees) 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90(degrees) 00" E, 20.00'; thence S 0(degrees) 00' W, 30.00'; thence N 90(degrees) 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 80(degrees) 22' 54" E, 879.79' to the point of beginning; thence N 0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' E, 711.08'; thence S 0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' W, 328.00'; thence S 0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 50.00'; thence N 0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 333.08' to the point of beginning; said land being 5.54 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11(degrees) 04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence S 0(degrees) 00" W, 82.00'; thence N 90(degrees) 00" W, 52.00'; thence N 0(degrees) 00' W, 82.00'; thence N 90(degrees) 00' E, 52.00 to the point of beginning; said land being 0.10 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning (793,238.0 E 233,503.0); thence N 90(degrees) 00' E, 399.23'; thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' E, 45.00'; thence S 0(degrees) 00' W, 78.00'; thence N 90(degrees) 00' W, 444.23'; thence N 0(degrees) 00' W, 128.00' to the point of beginning; said land being 1.25 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N 0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N 0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S 0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S 0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N 0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N 00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N 90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N 0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along an arc South and East 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence S 0(degrees) 00' W, 135.33'; thence along an arc South and West 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence N 90(degrees) 00' W, 34.00'; thence N 0(degrees) 00' W, 99.79'; thence N 90(degrees) 00' W, 69.00'; thence N 59(degrees) 47' 19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00' W, 57.54' to the point of beginning; said land being 0.72 (plus or minus) acres;
(collectively, the "Unimproved Land"); less, in each case, any structures constructed and leased pursuant to a Lease Agreement dated July 1, 1977, and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977 Lease") under which Lessor leased to Georgia Kraft Company ("Georgia Kraft") a parcel of land in Russell County, Alabama as more particularly described in Exhibit A to the Lease (the "1977 Land"), together with certain items of equipment described in Exhibit B to the 1977 Lease (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated Board, Inc.);
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (the 1977 Land less and except the 1988 Land) in order to provide all necessary or convenient ingress or egress between the Unimproved Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Unimproved Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Unimproved Land to the Board Premises, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Unimproved Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Unimproved Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Unimproved Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Unimproved Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Unimproved Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Unimproved Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Unimproved Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Unimproved Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Unimproved Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Unimproved Land as long as any such equipment, structures or other improvements remain standing,
and to construct and maintain similar encroachments on the Unimproved Land in respect of any additional improvements constructed adjacent to the Unimproved Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Unimproved Land.
MEAD COATED BOARD, INC., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A of the Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Fourth Amendment To Lease Agreement dated as of July 1, 1989, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment to Lease Agreement dated as of April 1, 1989 and a Third Amendment To Lease Agreement dated as of June 1, 1989, between the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as Trustee, to consent to the execution and delivery of the same.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of July 1, 1989.
MEAD COATED BOARD, INC.
By: /s/ W. D. Bloebaum, Jr. ---------------------------- Title: |
AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989 and a Third Supplemental Trust Indenture dated as of June 1, 1989, from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Fourth Amendment To Lease Agreement, dated as of July 1, 1989, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment To Lease Agreement dated as of April 1, 1989 and a Third Amendment To Lease Agreement dated as of June 1, 1989, between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of Trustee to be executed in its name and behalf as of July 1, 1989.
AMSOUTH BANK N.A., as Trustee
By: /s/ T. Franklin Caley -------------------------- Title: |
THIS FIFTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of December 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series 1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B Bonds"); $37,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project) Series 1989C (the "Series 1989C Bonds"); and $40,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project) Series 1989D (the "Series 1989D Bonds"), pursuant to a Trust Indenture, dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989 and a Fourth Supplemental Trust Indenture dated as of July 1, 1989 (collectively, the "Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
"Issuer" means the Board.
"Sodra Leases" means the Lease Agreement dated as of December 8, 1989 between Sodra Skogsagarna Leasing AB, as lessor, and the Board, as lessee, relating to a recovery boiler and certain related equipment; the Lease Agreement dated as of December 8, 1989 between Sodra Skogsagarna Leasing AB, as lessor, and the Board, as lessee, relating to a recausticizing system and certain related equipment; and other agreements, instruments or documents entered into or delivered by the Board in connection with or pursuant to said Lease Agreements.
"Sodra Leased Equipment" means the equipment that is the subject of the Sodra Lease.
and by adding to the definition of "Permitted Encumbrances" the following paragraph (m):
and (m) the Sodra Leases.
and by amending the definition of "Project Facilities" in its entirety by deleting said definition and substituting therefor the following:
"Project Facilities" means the facilities acquired, constructed, installed and financed with proceeds of the sale of the Notes and/or bonds issued under this Indenture (including any Additional Bonds); such facilities are more fully described in the Project Summary, as it may be amended from time to time;
Section 3.2 of the Agreement is amended by adding the following provision of the end of Section 3.2:
Notwithstanding the foregoing, the Board, for itself, its successors and assigns, warrants to the Company, its successors and assigns, that it has a leasehold
interest in the Sodra Leased Equipment under the Sodra Leases, subject only to Permitted Encumbrances and rights of the lessor under the Sodra Leases.
Section 5.1 of The Agreement is hereby amended by adding the following provision of the end of Section 5.1:
Notwithstanding and in addition to the foregoing, the Agreement and
the leasehold interest created by the Agreement shall terminate as to
the Sodra Leased Equipment or any part thereof (and only as to the
Sodra Leased Equipment) on the earliest of (i) midnight, December 1,
2028, (ii) payment in full of all Bonds and any Additional Bonds and
(iii) as to any portion of the Sodra Leased Equipment, termination of
the applicable Sodra Lease without the exercise by the Board of the
purchase option provided by such Sodra Lease.
Article V of the Agreement is hereby amended by adding the following new Section 5.7:
Section 6.9 of the Agreement is hereby amended by adding the following paragraph at the end of Section 6.9:
The Company shall indemnify and hold harmless the Issuer, and the members, officers, agents and employees of the Issuer, from any liability, damages, costs and expenses arising out of or resulting from the lease of the Sodra Leased Equipment under the Sodra Lease, except as the same may arise from the negligence or misconduct of the Issuer.
Article VIII of the Agreement is hereby amended by adding the following new
Section 8.7:
Exhibit B to the Agreement is hereby amended by adding the following provision at the end of Exhibit B:
The Project includes the Sodra Leased Equipment.
The term "Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989E Bonds.
with full force and effect to the Series 1989E Bonds. Without limiting the foregoing, all references in the Agreement to the "Bonds" shall be deemed to mean the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds and the Series 1989E Bonds, including without limitation the provisions of Section 5.3 of the Agreement relating to the payment of rents.
of the Fifth Supplemental Indenture, this Amendment and the Sodra Leases and the compliance by the Board with all of the provisions of each thereof and of the Series 1989E Bonds (i) are within the purposes, powers and authority of the Board, (ii) to the best of the knowledge of the Board, have been done in full compliance with the provisions of the Act, are legal and will not conflict with or constitute on the part of the Board a violation of or a breach of or default under, or result in the creation of any lien or encumbrance (other than Permitted Encumbrances under the Agreement) upon any property of the Board under the provisions of, its certificate of incorporation or bylaws, or any indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Board is a party or by which the Board is bound, or any license, judgment, decree, law, statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Board or any of its activities or properties, and (iii) have been duly authorized by all necessary corporate action on the part of the Board.
1989E Bonds and the Sodra Leases, which Certificates of Notification has not been revoked or rescinded and is in full force and effect.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (iii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1989E Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of this Amendment, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF ATTEST: THE CITY OF PHENIX CITY, ALABAMA By: /s/ Carlotta Waldrop By: /s/ Kenneth A. Roberts -------------------------- ----------------------------- Secretary Chairman MEAD COATED BOARD, INC. By: /s/ Jeffery M. O'Connell ----------------------------- Vice President |
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this 14th day of December, 1989.
/s/ Sydney S. Smith -------------------------- Notary Public |
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, Janet M. Cocuzzi, Notary Public in an for said County in said County in said State, hereby certify that Jeffrey M. O'Connell, whose name as VP. Admin. of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 8th day of December, 1989.
/s/ Janet M. Cocuzzi --------------------------- Notary Public |
(SEAL) Notary Public, DeKalb County, Georgia My Commission Expires: May 14, 1990 My Commission expires: __________ |
EXHIBIT "A"
to
Fifth Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of December 1, 1989
The Project Land includes the following property:
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63(degrees) 51' 31" E, 790.90' to the point of beginning; thence N 90(degrees) 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90(degrees) 00' W, 232.22'; thence S 15(degrees) 17' 15" E, 479.72' to a point on the northmost side of a rectangular area (Chip Screen House) which parallels last said course and is 75.0' north to south (7.00' of which is west of last said course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 45(degrees) 24' 34" E, 692.79' to the point of beginning; thence S 36(degrees) 51' 02" E, 454.94' to the point of ending; said land being 0.29 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 71(degrees) 34' 06" E, 600.24 ' to the point of beginning; thence S 71(degrees) 04' 32" E, 640.91'; thence N 50(degrees) 08' 32" E, 61.59' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S 56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus or minus) North-South; thence N 82(degrees) 51' 32" E, 355.48' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 48 degrees 06' 06" W, 35.94' to the point of beginning (N 792,374.0, E 234,473.25); thence S 0 degrees 00' W, 133.50'; thence N 90 degrees 00' W, 103.39'; thence S 0 degrees 00' W, 103.50'; thence 90 degrees 00' W, 48.00'; thence N 0 degrees 00' W, 55.75'; thence N 90 degrees 00' W, 80.00'; thence S 0 degrees 00' W, 42.75'; thence N 90 degrees 00' W, 63.00'; thence N 0 degrees 00' W, 110.00'; thence N 45 degrees 00' E, 55.00'; thence N 0 degrees 00' W, 23.11'; thence N 90 degrees 00' E, 23.00'; thence N 0 degrees 00' W, 23.25'; thence N 90 degrees 00' E, 170.00'; thence N 0 degrees 00' W, 28.75'; thence N 90 degrees 00' E, 62.50' to the point of beginning; said area being 1.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48 degrees 46' 07" W, 591.71' to the point of beginning (N 791,960.0 E 234,055.0); thence S 0' 00' W, 170.00'; thence N 90 degrees 00' W, 111.00; thence N 0 degrees 00' W, 170.00'; thence N 90 degrees 00' E, 111.00' to the point of beginning; said land being 0.43 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63 degrees 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234,490.0); thence N 0 degrees 00' W, 30.00'; thence N 90 degrees 00" E, 20.00'; thence S 0 degrees 00' W, 30.00'; thence N 90 degrees 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 80 degrees 22' 54" E, 879.79' to the point of beginning; thence N 0 degrees 00' W, 326.00'; thence N 90 degrees 00' E, 711.08'; thence S 0 degrees 00' W, 326.00'; thence N 90 degrees 00' W, 328.00'; thence S 0 degrees 00' W, 188.00'; thence N 90 degrees 00' W, 50.00'; thence N 0 degrees 00' W, 188.00'; thence N 90 degrees 00' W, 333.08' to the point of beginning; said land being 5.54 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11 degrees 04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence S 0 degrees 00" W, 82.00'; thence N 90 degrees 00" W, 52.00'; thence N 0 degrees 00' W, 82.00'; thence N 90 degrees 00' E, 52.00 to the point of beginning; said land being 0.10 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence N 70 degrees 51' 29" E, 267.79' to the point of beginning (793,238.0 E 233,503.0); thence N 90 degrees 00' E, 399.23'; thence S 0 degrees 00' W, 50.00'; thence N 90 degrees 00' E, 45.00'; thence S 0 degrees 00' W, 78.00'; thence N 90 degrees 00' W, 444.23'; thence N 0 degrees 00' W, 128.00' to the point of beginning; said land being 1.25 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N 0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N 0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S 0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S 0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N 0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N 00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N 90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N 0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along an arc South and East 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence S 0(degrees) 00' W, 135.33'; thence along an arc South and West 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence N 90(degrees) 00' W, 34.00'; thence N 0(degrees) 00' W, 99.79'; thence N 90(degrees) 00' W, 69.00'; thence N 59(degrees) 47' 19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00' W, 57.54' to the point of beginning; said land being 0.72 (plus or minus) acres;
(collectively, the "Unimproved Land"); less, in each case, any structures constructed and leased pursuant to a Lease Agreement dated July 1, 1977, and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977 Lease") under which Lessor leased to Georgia Kraft Company ("Georgia Kraft") a parcel of land in Russell County, Alabama as more particularly described in Exhibit A to the Lease (the "1977 Land"), together with certain items of equipment described in Exhibit B to the 1977 Lease (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated Board, Inc.);
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (the 1977 Land less and except the 1988 Land) in order to provide all necessary or convenient ingress or egress between the Unimproved Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Unimproved Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Unimproved Land to the Board Premises, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Unimproved Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Unimproved Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Unimproved Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Unimproved Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Unimproved Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Unimproved Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Unimproved Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Unimproved Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Unimproved Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Unimproved Land as long as any such equipment, structures or other improvements remain standing,
and to construct and maintain similar encroachments on the Unimproved Land in respect of any additional improvements constructed adjacent to the Unimproved Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Unimproved Land.
MEAD COATED BOARD, INC., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A of the Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Fifth Amendment To Lease Agreement dated as of October 1, 1989, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment to Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989 and a Fourth Amendment To Lease Agreement dated as of July 1, 1989, between the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as Trustee, to consent to the execution and delivery of the same.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of December 1, 1989.
MEAD COATED BOARD, INC.
By: /s/ ------------------------------- Vice President |
AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989 and a Fourth Supplemental Trust Indenture dated as of July 1, 1989, from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Fifth Amendment To Lease Agreement, dated as of October 1, 1989, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment To Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989 and a Fourth Amendment To Lease Agreement dated as or July 1, 1989, between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of Trustee to be executed in its name and behalf as of December l, 1989.
AMSOUTH BANK N.A., as Trustee
By: /s/ ---------------------------------- Title: Assistant Vice President and Corporate Trust Officer |
THIS SIXTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of May 1, 1990, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series 1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B Bonds"); $37,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989C (the "Series 1989C Bonds"); $40,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989D (the "Series 1989D Bonds") and $49,667,074 of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989E (the "Series 1989E Bonds") pursuant to a Trust Indenture dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989 and a Fifth Supplemental Trust Indenture dated as of December 1, 1989 (collectively, the "Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds and the Series 1989E Bonds for the payment of outstanding industrial
development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of December 1, 1988, as amended by the First Amendment To Lease Agreement dated as of March 1, 1989, the Second Amendment To Lease Agreement dated as of April 1, 1989, the Third Amendment To Lease Agreement dated as of June 1, 1989, the Fourth Amendment To Lease Agreement dated as of July 1, 1989 and the Fifth Amendment To Lease Agreement dated as of December 1, 1989 (collectively, the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds and the Series 1989E Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in connection with the Project. In that connection, the Board is issuing $170,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1990A (the "Series 1990A Bonds"), pursuant to the Indenture as supplemented by a Sixth Supplemental Trust Indenture dated as of May 1, 1990 (the "Sixth Supplemental Indenture") from the Board to the Trustee. The Indenture as supplemented by the Sixth Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
Section 1.1 Amendment of Section 5.3 of the Aqreement. The term
----------- ----------------------------------------- "Bonds" as used in Section 5.3 of the Agreement shall include the Series 1990A Bonds. Section 1.2 Terms of Agreement Applicable to Series 1990A Bonds. All ----------- --------------------------------------------------- |
terms, conditions, representations and covenants set forth in the Agreement applicable to the Series 1988A Bonds and not specifically otherwise provided for in the Indenture, any supplements thereto or the Agreement, shall apply with full force and effect to the Series 1990A Bonds. Without
limiting the foregoing, all references in the Agreement to the "Bonds" shall be
deemed to mean the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B
Bonds, the Series 1989C Bonds, the Series 1989D Bonds, the Series 1989E Bonds
and the Series 1990A Bonds, including without limitation the provisions of
Section 5.3 of the Agreement relating to the payment of rents.
Board, (ii) to the best of the knowledge of the Board, have been done in full compliance with the provisions of the Act, are legal and will not conflict with or constitute on the part of the Board a violation of or a breach of or default under, or result in the creation of any lien or encumbrance (other than Permitted Encumbrances under the Agreement) upon any property of the Board under the provisions of, its certificate of incorporation or Bylaws, or any indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Board is a party or by which the Board is bound, or any license, judgment, decree, law, statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Board or any of its activities or properties, and (iii) have been duly authorized by all necessary corporate action on the part of the Board.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (iii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1990A Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of this Amendment, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the abililty of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
By: /s/ Kenneth A. Roberts ------------------------------------ Chairman |
MEAD COATED BOARD, INC.
By: /s/ W. D. Bloebaum, Jr. ----------------------------------- Title: Treasurer |
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this _____ day of June, 1990.
/s/ Sydney S. Smith ---------------------------------- Notary Public |
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, Charity K. Burgess, Notary Public in and for said County in said State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 24th day of May, 1990.
/s/ Charity K. Burgess ------------------------------- Notary Public |
EXHIBIT "A"
to
Sixth Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of May 1, 1990
The Project Land includes the following property:
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63(degrees) 51' 31" E, 790.90' to the point of beginning; thence N 90(degrees) 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90(degrees) 00' W, 232.22'; thence S 15(degrees) 17' 15" E, 479.72' to a point on the northmost side of a rectangular area (Chip Screen House) which parallels last said course and is 75.0' north to south (7.00' of which is west of last said course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56+ acres;
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R
30 E, County of Russell, State of Alabama; thence N 45(degrees) 24' 34" E, 692.79' to the point of beginning; thence S 36(degrees) 51' 02" E, 454.94' to the point of ending; said land being 0.29 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 71(degrees)34' 06" E, 600.24' to the point of beginning; thence S 71(degrees) 04' 32" E, 640.91'; thence N 50(degrees) 08' 32" E, 61.59' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S 56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus or minus) North-South; thence N 82(degrees) 51' 32" E, 355.48' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 48(degrees) 06' 06" W, 35.94' to the point of beginning (N 792,374.0, E 234,473.25); thence S 0(degrees) 00' W, 133.50'; thence N 90(degrees) 00' W, 103.39'; thence S 0(degrees) 00' W, 103.50'; thence 90(degrees) 00' W, 48.00'; thence N 0(degrees) 00' W, 55.75'; thence N 90(degrees) 00' W, 80.00'; thence S 0(degrees) 00' W, 42.75'; thence N 90(degrees) 00' W, 63.00'; thence N 0(degrees) 00' W, 110.00'; thence N 45(degrees) 00' E, 55.00'; thence N 0(degrees) 00' W, 23.11'; thence N 90(degrees) 00' E, 23.00'; thence N 0(degrees) 00' W, 23.25'; thence N 90(degrees) 00' E, 170.00'; thence N 0(degrees) 00' W, 28.75'; thence N 90(degrees) 00' E, 62.50' to the point of beginning; said area being 1.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48(degrees) 46' 07" W, 591.71' to the point of beginning (N 791,960.0 E 234,055.0); thence S 0(degrees) 00' W, 170.00'; thence N 90(degrees) 00' W, 111.00; thence N 0(degrees) 00' W, 170.00'; thence N 90(degrees) 00' E, 111.00' to the point of beginning; said land being 0.43 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63(degrees) 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234,490.0); thence N 0(degrees) 00" W, 30.00'; thence N 90(degrees) 00" E, 20.00'; thence S 0(degrees) 00' W, 30.00'; thence N 90(degrees) 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 80(degrees) 22' 54" E, 879.79' to the point of beginning; thence N 0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' E, 711.08'; thence S 0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' W, 328.00'; thence S 0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 50.00'; thence N 0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 333.08' to the point of beginning; said land being 5.54 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11(degrees) 04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence S 0(degrees) 00" W, 82.00'; thence N 90(degrees) 00" W, 52.00'; thence N 0(degrees) 00' W, 82.00'; thence N 90(degrees) 00' E, 52.00 to the point of beginning; said land being 0.10 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning (793,238.0 E 233,503.0); thence N 90(degrees) 00' E, 399.23'; thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' E, 45.00'; thence S 0(degrees) 00' W, 78.00'; thence N 90(degrees) 00' W, 444.23'; thence N 0(degrees) 00' W, 128.00' to the point of beginning; said land being 1.25 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N 0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N 0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S 0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S 0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N 0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N 00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N 90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N 0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along an arc South and East 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence S 0(degrees) 00' W, 135.33'; thence along an arc South and West 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence N 90(degrees) 00' W, 34.00'; thence N 0(degrees) 00' W, 99.79'; thence N 90(degrees) 00' W, 69.00'; thence N 59(degrees) 47' 19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00' W, 57.54' to the point of beginning; said land being 0.72 (plus or minus) acres;
(collectively, the "Unimproved Land"); less, in each case, any structures constructed and leased pursuant to a Lease Agreement dated July 1, 1977, and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977 Lease") under which Lessor leased to Georgia Kraft Company ("Georgia Kraft") a parcel of land in Russell County, Alabama as more particularly described in Exhibit A to the Lease (the "1977 Land"), together with certain items of equipment described in Exhibit B to the 1977 Lease (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated Board, Inc.);
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (the 1977 Land less and except the 1988 Land) in order to provide all necessary or convenient ingress or egress between the Unimproved Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Unimproved Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Unimproved Land to the Board Premises, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Unimproved Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Unimproved Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Unimproved Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Unimproved Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Unimproved Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Unimproved Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Unimproved Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Unimproved Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Unimproved Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Unimproved Land as long as any such equipment, structures or other improvements remain standing,
and to construct and maintain similar encroachments on the Unimproved Land in respect of any additional improvements constructed adjacent to the Unimproved Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Unimproved Land.
MEAD COATED BOARD, INC., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A of the Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Sixth Amendment To Lease Agreement dated as of May 1, 1990, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment To Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease dated as of July 1, 1989 and a Fifth Amendment To Lease Agreement dated as of December 1, 1989 between the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as Trustee, to consent to the execution and delivery of the same.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of May 1, 1990.
MEAD COATED BOARD, INC.
By: /s/ W.D. Bloebaum, Jr. ------------------------------- Title: |
CONSENT OF TRUSTEE
AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989 and a Fifth Supplemental Trust Indenture dated as of December 1, 1989 from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Sixth Amendment To Lease Agreement, dated as of May 1, 1990, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment To Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease Agreement dated as of July 1, 1989 and a Fifth Amendment To Lease Agreement dated as of December 1, 1989 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of Trustee to be executed in its name and behalf as of May 1, 1990.
AMSOUTH BANK N.A., as Trustee
By: /s/ Jeff Fink -------------------------------- Title: CORPORATE TRUST OFFICER |
THIS SEVENTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of June 1, 1990, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board project) Series 1989A (the "Series 1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B Bonds"); $37,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board project) Series 1989C (the "Series 1989C Bonds"); $40,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989D (the "Series 1989D Bonds"); $49,667,074 of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989E (the "Series 1989E Bonds") and $170,000,000 of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1990A (the "Series 1990A Bonds" ) pursuant to a Trust Indenture dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental Trust Indenture dated as of December 1, 1989 and a
Sixth Supplemental Trust Indenture dated as of May 1, 1990 (collectively the "Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of December 1, 1988, as amended by the First Amendment To Lease Agreement dated as of March 1, 1989 the Second Amendment To Lease Agreement dated as of April 1, 1989, the Third Amendment To Lease Agreement dated as of June 1, 1989, the Fourth Amendment To Lease Agreement dated as of July 1, 1989, the Fifth Amendment To Lease Agreement dated as December 1, 1989, and the Sixth Amendment To Lease Agreement dated as of May 1, 1990 (collectively the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds as the same becomes due and payable.
The Project is located on the real property described in Exhibit A to the Agreement (the "Project Land"). The Company desires to amend the Agreement to modify the description of Project Land in order to more accurately include that land which constitutes the site of the Project. Pursuant to Section 12.5 of the Agreement and Section 1502 of the Original Indenture, the Board is permitted to amend the Agreement upon the mailing of notice to, and obtaining the written consent of, the holders of not less than 2/3 in principal amount of the outstanding Bonds.
NOW, THEREFORE, as contemplated by Section 12.5 of the Agreement and in accordance with Section 1502 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
(a) Exhibit A, attached to the Agreement and describing the Project Land, is hereby amended by inserting, subsequent to the description designated "NEW EVAPORATORS AND NEW TANKS AREA", the following:
A parcel of land being situated in the Northwest Quarter of
Section 28 and the Northeast Quarter of Section 29, Township 14 North,
Range 30 East, Russell County, Alabama and being more particularly
described as follows:
From the Northeast corner of Section 28, Township 14 North, Range 30 East, run thence South 75 degrees 41 minutes West for a distance of 5256.69 feet to the centerline intersection of Seaboard Railroad and the South construction road and the Point of Beginning; thence South 01 degree 24 minutes West a distance of 294.46 feet along the centerline of said railroad; thence along a curve to the right having a radius of 786.50 feet and an arc length of 674.79 feet, being subtended by a chord of South 25 degrees 40 minutes West for a distance of 654.28 feet along said railroad; thence South 52 degrees 00 minutes West for a distance of 695.08 feet along said railroad; thence North 00 degrees 07 minutes East for a distance of 1313.66 feet to the centerline of the South construction road; thence South 89 degrees 53 minutes East for a distance of 835.68 feet along said centerline to the Point of Beginning.
Said property contains 18.362 acres, more or less."
(b) Exhibit B. attached to the Agreement and summarizing the Project, is hereby amended by inserting, subsequent to the last sentence thereof, the following:
"The Project may also include the acquisition of land which may be used by a third party for warehousing or other purposes in connection with the Project."
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
By: /s/ Kenneth A. Roberts ------------------------------------ Title: Chairman |
MEAD COATED BOARD, INC.
By: /s/ W. D. Bloebaum, Jr. ------------------------------------ Title: Treasurer |
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this 27th day of June, 1990.
/s/ Sydney S. Smith --------------------------------- Notary Public |
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, David L. Santez, Notary Public in and for said County in said State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 21st day of June, 1990.
(SEAL) My commission expires: ------- DAVID L. SANTEZ, Attorney at Law Notary Public, State of Ohio My Commission has no Expiration Date. Section 147.03 O.R.C. |
MEAD COATED BOARD, INC., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, 1989A-E and 1990A of The Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Seventh Amendment To Lease Agreement dated as of June 1, 1990, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment to Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease dated as of July 1, 1989, a Fifth Amendment To Lease Agreement dated as of December 1, 1989 and a Sixth Amendment To Lease Agreement dated as of May 1, 1990 between the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as Trustee, to consent to the execution and delivery of the same.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of June 1, 1990.
MEAD COATED BOARD, INC.
CONSENT OF TRUSTEE
AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental Trust Indenture dated as of December 1, 1989, and a Sixth Supplemental Trust Indenture dated as of May 1, 1990 from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Seventh Amendment To Lease Agreement, dated as of May 1, 1990, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment To Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease Agreement dated as of July 1, 1989, a Fifth Amendment To Lease Agreement dated as of December 1, 1989, and a Sixth Amendment To Lease Agreement dated as of May 1, 1990 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of Trustee to be executed in its name and behalf as of June 1, 1990.
AMSOUTH BANK N.A., as Trustee
By: /s/ Jeff Fink ----------------------------- Title: Trust Officer |
DMY/FNO
THIS EIGHTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of August 1, 1990, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series 1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B Bonds"); $37,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989C (the "Series 1989C Bonds"); $40,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989D (the "Series 1989D Bonds"); $49,667,074 of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989E (the "Series 1989E Bonds") and $170,000,000 of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project) Series 1990A (the "Series 1990A Bonds") pursuant to a Trust Indenture dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental Trust Indenture dated as of December 1, 1989,
a Sixth Supplemental Trust Indenture dated as of May 1, 1990 and a Seventh Supplemental Trust Indenture dated as of June 1, 1990 (collectively, the "Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of December 1, 1988, as amended by the First Amendment To Lease Agreement dated as of March 1, 1989, the Second Amendment To Lease Agreement dated as of April 1, 1989, the Third Amendment To Lease Agreement dated as of June 1, 1989, the Fourth Amendment To Lease Agreement dated as of July 1, 1989, the Fifth Amendment To Lease Agreement dated as December 1, 1989, the Sixth Amendment To Lease Agreement dated as of May 1, 1990 and the Seventh Amendment to Lease Agreement dated as of June 1, 1990 (collectively the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds as the same becomes due and payable.
The Project is located on the real property described in Exhibit A to the Agreement (the "Project Land"). The Company desires to amend the Agreement to modify the description of Project Land in order to more accurately include that land which constitutes the site of the Project. Pursuant to Article 1502 of the Original Indenture, the Board is permitted to amend the Agreement upon the mailing of notice to, and obtaining the written consent of, the holders of not less than 2/3 in principal amount of the outstanding Bonds.
NOW, THEREFORE, as contemplated by Section 12.5 of the Agreement and in accordance with Section 1502 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning (N 793,238.0 E 233,503.0); thence N 90(degrees) 00' E, 399.23'; thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' W, 10.00'; thence S 0(degrees) 00' W, 40.00'; thence N 90(degrees) 00' W, 136.23'; thence N 0(degrees) 00' W, 80.00'; thence N 90(degrees) 00' W, 50.00'; thence S 0(degrees) 00' W, 10.00'; thence N 90(degrees) 00' W, 54.00'; thence S 0(degrees) 00' W, 40.00'; thence N 90(degrees) 00' E, 65.00'; thence S 0(degrees) 00' W, 30.00'; thence N 90(degrees) 00' W, 150.00'; thence N 0(degrees) 00' W, 17.00'; thence N 90(degrees) 00' W, 64.00'; thence N 0(degrees) 00' W, 73.00' to the point of beginning; said land being 0.657, more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A."
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
MEAD COATED BOARD, INC.
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this 20th day of August, 1990.
/s/ Sydney S. Smith ---------------------------- Notary Public |
(SEAL)
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, Robert A. Selak, Notary Public in and for said County in said State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 29th day of August, 1990.
/s/ Robert A. Selak ------------------------------- Notary Public |
(SEAL),
My commission expires:_________
ROBERT A. SELAK, Attorney at Law
Notary Public, State of Ohio
My Commission has no expiration date.
Section 147.03 0. R. C.
MEAD COATED BOARD, INC., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, Series 1989A, Series 1989B, Series 1989C, Series 1989E and Series 1990A of the Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Eighth Amendment To Lease Agreement dated as of August 1, 1990, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment to Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease dated as of July 1, 1989, a Fifth Amendment To Lease Agreement dated as of December 1, 1989, a Sixth Amendment To Lease Agreement dated as of May 1, 1990 and a Seventh Amendment to Lease Agreement dated as of June 1, 1990 between the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as Trustee, to consent to the execution and delivery of the same.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of August 1, 1990.
MEAD COATED BOARD, INC.
AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental Trust Indenture dated as of December 1, 1989, a Sixth Supplemental Trust Indenture dated as of May 1, 1990 and a Seventh Supplemental Trust Indenture dated as of June 1, 1990 from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Eighth Amendment To Lease Agreement, dated as of August 1, 1990, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment to Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease Agreement dated as of July 1, 1989, a Fifth Amendment To Lease Agreement dated as of December 1, 1989, a Sixth Amendment To Lease Agreement dated as of May 1, 1990 and a Seventh Amendment to Lease Agreement dated as of June 1, 1990 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of Trustee to be executed in its name and behalf as of August 1, 1990.
AMSOUTH BANK N.A., as Trustee
THIS NINTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of March 1, 1991, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $85,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series 1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B Bonds"); $37,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989C (the "Series 1989C Bonds"); $40,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989D (the "Series 1989D Bonds"); $49,667,074 of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989E (the "Series 1989E Bonds"); and $170,000,000 of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1991A (the "Series 1991A Bonds") pursuant to a Trust Indenture dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental Trust Indenture dated as of December 1, 1989, a Sixth Supplemental Trust Indenture dated as of May 1, 1990, a Seventh Supplemental Trust Indenture dated as of June 1, 1990 and an Eighth Supplemental Trust Indenture dated as of August 1, 1990 (collectively, the "Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds, the Series
1989E Bonds and the Series 1990A Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board and for the payment of certain obligations of the Board in connection with various Equipment Leases (as defined in the Indenture) for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of December 1, 1988, as amended by the First Amendment To Lease Agreement dated as of March 1, 1989, the Second Amendment To Lease Agreement dated as of April 1, 1989, the Third Amendment To Lease Agreement dated as of June 1, 1989, the Fourth Amendment To Lease Agreement dated as of July 1, 1989, the Fifth Amendment To Lease Agreement dated as of December 1, 1989, the Sixth Amendment To Lease Agreement dated as of May 1, 1990, the Seventh Amendment To Lease Agreement dated as of June 1, 1990 and the Eighth Amendment To Lease Agreement dated as of August 1, 1990 (collectively, the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in connection with the Project. In that connection, the Board is issuing $81,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1991A (the "Series 1991A Bonds"), pursuant to the Indenture as supplemented by a Ninth Supplemental Trust Indenture dated as of March 1, 1991 (the "Ninth Supplemental Indenture") from the Board to the Trustee. The Indenture as supplemented by the Ninth Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
Section 1.1 Amendment of Section 5.3 of the Agreement. The term
----------- ----------------------------------------- "Bonds" as used in Section 5.3 of the Agreement shall include the Series 1991A Bonds. Section 1.2 Terms of Agreement Applicable to Series 1991A Bonds. All ----------- --------------------------------------------------- |
terms, conditions, representations and covenants set forth in the Agreement applicable to the Series 1988A Bonds and not specifically otherwise provided for in the
Indenture, any supplements thereto or the Agreement, shall apply with full force
and effect to the Series 199lA Bonds. Without limiting the foregoing, all
references in the Agreement to the "Bonds" shall be deemed to mean the Series
1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C
Bonds, the Series 1989D Bonds, the Series 1989E Bonds, the Series 1990A Bonds
and the Series 1991A Bonds, including without limitation the provisions of
Section 5.3 of the Agreement relating to the payment of rents.
have been done in fall compliance with the provisions of the Act, are legal and will not conflict with or constitute on the part of the Board a violation of or a breach of or default under, or result in the creation of any lien or encumbrance (other than Permitted Encumbrances under the Agreement) upon any property of the Board under the provisions of, its certificate of incorporation or Bylaws, or any indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Board is a party or by which the Board is bound, or any license, judgment, decree, law, statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Board or any of its activities or properties, and (iii) have been duly authorized by all necessary corporate action on the part of the Board.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (iii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series l991A Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of this Amendment, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
By: /s/ Kenneth A. Roberts ---------------------- Chairman |
MEAD COATED BOARD, INC.
By: /s/ E.M. Karter ---------------------- Vice President |
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Sydney S. Smith, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this 27th day of February, 1991.
/s/ Sydney S. Smith ________________________________ Notary Public |
(SEAL) My commission expires: 2/25/92
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, Eva L. Miller, Notary Public in and for said County in said State, hereby certify that E.M. Karter, whose name as Vice President of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the Same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 1st day of March, 1991.
/s/ Eva L. Miller -------------------------------------- Notary Public |
My commission expires: _______________ EVA L. MILLER, Notary Public In and for the State of Ohio My Commission Expires June 29, 1992
(SEAL)
Mead Coated Board, Inc., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, Series 1989A, Series 1989B, Series 1989C, Series 1989D, Series 1989E and Series l990A of The Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Ninth Amendment To Lease Agreement, dated as of March 1, 1991, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment To Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease Agreement dated as of July 1, 1989, a Fifth Amendment To Lease Agreement dated as of December 1, 1989 a Sixth Amendment To Lease Agreement dated as of May 1, 1990, a Seventh Amendment To Lease Agreement dated as of June 1, 1990 and an Eighth Amendment To Lease Agreement dated as of August 1, 1990 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of March 1, 1991.
MEAD COATED BOARD, INC.
By: /s/ E.M. Karter ----------------------------- Vice President |
AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental Trust Indenture dated as of December 1, 1989, a Sixth Supplemental Trust Indenture dated as of May 1, 1990, a Seventh Supplemental Trust Indenture dated as of June 1, 1990, and an Eighth Supplemental Trust Indenture dated as of August 1, 1990 from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Ninth Amendment To Lease Agreement, dated as of March 1, 199l, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment To Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease Agreement dated as of July 1, 1989, a Fifth Amendment To Lease Agreement dated as of December 1, 1989 a Sixth Amendment To Lease Agreement dated as of May 1, 1990, a Seventh Amendment To Lease Agreement dated as of June 1, 1990 and an Eighth Amendment To Lease Agreement dated as of August 1, 1990 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of Trustee to be executed in its name and behalf as of March 1, 1991.
AMSOUTH BANK N.A., as Trustee
EXHIBIT "A"
to
Ninth Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of March 1, 1991
The Project Land includes the following property:
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State Georgia Coordinate System; and lying in Section 28, T 14 N , R 30 E, County of Russell, State of Alabama; thence N 63 degrees 51' 31" E, 790.90' to the point of beginning; thence N 90 degrees 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90 degrees 00' W, 232.22'; thence S 15 degrees 17' 15" E, 479.72' to a point on the northmost side of a rectangular area (Chip Screen House) which parallels last said course and is 75.0' north to south (7.00' of which is west of last said course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56+ acres;
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N. R 30 E, County of Russell, State of Alabama; thence N 45 degrees 24' 34" E, 692.79' to the point of beginning; thence S 36 degrees 51' 02" E, 454.94' to the point of ending; said land being 0.29 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N. R 30 E, County of Russell, State of Alabama; thence N 71 degrees 34' 06" E, 600.241 to the point of beginning; thence S 71 degrees 04' 32" E, 640.91'; thence N 50 degrees 08' 32" E, 61.59' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N. R 30 E, County of Russell, State of Alabama; thence S 48 degrees 21' 59" W, 84.29' to the point of beginning; thence S 56 degrees 07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a radius of 15.00' and a central angle of 360 degrees 00' bounded by a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus or minus) North-South; thence N 82 degrees 51' 32" E, 355.48' to the point of ending; said land being 0.45 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 48 degrees 06' 06" W, 35.94' to the point of beginning (N 792,374.0, E 234,473.25); thence S 0 degrees 00' W, 133.50'; thence N 90 degrees 00' W, 103.39'; thence S 0 degrees 00' W, 103.50'; thence 90 degrees 00' W, 48.00'; thence N 0 degrees 00' W, 55.75'; thence N 90 degrees 00' W, 80.00'; thence S 0 degrees 00' W, 42.75'; thence N 90 degrees 00' W, 63.00'; thence N 0 degrees 00' W, 110.00'; thence N 45 degrees 00' E, 55.00'; thence N 0 degrees 00' W, 23.11'; thence N 90 degrees 00' E, 23.00; thence N 00 degrees W,
23.75'; thence N 90 00' E, 170.00'; thence N 0 00' W, 28.75'; thence N 90 00' E, 62.50' to the point of beginning; said area being 1.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48 46' 07" W. 591.71' to the point of beginning (N 791,960.0 E 234,055.0); thence S 0 degrees 00' W, 170.00'; thence N 90 degrees 00' W, 111.00; thence N 0 degrees 00' W, 170.00'; thence N 90 degrees 00' E, 111.00' to the point of beginning; said land being 0.43 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63 degrees 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90 degrees 00" E, 20.00'; thence S 0 degrees 00' W, 30.00'; thence N 90 degrees 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 80 degrees 22' 54" E, 879.79' to the point of beginning; thence N 0 degrees 00' W, 326.00'; thence N 90 degrees 00' E, 711.08'; thence S 0 degrees 00' W, 326.00'; thence N 90 degrees 00' W, 328.00'; thence S 0 degrees 00' W, 188.00'; thence N 90 degrees 00' W, 50.00'; thence N 0 degrees 00' W, 188.00'; thence N 90 degrees 00' 333.08' to the point of beginning; said land being 5.54 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11 degrees 04' 57" W, 197.69' to the point of beginning (N792,156.0, E 234,462.0); thence S 0 degrees 00" W, 82.00'; thence N 90 degrees 00" W, 52.00'; thence N 0 degrees 00' W, 82.00'; thence N 90 degrees 00' E, 52.00 to the point of beginning; said land being 0.10 (plus or minus) acres;
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence N 70 degrees 51' 29" E, 267.79' to the point of beginning (N 793,238.0 E 233,503.0); thence N 90 degrees 00' E, 399.23'; thence S 0 degrees 00' W, 50.00'; thence N 90 degrees 00' W, 10.00'; thence S 0 degrees 00' W, 40.00'; thence N 90 degrees 00' W, 136.23'; thence N 0 degrees 00' W, 80.00'; thence N 90 degrees 00' W, 50.00'; thence S 0 degrees 00' W, 10.00'; thence N 00' W, 54.00'; thence S 0 degrees 00' W, 40.00'; thence N 90 degrees 00' E, 65.00'; thence S 0 degrees 00' W, 30.00'; thence N 90 degrees 00' W, 150.00'; thence N 0 degrees 00' W, 17.00'; thence N 90 degrees 00' W, 64.00'; thence N 0 degrees 00' W, 73.00' to the point of beginning; said land being 0.657, more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
All that portion of land, and structures lying thereon, in Section 28, T 14 N. R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40 degrees 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90 degrees 00' E, 36.30'; thence N 0 degrees 00' W, 20.50'; thence N 90 degrees 00' E, 72.26'; thence N 0 degrees 00' W, 14.83'; thence N 90 degrees 00' E, 110.50'; thence S 0 degrees 00' W, 42.58'; thence N 90 degrees 00' E, 26.00'; thence S 0 degrees, 81.00'; thence N 90 degrees 00' W. 51.00'; thence N 0 degrees 00" W, 25.12'; thence N 90 degrees 00' W. 85.50'; thence N 00 degrees 00' W, 8.63'; thence N 90 degrees 00' W, 72.26'; thence N 90 degrees 00' W. 20.50'; thence N 0 degrees 00' W, 36.30'; thence N 0 degrees 00' W. 34.00' to the point of beginning; said land being 0.47 (plus or minus) acres;
NEW EVAPORATORS AND NEW TANKS AREA
All that portion of land, and structures lying thereon, in section 28, T 14 N. R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 62 degrees 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90 degrees 00' E, 246.67'; thence along an arc South and East 53.41' having a radius of 34.00' with a central angle of 90 degrees 00'; thence S 0 degrees 00' W. 135.33'; thence along an arc South and West 53.41' having a radius of 34.00' with a central angle of 90 degrees 00'; thence N 90 degrees 00' W; 34.00'; thence N 0 degrees 00' W. 99.79'; thence N 90 degrees 00' W. 69.00'; thence N 59 degrees 47' 19" W. 91.42'; thence N 90 degrees 00' W. 64.67'; thence N 0 degrees 00' W. 57.54' to the point of beginning; said land being 0.72 (plus or minus) acres;
(collectively, the "Unimproved Lands"); less, in each case, any structures constructed and leased pursuant to a Lease Agreement dated July 1, 1977, and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977 Lease") under which Lessor leased to Georgia Kraft Company ("Georgia Kraft") a parcel of land in Russell County, Alabama as more particularly described in Exhibit A to the Lease (the "1977 Land"), together with certain items of equipment described in Exhibit B to the 1977 Lease (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated Board, Inc.);
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (the 1977 Land less and except the 1988 Land) in order to provide all necessary or convenient ingress or egress between the Unimproved Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Unimproved Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Unimproved Land to the Board Premises, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Unimproved Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other; improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Unimproved Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Unimproved Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Unimproved Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Unimproved Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Unimproved Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Unimproved Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Promises in order to permit and facilitate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Unimproved Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Unimproved Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Unimproved Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the Unimproved Land in respect of any additional improvements constructed adjacent to the Unimproved Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Unimproved Land.
DMY/BOND/AW1
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
Lease Agreement
Dated as of June 1, 1993
Relating to $24,000,000 The Industrial Development Board of the City of Phenix City, Alabama Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1993A
LEASE AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Lease Agreement is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of this Lease Agreement.)
ARTICLE I DEFINITIONS
Section 1.1 Definitions 1
Section 1.2 Certain Rules of Interpretation 6
ARTICLE II REPRESENTATIONS
Section 2.1 Representations by the Issuer 6
Section 2.2 Representations by the Company 8
ARTICLE III LEASING CLAUSES AND TITLE PROJECT
Section 3.1 Lease of the Project 10
Section 3.2 Title to Project 10
Section 3.3 Quiet Enjoyment 10
ARTICLE IV ACQUISITION, CONSTRUCTION,
INSTALLATION, EQUIPPING AND
COMPLETION OF THE PROJECT;
ISSUANCE OF THE BONDS
Section 4.1 Acquisition, Construction, Installation, Equipping and Completion of the Project 10 Section 4.2 Issuance of Bonds; Disbursements from the Project Fund 12 Section 4.3 Establishment of Completion Date; Excess Proceeds 13 Section 4.4 Insufficiency of Project Fund 14 Section 4.5 Issuer to Pursue Remedies Against Suppliers, Contractors and Subcontractors and their Sureties 14 ARTICLE V EFFECTIVE DATE OF THIS AGREEMENT; DURATION; OF LEASE TERM; RENTAL PROVISIONS |
Section 5.1 Effective Date of This Agreement; Duration of Lease Term 15 Section 5.2 Delivery of Acceptance of Possession 15 Section 5.3 Rental Payments 15 Section 5.4 Obligation of the Company Unconditional 17 Section 5.5 Assignment and Pledge of Rental Payments and the Agreement 17 Section 5.6 Agreement to Supply Letter of Credit 17 Section 5.7 Purchase of Bonds 17 Section 5.8 Optional Purchase of Bonds 18 Section 5.9 Determination of Interest Rate Periods 18 ARTICLE VI SPECIAL COVENANTS Section 6.1 Use of Project 18 Section 6.2 Use of Proceeds 19 Section 6.3 Indemnity Against Claims 19 Section 6.4 Inspection of the Project 20 Section 6.5 Company to Maintain Its Corporate Existence; Conditions Under Which Exceptions Permitted 20 Section 6.6 Ownership; Further Assurances and Corrective Instruments 20 Section 6.7 Maintenance of Project by Company 21 Section 6.8 Redemption or Purchase of Bonds 22 Section 6.9 Investment of Bond Fund and Project Fund Moneys Permitted 22 Section 6.10 Non-Arbitrage Covenant 22 Section 6.11 Removal and Substitution of Portions of Project 23 Section 6.12 Taxes, Other Governmental Charges and Utility Charges 25 Section 6.13 Insurance Required 26 Section 6.14 Application of Net Proceeds of Insurance 26 Section 6.15 Additional Provisions Respecting Insurance 26 Section 6.16 Investment Credit 26 Section 6.17 Granting of Easements 27 Section 6.18 Release of Certain Land 27 ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION Section 7.1 Damage and Destruction 29 Section 7.2 Condemnation 30 Section 7.3 Condemnation of Company-Owned Property 31 |
ARTICLE VIII ASSIGNMENT; SUBLEASING, PLEDGING AND SELLING; REDEMPTION; RENT PREPAYMENT AND ABATEMENT; OPTION AND OBLIGATION TO PURCHASE PROJECT; OPTION TO EXTEND TERM OF AGREEMENT Section 8.1 Assignment and Subleasing 31 Section 8.2 Pledge Under Indenture 32 Section 8.3 Restrictions on Sale of Project by Issuer 32 Section 8.4 Prepayment of Rents; Option to Purchase Project; Obligation to Purchase Project 32 Section 8.5 Rent Abatements If Bonds Paid Prior to Maturity 34 Section 8.6 Reference to Bonds Ineffective After Bonds Paid 34 Section 8.7 Option to Extend 34 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Section 9.1 Events of Default 35 Section 9.2 Remedies on Default 37 Section 9.3 Agreement to Pay Attorneys' Fees and Expenses 37 Section 9.4 No Additional Waiver Implied by One Waiver 38 Section 9.5 Notice of Default 38 ARTICLE X MISCELLANEOUS Section 10.1 Notices 38 Section 10.2 Binding Effect 38 Section 10.3 Severability 38 Section 10.4 Amounts Remaining in the Bond Fund 38 Section 10.5 Amendments 39 Section 10.6 Execution in Counterparts 39 Section 10.7 Applicable Law 39 Section 10.8 Captions 39 Section 10.9 Recording of Agreement 39 Section 10.10 Net Lease 39 EXHIBITS Exhibit "A" Project Land A-1 Exhibit "B" Description of Project B-1 Exhibit "C" Form of Requisition C-1 |
THIS LEASE AGREEMENT, dated as of June 1, 1993 between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation duly organized and existing under the laws of the State of Alabama, as lessor (the "Issuer"), and MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware (the "Company"), evidencing the agreement of the parties hereto.
In consideration of the respective representations and agreements hereinafter contained, the parties hereto agree as follows (provided that in the performance of the agreements of the Issuer herein contained, any obligation the Issuer may thereby incur for the payment of money shall not be a general debt, liability or obligation of the Issuer, or of the State of Alabama or any political subdivision thereof, but shall be payable solely out of the rents, revenues and proceeds derived from this Agreement (hereinafter defined) and the sale of the Bonds referred to herein:
ARTICLE I
(a) obligations incurred for labor and materials (including reimbursements payable to the Company or the Issuer and payments on contracts in the name of the Company or the Issuer) in connection with the acquisition, construction, installation and equipping of the Project;
(b) the cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of construction of the Project;
(c) all costs of engineering services, including the costs for test borings, surveys, estimates, plans and specifications and preliminary investigation therefor, and for supervising construction, as well as for the performance of all other duties required by or consequent upon the proper construction of the Project;
(d) overhead of the Company, to the extent not included in subparagraph (c) above, allocable to the Project by the Company in accordance with generally accepted accounting principles;
(e) interest to accrue in respect of the Bonds to the Completion Date;
(f) amounts paid to the United States Treasury pursuant to (S)1.103-15AT(d) and (e) of Temporary Treasury Regulations or any regulations promulgated pursuant to Section 148(f) of the Code;
(g) subject to the limitations of Section 147(g) of the Code, all expenses incurred in connection with the issuance of the Bonds, including without limitation initial compensation and expenses of the Trustee, legal expenses and fees, costs of printing and engraving, recording and filing fees, compensation of the underwriters, if any, rating agency fees and costs of the Letter of Credit;
(h) all other costs which may properly be paid or accrued for the acquisition, construction, installation, equipping or financing of the Project; and
(i) any sums required to reimburse the Company for advances made for any of the above items or for any other costs incurred or for work done which are properly chargeable to the Project.
facilities within the meaning of said Code section or facilities functionally related and subordinate thereto, excluding amounts paid as costs of issuance of the Bonds but including fees paid to the issuer of the Letter of Credit during the construction of the Project.
"Herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this Agreement and not solely to the particular Article, Section or subdivision in which such word is used.
Any terms defined in Article I of the Indenture and not defined herein are incorporated by reference.
ARTICLE II
business, which violation or failure to obtain is likely to materially and adversely affect the ability of the Company to perform its obligations hereunder;
ARTICLE III
ARTICLE IV
(a) It will acquire, construct, equip and install facilities necessary for the Project. The aforesaid
acquisition, construction, equipping and installation shall be substantially in accordance with the Plans. The Project shall be the property of the Issuer and subject to the terms hereof.
(b) Subject to the provisions of the following paragraphs, it will cause to be acquired, constructed, equipped and installed such additional machinery, equipment and related property described in the list attached hereto as Exhibit "B" and such other items of machinery, equipment and related property as in the Company's judgment may be necessary for the operation of the Project. Such additional machinery, equipment and related property shall become a part of the Project and shall be the property of the Issuer and subject to the terms hereof.
The Issuer and the Company agree that the Company from time to time may supplement or amend the Plans (including additions thereto or omissions therefrom), provided that no such amendment shall provide for a material addition to, deletion from or modification of the Plans unless there shall have been filed with the Issuer and the Trustee (i) a revised Exhibit "B" containing a description of the Project as revised by such amendment or modification, the accuracy of which shall have been certified by an Authorized Company Representative, and (ii) the written opinion of a firm of nationally recognized Bond Counsel experienced in the financing of solid waste disposal facilities stating that (a) the Project as provided for in such modified or amended Plans will constitute a "project" within the meaning of the Act, and (b) the expenditure of moneys from the Project Fund to pay the Cost of Construction in accordance with such amended or modified Plans will not impair the exemption of interest on Bonds from federal income taxation.
The Issuer hereby makes, constitutes and appoints the Company as its true, lawful and exclusive agent for the acquisition, construction, equipping and installation of the Project, and the Company hereby accepts such agency to act and do all things on behalf of the Issuer, to perform all acts and agreements of the Issuer hereinabove provided in this Section, and to bring any actions or proceedings against any person which the Issuer might bring with respect thereto as the Company shall deem proper. The Issuer hereby ratifies and confirms all actions of, and assumes and adopts all contracts entered into by, the Company with respect to the Project prior to the date hereof. This appointment of the Company to act as agent and all authority hereby conferred or granted is conferred and granted irrevocably until all activities in connection with the acquisition,
construction, equipping and installation of the Project shall have been completed, and shall not be terminated prior thereto by act of the Issuer or of the Company. So long as the Company is not in default hereunder, upon the Completion Date (or at any time prior thereto upon the request of the Company) the Issuer will assign to the Company all warranties and guarantees of all contractors, subcontractors, suppliers, architects and engineers for the furnishing of labor, materials or equipment or supervision or design in connection with the Project and any rights or causes of action arising from or against any of the foregoing.
The Issuer agrees to complete the acquisition, construction, equipping and installation of the Project as promptly as practicable after receipt of the proceeds from the sale of the Bonds, to continue said acquisition, construction, equipping and installation with all reasonable dispatch and to use its best efforts to cause said acquisition, construction, equipping and installation to be completed as soon as practicable, delays incident to strikes, riots, acts of God or the public enemy beyond the reasonable control of the Issuer only excepted, but if said acquisition, construction and installation is not completed within the time herein contemplated there shall be no resulting liability on the part of the Issuer and no diminution in or postponement or abatement of the rents and other payments required by Section 5.3 to be paid by the Company.
The Issuer has authorized and directed the Trustee to disburse moneys from the Project Fund for payment or reimbursement of the Cost of Construction. Each disbursement from the Project Fund shall be made only upon receipt by the Trustee of a written requisition signed by the Authorized Company Representative in substantially the form of Exhibit "C" attached hereto, stating with respect to each payment to be made: (a) the requisition number, (b) the name and address (or wire transfer instructions) of the person, firm or corporation to whom payment is due, (c) the amount to be paid, (d) certifying that
each obligation mentioned therein has been properly incurred and is a proper charge against the Project Fund, specifying in reasonable detail the purpose and circumstances of such obligation and certifying that such obligation has not been the basis of any previous withdrawal from the Project Fund, and (e) certifying that payment of such requisition will not result in less than 95% of the total proceeds of the sale of the Bonds expended at that time having been used to pay Exempt Costs.
In approving or certifying any requisition under this Section the Issuer and the Trustee may rely as to the completeness and accuracy of all statements in such requisition upon the approval of or certification to such requisition by the Authorized Company Representative, and the Company hereby agrees to indemnify and save harmless the Issuer and the Trustee, and each of their directors, officers, members, agents and employees from any liability incurred in connection with any requisition so approved or certified.
In the event that moneys shall remain in the Project Fund after payment of all Cost of Construction of the Project, such moneys shall, at the direction of the Company, be used (i) for the redemption of Bonds in the largest amount possible at the earliest date permitted by the Indenture at which the redemption price for such Bonds to be redeemed is 100% of the principal amount thereof plus accrued interest to the redemption date or for the purchase of Bonds pursuant to Article V of the Indenture or otherwise for the purpose of cancellation at any time prior to the earliest date permitted by the Indenture for the redemption of Bonds, (ii) paid into the Bond Fund to pay interest on the Bonds, or (iii) a combination of (i) and (ii) above; provided, however, that such moneys shall not be used as described in (i), (ii) or (iii) above unless the Company supplies the Trustee with
an opinion of Bond Counsel to the effect that such use will not adversely affect the exclusion from gross income of the interest on the Bonds for federal income tax purposes. The Company agrees that any investments which it may direct of such amounts shall result in a yield on such investments, computed in accordance with the applicable provisions of (S)(S) 1.103-13 and 1.103-14 of the Treasury Regulations, not in excess of the yield (computed in the same manner) on the Bonds.
ARTICLE V
(i) On or prior to each date upon which interest on the Bonds is payable under the Indenture, a sum which will be equal to the interest on the Bonds coming due on such dates;
(ii) On or prior to any redemption date for the Bonds, a sum equal to the principal of, and the redemption premium (if any) and the interest on, the Bonds which are to be redeemed on such date; and
(iii) On or prior to June 1, 2028, a sum which will be equal to the principal amount of the Bonds coming due on such date.
If the Company defaults in any payment required by this paragraph (a), the Company will pay interest (to the extent allowed by law) on such amount until paid at the rate provided for in the Bonds.
(b) In furtherance of the foregoing, so long as any Bonds are outstanding the Company will pay all amounts required to prevent any deficiency by an act or failure to act by the Trustee, the Company, the Issuer, the Tender Agent or any other person.
(c) The Company will also pay: (i) the fees of the Trustee for rendering Ordinary Services and the Ordinary Expenses of the Trustee and any Paying Agents under the Indenture, such fees and expenses to be paid directly to the Trustee or Paying Agents for their respective accounts as and when such fees and expenses become due and payable, (ii) any fees for Extraordinary Services and the Extraordinary Expenses of the Trustee and (iii) any expenses in connection with any redemption of the Bonds. The Company may, without constituting grounds for an Event of Default hereunder, withhold payment of any fees for Ordinary Services and Extraordinary Services and Ordinary Expenses and Extraordinary Expenses to contest in good faith the necessity of the same or to contest in good faith the necessity for any services performed and expenses paid or incurred by any Paying Agent.
(d) In addition to the payments required to be made by the Company pursuant to paragraph (a) above, the Company shall pay to the Trustee amounts sufficient to pay the purchase price of any Bonds which the Company purchases pursuant to Section 3.03 of the Indenture. All such payments shall be made to the Trustee at its principal corporate trust office or to the Tender Agent at its principal office, as the case may be, in lawful money of the United States of America.
(e) The Company will also pay, on or prior to each day on which a payment of purchase price of a Bond which has been tendered shall become due, an amount which will enable the Trustee or the Tender Agent, as the case may be, to make such payment in full in a timely manner.
(f) The Company need not pay any amount paid to Bondholders from the proceeds of a draw on the Letter of Credit or any Alternate Credit Facility.
(g) The Company need not pay any amount required to be paid by paragraphs (d) and (e) above to the extent of any amount paid to Bondholders from the proceeds of a remarketing of Bonds in accordance with Section 3.04 of the Indenture.
Indenture the terms and conditions relating to such purchases and has set forth in Article XII of the Indenture the duties and responsibilities of the Tender Agent with respect to the purchase of Bonds and of the Remarketing Agent with respect to the remarketing of Bonds. The Company approves the appointment by the Issuer of Merrill Lynch, Pierce, Fenner & Smith Incorporated as the initial Remarketing Agent and Citibank, N.A. as the initial Tender Agent and hereby authorizes and directs the Tender Agent and the Remarketing Agent to purchase, offer, sell and deliver Bonds in accordance with the provisions of Section 3.01 and Article XII of the Indenture. The Issuer acknowledges that the Remarketing Agent, in undertaking its duties set forth in the Indenture with respect to the determination of the interest rates borne by the Bonds, will be acting as agent for and on behalf of the Issuer. The Issuer shall have no obligation or responsibility, financial or otherwise, with respect to the purchase or remarketing of Bonds or the making or continuation of arrangements therefor, except that the Issuer shall generally cooperate with the Company, the Trustee, the Tender Agent and the Remarketing Agent as contemplated in Article XII of the Indenture.
ARTICLE VI
In addition, the Company covenants with the Issuer, for the benefit of the Bondholders, that the proceeds of the Bonds will not be used in any manner which would result in the loss of the exclusion from gross income of the interest on the Bonds for federal income tax purposes.
The Company agrees to indemnify the Trustee, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the
Indenture, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties thereunder or hereunder.
(b) The Company may, from time to time, in its sole discretion and at its own expense, make any additions, modifications or improvements to the Project, including installation of additional machinery equipment, and related property, which it may deem desirable for its business purposes; provided that all such additions, modifications and improvements do not adversely affect the use of the Project as solid waste disposal facilities. All machinery, equipment and related personal property so installed by the Company shall not be subject to this Agreement or the lien of the Indenture but shall be subject to the landlord's lien created under the Code of Alabama, 1975, Section 35-9-60. All such machinery, equipment and related property so installed by the Company may be modified or removed at any time while there exists no Event of Default hereunder; provided, that any damage to the Project occasioned by such modification or removal shall be repaired by the Company at its own expense.
(c) The Company shall not permit any mechanics', materialmen's, suppliers', vendors' or other similar lien to be established or remain against the Project for labor or materials furnished or services rendered in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that if the Company shall first notify the Trustee of its intention so to do, the Company may in good faith contest any mechanics', materialmen's, suppliers', vendors' or other similar lien filed or established against the Project, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the Issuer or the Trustee shall notify the Company that by nonpayment of any such items, the lien or security interests afforded by this Agreement or as to any part of the Project or the payments to be made pursuant to the Agreement or the Revenues will be materially endangered or the Project or any part thereof or the payments to be made pursuant to the Agreement or the Revenues will be subject to loss or forfeiture, in which event the Company shall promptly pay and
cause to be satisfied and discharged all such unpaid items. The Issuer will cooperate fully with the Company in any such contest.
(a) the principal amount of Bonds to be redeemed or purchased;
(b) the date of such redemption or purchase; and
(c) in the case of a redemption of Bonds, directions to mail a notice of redemption in accordance with Section 8.04 of the Indenture or in the case of a purchase of Bonds, directions to mail a notice of mandatory tender for purchase in accordance with Section 3.03(g) of the Indenture.
(a) The Company and the Issuer each covenants to the owners of the Bonds that, notwithstanding any other provision of this Agreement or any other instruments, it shall take no action, nor shall the Company direct the Trustee to take or approve the Trustee's taking any action or direct the Trustee to make or approve the Trustee's making any investment or use of proceeds of
the Bonds or any other moneys which may arise out of or in connection with, this
Agreement, the Indenture or the Project, which would cause the Bonds to be
treated as "arbitrage bonds" within the meaning of Section 148 of the Code. In
addition, the Company covenants and agrees to comply with the requirements of
Section 148(f) of the Code as it may be applicable to the Bonds or the proceeds
derived from the sale of the Bonds or any other moneys which may arise out of or
in connection with, this Agreement, the Indenture or the Project throughout the
term of the Bonds.
(b) The Company will determine the amount of the required arbitrage rebate, if any, payable to the United States Government under Section 148 of the Code should gross proceeds (within the meaning of Section 148(f) of the Code) arise and will make any required payment, in the amounts and at the times required by Section 148(f) of the Code and applicable Treasury Regulations, regardless of whether there are any remaining proceeds or other funds attributable to the Bonds that are available for the purpose of the Bonds. The Company will not permit the amount of gross proceeds invested in any Bond year at a yield materially higher than the Bond yield to exceed the limits set forth in Section 148 of the Code.
(c) No provision of this Agreement shall be construed to impose upon the Trustee any obligation or responsibility for compliance with arbitrage regulations.
(a) substitute (either by direct payment of the costs thereof or by advancing to the Issuer the moneys necessary therefor) and install other machinery, equipment or related property having equal or greater utility (but not necessarily having the same function or value) in the operation of the Project as a solid waste disposal facility (provided such removal and substitution shall not impair operating unity),
all of which substituted machinery, equipment or related property shall become a part of the Project; or
(b) not make any such substitution and installation, provided (i) that in the case of the sale of any such machinery, equipment or related property to anyone other than itself or in the case of the scrapping thereof, the Company shall pay into the Bond Fund the greater of the proceeds from such sale, the scrap value thereof or the original cost thereof less depreciation in accordance with generally accepted accounting principles, as the case may be, (ii) that in the case of the trade-in of such machinery, equipment or related property for other machinery, equipment or related property not to be installed as a part of the Project, the Company shall pay into the Bond Fund the amount of the greater of the credit received by it in such trade-in or the original cost thereof less depreciation in accordance with generally accepted accounting principles, and (iii) that in the case of the sale of any such machinery, equipment or related property to the Company or in the case of any other disposition thereof, the Company shall pay into the Bond Fund an amount equal to the original cost thereof less depreciation at rates calculated in accordance with generally accepted accounting principles.
The removal of any portion of the Project pursuant to the provisions of this
Section shall not entitle the Company to any diminution in or postponement or
abatement of the rents payable under Section 5.3.
The Company shall promptly report to the Trustee each such removal,
substitution, sale, trade-in or other disposition which, together with other
prior unreported dispositions, in the aggregate results in proceeds under this
Section of $100,000 or more and shall pay to the Trustee such amounts as are
required by the provisions of the preceding subsection (b) of this Section to be
paid into the Bond Fund promptly after the sale, trade-in or other disposition
requiring such payment. The Company shall not remove or permit the removal of
any item constituting the Project except in accordance with the provisions of
this Section.
The Company shall deliver to the Issuer appropriate documents conveying to the Issuer title to any machinery, equipment or related property installed or placed at the Project Site pursuant to this Section, and upon the request of the Company, the Issuer shall deliver, and cause or direct the Trustee to deliver, to the Company appropriate documents
conveying to the Company title to any property removed from the Project Site pursuant to this Section.
(a) upon or with respect to, or shall be or become liens upon, the Project or any portion thereof or any interest of the Issuer or the Company therein or under this Agreement;
(b) upon or with respect to the income or profits of the Issuer from the Project or under this Agreement;
(c) upon or with respect to the possession, operation, management, maintenance, alterations, repair, rebuilding, use or occupancy of the Project or any portion thereof; or
(d) upon this transaction or any document to which the Issuer or the Company is a party creating or transferring an interest or an estate in the Project;
under or by virtue of any present or future law, statute, ordinance, regulation or other requirement of any governmental authority, whether federal, state, county, city, municipal, school or otherwise.
The Company shall, at its sole cost and expense, procure or cause to be procured any and all necessary building permits, other permits, licenses and other authorizations required for the lawful and proper construction, use, occupation, operation and management of the Project. The Company also agrees to pay or cause to be paid all lawful charges (subject to the right of the Company to contest any such charges) for gas, water, sewer, electricity, light, heat, power, telephone and other utility and service used, rendered or supplied to, upon or in connection with
the Project and the Issuer will cooperate with the Company in securing such permits, licenses and authorizations.
The Company may, at its own expense and in its own name and behalf or in the name and behalf of the Issuer, in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assessments and other charges so contested to remain unpaid during the period of such contest and any appeal therefrom. The Issuer shall cooperate fully with the Company in any such contest. If the Company shall fail to pay any of the foregoing items required by this Section to be paid by the Company, the Issuer or the Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Issuer or the Trustee shall become an additional obligation of the Company to the one making the advancement, which amounts, together with interest thereon at the rate of interest borne by the Bonds from the date thereof, the Company agrees to pay.
will fully cooperate with the Company in any effort by the Company to avail itself of any such investment tax credit, but neither the Issuer nor the Trustee shall have any responsibility or liability for the Company's failure to receive any such investment tax credit. The Issuer agrees to cause the Trustee to cooperate in making any investment tax credit available to the Company.
(a) a copy of the instrument of grant or release, and
(b) a written application signed by the president or any vice president of the Company requesting the execution and delivery of such instrument and stating
(i) that such grant or release is not detrimental to the proper conduct of the business of the Company, and
(ii) that such grant or release will not impair the effective use or interfere with the operation of the Project.
(a) any unimproved part of the Project Land (on which none of the components comprising the Project is located but
on which parking, transportation or utility facilities may be located) on which the Issuer proposes to construct improvements for lease or sale under another and different agreement, or
(b) any part of the Project Land with respect to which the Issuer proposes to grant an easement or convey a fee, interest or other title to a railroad or other public or private carrier or to any public utility or public body in order that transportation facilities or services by rail, water, road or other means or utility services for the Project may be provided, increased or improved;
provided, that if at the time any such amendment is made any of the Bonds are outstanding, there shall be deposited with the Trustee the following:
(i) a copy of such amendment as executed;
(ii) a resolution of the Issuer (A) stating that the Issuer is not in default under any of the provisions hereof or of the Indenture and that the Company is not to the knowledge of the Issuer in default under any of the provisions hereof, (B) giving an adequate legal description of that portion of the Project Land to be released, (C) stating the purpose for which the Issuer desires the release, (D) stating that the improvements which will be constructed or the facilities and services which will be provided, increased or improved will be such as will promote at least one of the public purposes of the Issuer and (E) requesting such release;
(iii) a certificate of an officer of the Company approving such amendment together with an officer's certificate stating that the Company is not in default under any of the provisions hereof;
(iv) a copy of the agreement between the Issuer and such person wherein the Issuer agrees to construct improvements on the portion of the Project Land so requested to be released and agrees to lease or sell the same to such person, and wherein such person agrees to lease or purchase the same from the Issuer, or a copy of the instrument granting the easement or conveying the title or other interest to a railroad, public utility or public body; and
(v) a certificate of an Authorized Company Representative dated more than sixty (60) days prior to the date of such amendment and stating that, in the opinion of the person signing such certificate, (A) the portion of the Project Land so proposed to be released is necessary or desirable for railroad, utility services or roads to benefit the Project or is not otherwise needed for the operation of the Project for the purposes hereinabove stated, and (B) the release so proposed to be made will not impair the usefulness of the Project as a facility of a type which the Issuer is authorized to acquire under the laws pursuant to which the Issuer then exists, and will not destroy the means of ingress thereto and egress therefrom.
No release effected under this Section shall entitle the Company to any diminution in or postponement or abatement of the rents payable under Section 5.3.
ARTICLE VII
reimbursement from the Issuer or any abatement, diminution or postponement of the amounts payable under Section 5.3.
(a) the restoration of the Project to substantially the same condition as existed prior to the exercise of such power of eminent domain;
(b) the acquisition, by construction or otherwise, of other solid waste disposal facilities suitable for the Company's operations at the Project Site (which solid waste disposal facilities will be deemed a part of the Project and available for use by the Company and will be leased to the Company hereunder without the payment of any rents other than herein provided to the same extent as if such other improvements were specifically described herein); provided, that such solid waste disposal facilities will be acquired subject to no liens, security interests or encumbrances prior to the lien or security interest afforded by this Agreement and the Indenture, other than Permitted Encumbrances;
(c) redemption of the Bonds in accordance with the provisions of Article VIII of the Indenture; provided, that no part of any such condemnation award may be applied for such redemption unless (1) all of the Bonds are to be redeemed in accordance with the Indenture upon exercise of the option to purchase the Project pursuant to the provisions of Section 8.01(a) of the Indenture, or (2) if less than all of the Bonds are to be redeemed, the Company shall furnish to the Issuer and the Trustee a certificate of the Authorized Company Representative stating (i) that the property forming a part of the Project that was taken in such eminent domain proceeding is not essential to the Company's use or occupancy of the Project, (ii) that the Project has been restored to a condition substantially equivalent to its condition prior to the taking in such eminent domain proceeding, or (iii) that
solid waste disposal facilities have been acquired which are suitable for the Company's operations at the Project as contemplated by the foregoing subsection (b) of this Section; or
(d) payment into the Bond Fund of an amount sufficient to provide for payment in full of the Bonds.
The Issuer shall cooperate fully with the Company in the handling and conduct of any prospective or pending eminent domain proceeding with respect to the Project or any part thereof and shall, to the extent it may lawfully do so, permit the Company to litigate in any such proceeding in the name and on behalf of the Issuer. In no event will the Issuer voluntarily settle, or consent to the settlement of, any prospective or pending eminent domain proceeding with respect to the Project or any part thereof without the written consent of the Company.
ARTICLE VIII
(a) no assignment (other than pursuant to Section 6.5) or sublease shall relieve the Company from primary liability for any of its obligations hereunder, and if any such assignment occurs, the Company shall continue to remain primarily liable for the payment of the rents specified in Section 5.3 and for performance and observance of the other agreements on its part herein provided to be performed and observed by it; and
(b) the Company shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Issuer
and to the Trustee a true and complete copy of each such assignment or sublease, as the case may be, together with any instrument of assumption.
extent that the Bonds are subject to optional redemption in part pursuant to Section 8.01(a) of the Indenture.
(b) The Company shall have the option to purchase the Project by prepaying all of the rents payable under Section 5.3, and the Issuer agrees that the Trustee may accept such prepayment when the same is tendered by the Company, upon giving written notice to the Trustee at least four Business Days prior to the thirtieth day before the date set for redemption, to the extent that the Bonds are subject to optional redemption in whole pursuant to Section 8.01(a) of the Indenture.
(c) The Company shall be obligated to prepay a portion of the rentals payable under Section 5.3, and the Issuer agrees that the Trustee may accept such prepayment when the same is tendered by the Company, to the extent that the bonds are subject to mandatory redemption in part pursuant to Section 8.01(b) of the Indenture.
(d) The Company shall be obligated to purchase the Project by prepaying all of the rents payable under Section 5.3, or to prepay all of the rents payable under Section 5.3 without purchasing the Project, and the Issuer agrees that the Trustee may accept such prepayment when the same is tendered by the Company, to the extent that Bonds are subject to mandatory redemption in whole pursuant to Section 8.01(b) of the Indenture.
(e) The Company shall have the option to purchase the Project by providing for payment of the Bonds pursuant to Article XV of the Indenture.
(f) The Company shall be obligated to purchase, and the Issuer agrees to sell, the Project for ten dollars ($10.00) at the expiration of the Lease Term, following payment in full of the Bonds.
All prepaid rents shall be used for the redemption or purchase of Bonds in the manner and to the extent provided in the Indenture. The options granted to the Company pursuant to this Section shall be and remain prior and superior to the Indenture and may be exercised whether or not there exists an Event of Default hereunder, provided that the existence of such Event of Default will not result in nonfulfillment of any condition to the exercise of any such option. Upon the expiration of the Lease Term, or the sooner termination of the Lease Term, the Issuer will, upon receipt of evidence provided by the Trustee
satisfactory to it that none of the Bonds remain outstanding under the
Indenture, deliver to the Company documents conveying to the Company good and
marketable fee simple title in and to the Project, as the Project then exists,
subject to the following: (a) those liens, security interests and encumbrances
(if any) to which said title in and to the Project was subject when conveyed to
the Issuer, (b) those liens, security interests and encumbrances created by the
Company or to the creation or suffering to which the Company consented, (c)
those liens, security interests and encumbrances resulting from the failure of
the Company to perform or observe any of its agreements contained herein, and
(d) any right and title of any condemning authority.
additional term, the Company will pay to the Board an annual rent of $100, payable in advance on June 1, 2028 and on each June 1 thereafter (except June 1, 2033 on which date such additional term shall end as aforesaid), but otherwise all the terms and conditions of this Agreement shall apply during such additional term; except that the provisions of Sections 7.1 and 7.2 shall not apply and except further that the Company shall not be required to carry any insurance for the benefit of the Trustee, but shall be required to carry insurance under Section 6.13 for the benefit of the Board as its interest may appear. In the event the Company exercises the option to extend the Lease Term granted in this Section 8.7, it shall, at any time after commencement of such additional term, have the right to terminate this Agreement upon giving to the Board notice in writing not less than 10 days prior to the date of termination. At any time during, or at the end of, the extended Lease Term provided for in this Section 8.7, the Company may purchase the Project for $100.
ARTICLE IX
(a) An "Event of Default" occurs and is continuing under the Indenture or under either of the Guarantee Agreements.
(b) Failure by the Company to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder, for a period of ninety (90) days after written notice, specifying such failure and requesting that it be remedied, is given to the Company by the Issuer or the Trustee; provided, however, if the failure stated in the notice cannot be remedied within such period, it shall not constitute an "Event of Default" if corrective action is instituted by the Company within the applicable period and diligently pursued until the default is corrected.
(c) Either Mead or the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of it or of all or a substantial part of its property; (ii) admit in writing its inability, or be generally unable, to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as now or
hereafter in effect), (v) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or adjustment of debts, (vi) fail to controvert in a timely
or appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under said Federal Bankruptcy Code, or
(vii) take any action for the purpose of effecting any of the foregoing.
(d) A proceeding or case shall be commenced, without the application or consent of either Mead or the Company, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding-up, or composition or adjustment of debts, of either Mead or the Company, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of either Mead or the Company or of all or any substantial part of any of their assets, or (iii) similar relief in respect of the Company under any law relating to bankruptcy, insolvency, reorganization, winding- up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or any order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of sixty (60) days from commencement of such proceeding or case or the date of such order, judgment or decree, or an order the Company shall be entered in an involuntary case under said Federal Bankruptcy Code.
(e) The dissolution or liquidation of the Company except as may be permitted by the terms of Section 6.5.
or any other cause or event not reasonably within the control of the Company. The Company agrees, however, to remedy to the extent practicable with all reasonable dispatch the effects of any force majeure preventing the Company from carrying out its agreements; provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Company, and the Company shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Company unfavorable to the Company.
(a) By written notice to the Company, the Issuer may declare all amounts payable hereunder to be immediately due and payable, whereupon the same shall become immediately due and payable;
(b) The Issuer may take whatever action at law or in equity may appear necessary or desirable to collect the amounts referred to in (a) above then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Company under this Agreement.
Any amounts collected pursuant to action taken under this Section 9.2 shall be paid into the Bond Fund and applied in accordance with the provisions of the Indenture or, if the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the provisions of the Indenture) and the fees and expenses of the Trustee and the Paying Agents and all other amounts required to be paid under the Indenture shall have been paid, to the Company.
may be) the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Issuer.
ARTICLE X
Agreement shall, to the extent provided in the Indenture, belong to and be paid to the Company by the Trustee.
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement to be executed in their respective corporate names and their respective corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the date first above written.
THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PHENIX
CITY, ALABAMA
(Seal)
By: /S/ Kenneth A. Roberts ------------------------------------- Chairman Attest: /S/ Sonny Dyson ---------------------------------- Secretary |
MEAD COATED BOARD, INC.
(Seal)
By: /S/ William R. Graber ------------------------------------- Title: Treasurer Attest: /S/ Jeffrey L. Hayman ---------------------------------- Title: Secretary |
STATE OF GEORGIA:
: SS.
COUNTY OF MUSCOGEE:
On this 2nd day of June, 1993, before me appeared Kenneth A. Roberts, to me personally known, who being by me duly sworn, did say that he is Chairman of The Industrial Development Board of the City of Phenix City, Alabama and that the seal affixed to the foregoing Lease Agreement is the sale of The Industrial Development Board of the City of Phenix City, Alabama and that the foregoing Lease Agreement was signed and sealed on behalf of The Industrial Development Board of the City of Phenix City, Alabama, and the said Chairman acknowledges the execution of the foregoing Lease Agreement as the free act and deed of The Industrial Development Board of the City of Phenix City, Alabama.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Linda Boyd ----------------------------------- Notary Public |
[NOTARIAL SEAL] My Commission Expires: My Commission Expires Dec. 17, 1996 -41- |
STATE OF OHIO : : SS |
COUNTY OF MONTGOMERY:
On this 8th day of June, 1993, before me appeared William R. Graber, to me personally known, who, being by me duly sworn, did say that he is Treasurer of Mead Coated Board, Inc., a Delaware corporation, qualified to do business in the State of Alabama, and that the seal affixed to the foregoing Lease Agreement is the seal of Mead Coated Board, Inc., and that the foregoing Lease Agreement was signed and sealed on behalf of Mead Coated Board, Inc. by authority of its board of directors, and the said Treasurer acknowledges the execution of the foregoing Lease Agreement as the free act and deed of Mead Coated Board, Inc.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Jeffrey L. Hayman ----------------------------------- Notary Public My Commission Expires: |
[NOTARIAL SEAL] JEFFREY L. HAYMAN ATTORNEY-AT-LAW NOTARY PUBLIC - STATE OF OHIO LIFETIME COMMISSION SECTION 147.03 R. C. |
EXHIBIT A
PROJECT LAND
The Project Land includes the following property:
All that portion of land, and structures lying thereon, in Section 28, T14N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 794,023.97, E 232,940.10 of the West Zone of the State of Georgia Coordinate System; thence S 52(degrees) 11' 16" E 381.63' to the point of beginning (N 793,790.00 E 233,241.60); thence N 90(degrees) 00' 00" E 760.00'; thence S 0(degrees) 00' 00" E 102.00'; thence N 90(degrees) 00' 00" E 128.04'; thence S 0(degrees) 00' 00" E 960.48' (at existing utility bridge); the N 90(degrees) 00' 00" W 13.00'; thence N 0(degrees) 00' 00" W 672.48'; thence N 90(degrees) 00' 00 W 875.04'; thence N 0(degrees) 00' 00" E 390.00' to the point of beginning; said land being 7.85(plus or minus) acres; less than and except any structures not included in the Mead Corporation Contract No. 21-4162;
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Board Premises (such part of the land leased to Georgia Kraft Company by the Issuer pursuant to a Lease Agreement dated as of July 1, 1977 (the "1977 Lease"), which is more specifically described in Exhibit A to the 1977 Lease, less and except the Project Land, is hereinafter referred to as the "Board Premises") in order to provide all necessary or convenient ingress or egress between the Project Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the Project Land and the Board Premises;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Board Premises necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the Project Land to the Board Premises,
including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Board Premises, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Project Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Board Premises; and
(d) An easement and right to create and maintain upon the Board Premises encroachments of equipment, structures or other improvements which will be included on the Project Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Board Premises;
but subject to the following easements over the Project Land in favor of the Board Premises:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Project Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Board Premises and between the Board Premises and the Project Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Board Premises;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the Project Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Board Premises to another or between the Board Premises and the Project Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Board Premises in order to permit and facilitate the operation of any facilities located on the Board Premises;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Project Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Board Premises, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Project Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Board Premises as encroachments upon the Project Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the Project Land in respect of any additional improvements constructed adjacent to the Project Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the Project Land.
EXHIBIT "B"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of June 1, 1993
PROJECT SUMMARY
Mead Coated Board, Inc. presently operates a coated natural kraft paperboard mill (the "Mill") in Russell County, Alabama, near the City of Phenix City, Alabama.
The Project consists of the acquisition, construction and installation of the No. 2 Recycle Plant (the "Recycle Plant") at the Mill and certain related facilities. The Recycle Plant is a 350 ton per day ("TPD") recycled fiber facility. The material to be recycled is waste paper and consists of old corrugated containers (made from kraft liner and corrugated medium) and other similar waste paper.
The major components of the Project are as follows:
covered bale storage building with rail and truck
unloading docks;
open bale storage slab;
clamp trucks and forklifts;
process building with maintenance crane;
pulper feed conveyor and pulper;
junk tower with clam shell hoist;
ragger with tail cutter;
detrashing unit;
screen;
high density cleaners;
primary coarse screen;
light rejects separator;
tailings screen;
medium density cleaners;
primary fine screens;
secondary fine screen;
tertiary fine screen;
primary cleaners;
secondary cleaners;
thickener;
high density storage tank;
clarifying system;
sludge pre-thickener;
separator;
reject press;
sludge press;
self-cleaning bar screen;
rejects conveyor;
dump trucks;
process pumps, tanks, and tile chests;
recycled stock chest (allocated portion);
piping;
water supply systems;
waste water treatment systems;
distributed control system; and
electrical control system.
EXHIBIT "C"
REQUISITION AND CERTIFICATION
Request No. ______ Date: ____________ TO: Citibank, N.A., as Trustee 120 Wall Street, 13th Floor New York, New York 10043 |
Attention: Corporate Trust Department
The undersigned Authorized Company Representative designated pursuant to the terms of a Lease Agreement, dated as of June 1, 1993 (the "Agreement"), between and among The Industrial Development Board of the City of Phenix City, Alabama, a public corporation created and existing under the laws of the State of Alabama (the "Issuer"), and Mead Coated Board, Inc., a Delaware corporation (the "Company"), hereby requests that there be paid from the "Project Fund" (herein below described) the sum of $___________ and in that connection, DOES HEREBY CERTIFY, as follows:
1. The requested payment has been properly incurred and is a proper charge against The Industrial Development Board of the City of Phenix City, Alabama Project Fund -- Mead Coated Board Project, Series 1993A and has not been the basis of any previous withdrawal from said Project Fund.
2. Payment should be made to:
Name:
Address or Wire Instructions:
3. The purpose and circumstances of such obligation are as follows:
4. Payment of such obligation will not result in less than 95% of the total proceeds of the sale of the "Bonds" (defined in the Agreement) deposited with the Project Fund
expended as of the date hereof having been used to pay "Exempt Costs" (as defined in the Agreement).
This ____ day of ________, 19__.
MEAD COATED BOARD, INC.
By: _________________________________
Authorized Company Representative
LEASE AGREEMENT
between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
Dated as of June 1, 1993
The Lease Agreement and all right, title and interest of The Industrial Development Board of the City of Phenix City, Alabama in any rental payments and other receipts and revenues derived under this Lease Agreement have been assigned to AmSouth Bank N.A., as Trustee under the Trust Indenture, dated as of even date herewith, from The Industrial Development Board of the City of Phenix City, Alabama, which secures $48,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A and Additional Bonds as permitted and provided for under said Trust Indenture.
This instrument prepared by:
Thompson, Hine and Flory 312 Walnut Street 14th Floor Cincinnati, Ohio 45202
(The Table of Contents for this Lease Agreement is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of this Lease Agreement.)
Page ---- ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION....................... 1 Section 1.1 - Definitions................................. 1 Section 1.2 - Rules of Construction....................... 5 ARTICLE II REPRESENTATIONS AND WARRANTIES.............................. 5 Section 2.1 - Representations and Warranties by the Board....................................... 5 Section 2.2 - Representations and Warranties by the Company..................................... 7 ARTICLE III LEASING CLAUSES AND TITLE................................... 9 Section 3.1 - Lease of the Project........................ 9 Section 3.2 - Warranty of Title........................... 9 Section 3.3 - Quiet Enjoyment............................. 9 ARTICLE IV COMPLETION OF THE PROJECT FACILITIES; ISSUANCE OF THE BONDS................................................... 9 Section 4.1 - Agreement to Acquire, Construct and Install the Project Facilities.............. 9 Section 4.2 - Agreement to Issue Bonds; Application of Bond Proceeds............................... 10 Section 4.3 - Company Required to Pay Costs if Project Fund Insufficient........................... 10 Section 4.4 - Board to Pursue Remedies Against Suppliers, Contractors and Subcontractors and Their Sureties.................................... 11 Section 4.5 - Issuance of Additional Bonds................ 11 ARTICLE V EFFECTIVE DATE OF THIS AGREEMENT; DURATION OF LEASE TERM; RENTAL PROVISIONS..................................... 12 Section 5.1 - Effective Date of This Agreement; Duration of Lease Term............................... 12 Section 5.2 - Delivery and Acceptance of Possession....... 12 Section 5.3 - Rents and Other Amounts Payable............. 12 Section 5.4 - Place of Rental Payments.................... 13 Section 5.5 - Obligations of Company Hereunder Absolute and Unconditional........................... 13 Section 5.6 - Company's Performance Under Indenture....... 14 Section 5.7 - Payments in Lieu of Taxes................... 14 ARTICLE VI MAINTENANCE, MODIFICATION, TAXES AND INSURANCE............. 15 Section 6.1 - Maintenance and Modification of Project Facilities by Company....................... 15 Section 6.2 - Removal of Portions of Project.............. 16 |
Section 6.3 - Taxes, Other Governmental Charges and Utility Charges............................. 17 Section 6.4 - Insurance Required.......................... 18 Section 6.5 - Application of Net Proceeds of Insurance.... 18 Section 6.6 - Additional Provisions Respecting Insurance.. 18 Section 6.7 - Other Board Expenses........................ 18 Section 6.8 - Advances by Board or Trustee................ 19 Section 6.9 - Indemnification of Board and Trustee........ 19 Section 6.10 - Investment Credit........................... 20 ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION........................ 20 Section 7.1 - Damage and Destruction...................... 20 Section 7.2 - Condemnation................................ 20 Section 7.3 - Condemnation of Company-Owned Property...... 21 Section 7.4 - Further Assurances and Corrective Instruments................................. 21 ARTICLE VIII SPECIAL AGREEMENTS.......................................... 21 Section 8.1 - No Warranty of Condition or Suitability by the Board................................... 21 Section 8.2 - Inspection of the Project................... 22 Section 8.3 - Company to Maintain Its Corporate Existence; Exceptions Permitted............. 22 Section 8.4 - Qualification in the State.................. 22 Section 8.5 - Granting of Easements....................... 22 Section 8.6 - Release of Certain Land..................... 23 ARTICLE IX ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING; REDEMPTION; RENT PREPAYMENT AND ABATEMENT................... 24 Section 9.1 - Assignment and Subleasing................... 24 Section 9.2 - Pledge under Indenture...................... 25 Section 9.3 - Restrictions on Sale of Project by Board.... 25 Section 9.4 - Redemption of Bonds......................... 25 Section 9.5 - Prepayment of Rents......................... 25 Section 9.6 - Rent Abatements if Bonds Paid Prior to Maturity.................................... 26 Section 9.7 - Reference to Bonds Ineffective After Bonds Paid........................................ 26 ARTICLE X EVENTS OF DEFAULT AND REMEDIES.............................. 26 Section 10.1 - Events of Default Defined................... 26 Section 10.2 - Remedies.................................... 27 Section 10.3 - No Remedy Exclusive......................... 28 Section 10.4 - Agreement to Pay Attorneys' Fees and Expenses.................................... 28 Section 10.5 - No Additional Waiver Implied by One Waiver...................................... 28 Section 10.6 - Waiver of Appraisement, Valuation, etc...... 28 Section 10.7 - Waiver of Events of Default................. 29 |
ARTICLE XI OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE PROJECT..................................................... 29 Section 11.1 - General Option to Prepay Rent and Purchase Project............................ 29 Section 11.2 - Conveyance on Purchase...................... 30 Section 11.3 - Relative Positions of Options and Indenture................................... 30 ARTICLE XII MISCELLANEOUS............................................... 30 Section 12.1 - Notices..................................... 30 Section 12.2 - Binding Effect.............................. 31 Section 12.3 - Severability................................ 31 Section 12.4 - Amounts Remaining in Bond Fund.............. 31 Section 12.5 - Amendments, Changes and Modifications....... 31 Section 12.6 - Execution Counterparts...................... 31 Section 12.7 - Captions.................................... 31 Section 12.8 - Recording of Agreement...................... 31 Section 12.9 - Law Governing Construction of Agreement..... 32 Section 12.10 - Net Lease................................... 32 EXHIBIT "A" - DESCRIPTION OF PROJECT LAND................................. A-1 EXHIBIT "B" - PROJECT SUMMARY............................................. B-1 |
LEASE AGREEMENT
between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
Dated as of June 1, 1993
This Lease Agreement and all right, title and interest of The Industrial Development Board of the City of Phenix City, Alabama in any rental payments and other receipts and revenues derived under this Lease Agreement have been assigned to AmSouth Bank N.A., as Trustee under the Trust Indenture, dated as of even date herewith, from The Industrial Development Board of the City of Phenix City, Alabama, which secures $48,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A and Additional Bonds as permitted and provided for under said Trust Indenture.
This instrument prepared by:
Thompson, Hine and Flory 312 Walnut Street 14th Floor Cincinnati, Ohio 45202
(The Table of Contents for this Lease Agreement is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of this Lease Agreement.)
Page ---- ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION....................... 1 Section 1.1 - Definitions................................. 1 Section 1.2 - Rules of Construction....................... 5 ARTICLE II REPRESENTATIONS AND WARRANTIES.............................. 5 Section 2.1 - Representations and Warranties by the Board....................................... 5 Section 2.2 - Representations and Warranties by the Company..................................... 7 ARTICLE III LEASING CLAUSES AND TITLE................................... 9 Section 3.1 - Lease of the Project........................ 9 Section 3.2 - Warranty of Title........................... 9 Section 3.3 - Quiet Enjoyment............................. 9 ARTICLE IV COMPLETION OF THE PROJECT FACILITIES; ISSUANCE OF THE BONDS................................................... 9 Section 4.1 - Agreement to Acquire, Construct and Install the Project Facilities.............. 9 Section 4.2 - Agreement to Issue Bonds; Application of Bond Proceeds............................... 10 Section 4.3 - Company Required to Pay Costs if Project Fund Insufficient........................... 10 Section 4.4 - Board to Pursue Remedies Against Suppliers, Contractors and Subcontractors and Their Sureties.................................... 11 Section 4.5 - Issuance of Additional Bonds................ 11 ARTICLE V EFFECTIVE DATE OF THIS AGREEMENT; DURATION OF LEASE TERM; RENTAL PROVISIONS..................................... 12 Section 5.1 - Effective Date of This Agreement; Duration of Lease Term............................... 12 Section 5.2 - Delivery and Acceptance of Possession....... 12 Section 5.3 - Rents and Other Amounts Payable............. 12 Section 5.4 - Place of Rental Payments.................... 13 Section 5.5 - Obligations of Company Hereunder Absolute and Unconditional........................... 13 Section 5.6 - Company's Performance Under Indenture....... 14 Section 5.7 - Payments in Lieu of Taxes................... 14 ARTICLE VI MAINTENANCE, MODIFICATION, TAXES AND INSURANCE.............. 15 Section 6.1 - Maintenance and Modification of Project Facilities by Company....................... 15 Section 6.2 - Removal of Portions of Project.............. 16 |
Section 6.3 - Taxes, Other Governmental Charges and Utility Charges............................. 17 Section 6.4 - Insurance Required.......................... 18 Section 6.5 - Application of Net Proceeds of Insurance.... 18 Section 6.6 - Additional Provisions Respecting Insurance.. 18 Section 6.7 - Other Board Expenses........................ 18 Section 6.8 - Advances by Board or Trustee................ 19 Section 6.9 - Indemnification of Board and Trustee........ 19 Section 6.10 - Investment Credit........................... 20 ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION........................ 20 Section 7.1 - Damage and Destruction...................... 20 Section 7.2 - Condemnation................................ 20 Section 7.3 - Condemnation of Company-Owned Property...... 21 Section 7.4 - Further Assurances and Corrective Instruments................................. 21 ARTICLE VIII SPECIAL AGREEMENTS.......................................... 21 Section 8.1 - No Warranty of Condition or Suitability by the Board................................... 21 Section 8.2 - Inspection of the Project................... 22 Section 8.3 - Company to Maintain Its Corporate Existence; Exceptions Permitted............. 22 Section 8.4 - Qualification in the State.................. 22 Section 8.5 - Granting of Easements....................... 22 Section 8.6 - Release of Certain Land..................... 23 ARTICLE IX ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING; REDEMPTION; RENT PREPAYMENT AND ABATEMENT................... 24 Section 9.1 - Assignment and Subleasing................... 24 Section 9.2 - Pledge under Indenture...................... 25 Section 9.3 - Restrictions on Sale of Project by Board.... 25 Section 9.4 - Redemption of Bonds......................... 25 Section 9.5 - Prepayment of Rents......................... 25 Section 9.6 - Rent Abatements if Bonds Paid Prior to Maturity.................................... 26 Section 9.7 - Reference to Bonds Ineffective After Bonds Paid........................................ 26 ARTICLE X EVENTS OF DEFAULT AND REMEDIES.............................. 26 Section 10.1 - Events of Default Defined................... 26 Section 10.2 - Remedies.................................... 27 Section 10.3 - No Remedy Exclusive......................... 28 Section 10.4 - Agreement to Pay Attorneys' Fees and Expenses.................................... 28 Section 10.5 - No Additional Waiver Implied by One Waiver...................................... 28 Section 10.6 - Waiver of Appraisement, Valuation, etc...... 28 Section 10.7 - Waiver of Events of Default................. 29 |
ARTICLE XI OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE PROJECT..................................................... 29 Section 11.1 - General Option to Prepay Rent and Purchase Project............................ 29 Section 11.2 - Conveyance on Purchase...................... 30 Section 11.3 - Relative Positions of Options and Indenture................................... 30 ARTICLE XII MISCELLANEOUS............................................... 30 Section 12.1 - Notices..................................... 30 Section 12.2 - Binding Effect.............................. 31 Section 12.3 - Severability................................ 31 Section 12.4 - Amounts Remaining in Bond Fund.............. 31 Section 12.5 - Amendments, Changes and Modifications....... 31 Section 12.6 - Execution Counterparts...................... 31 Section 12.7 - Captions.................................... 31 Section 12.8 - Recording of Agreement...................... 31 Section 12.9 - Law Governing Construction of Agreement..... 32 Section 12.10 - Net Lease................................... 32 EXHIBIT "A" - DESCRIPTION OF PROJECT LAND................................. A-1 EXHIBIT "B" - PROJECT SUMMARY............................................. B-1 |
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into as of June 1, 1993, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public corporation organized and existing under the laws of the State of Alabama, as lessor, and MEAD COATED BOARD, INC. (the "Company"), a corporation organized and existing under the laws of the State of Delaware and qualified to do business in the State of Alabama, as lessee;
WITNESSETH:
In consideration of the respective representations and agreements hereinafter contained, the Board and the Company agree as follows (provided, that in the performance of the agreements of the Board herein contained, any obligation it may thereby incur for the payment of money shall not be a general debt on its part but shall be payable solely out of the rents, payments and revenues derived from this Lease Agreement, the sale of the "Bonds" as hereinafter defined, the insurance and condemnation awards herein described and any other revenues arising out of or in connection with its ownership of the "Project" as hereinafter defined):
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 - Definitions. In addition to the words and terms elsewhere defined herein, the following words and terms as used herein shall have the following meanings unless the context or use clearly indicates another or different meaning or intent, and any other words and terms defined in the Indenture shall have the same meanings when used herein as assigned them in the Indenture unless the context or use clearly indicates another or different meaning or intent:
"Act" means the statutes codified as Code of Alabama 1975, Title 11, Chapter 54, Article 4, as amended and supplemented and at the time in force and effect;
"Additional Bonds" means the bonds of any series, other than the Bonds, authorized under the Indenture and authenticated and delivered in accordance with Section 401 of the Indenture.
"Agreement" means this Lease Agreement as it now exists and as it may hereafter be amended pursuant to Section 12.5 of this Lease Agreement and Article XV of the Indenture;
"Authorized Board Representative" means the person at the time designated to act on behalf of the Board by written certificate furnished to the Company and the Trustee containing the specimen signature of such person and signed on behalf of the Board by its Chairman or Vice Chairman. Such certificate may designate an alternate or alternates;
"Authorized Company Representative" means the person at the time designated to act on behalf of the Company by written certificate furnished to the Board and the Trustee containing the specimen signature of such person and signed on behalf of the Company by the President or any Vice President of the Company. Such certificate may designate an alternate or alternates;
"Board" means The Industrial Development Board of the City of Phenix City, Alabama, a public corporation of the State, and its successors and assigns;
"Bond Fund" means the Bond principal and interest payment fund created pursuant to Section 702 of the Indenture and within which have been established a general account and a special account. Any reference herein to the "Bond Fund" without further limitation or explanation shall be deemed to be a reference to the general account in the Bond Fund;
"bondholder" or "holder of the Bonds" means the registered owner of any Bond;
"Bonds" means the $48,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A, issued pursuant to the Indenture;
"City" means the City of Phenix City, Alabama, a municipal corporation of the State;
"Company" means the corporation designated as such in the first paragraph hereof and its successors and assigns, including any surviving, resulting or transferee corporation as provided in Section 8.3;
"default" means an event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default;
"Event of Default" means one of the events so denominated and described in Section 10.1;
"Government Obligations" means (a) direct obligations of the United States of America, (b) obligations unconditionally guaranteed by the United States of America and (c) securities or receipts evidencing ownership interests in obligations or specified portions (such as principal or interest) of obligations described in (a) or (b);
"Indenture" means the Trust Indenture, of even date herewith, between the Board and the Trustee, including any indenture supplemental thereto;
"Lease Term" means the duration of the leasehold interest created hereby as specified in Section 5.1;
"Net Proceeds", when used with respect to any insurance or condemnation award, means the gross proceeds from the Insurance or condemnation award with respect to which that term is used remaining after payment of all expenses ( including attorneys' fees and any Extraordinary Expenses of the Trustee as defined in the Indenture) incurred in the collection of such gross proceeds;
"Notes" means those unpaid and outstanding industrial development notes issued by the Board, pursuant to resolutions of the Board to finance the costs of the Project;
"payment in full of the Bonds" specifically encompasses the situations described in Article X of the Indenture;
"Permitted Encumbrances" means, as of any particular time,
(a) liens for ad valorem taxes, special assessments or other governmental charges not then delinquent or permitted to exist as provided in Section 6.3;
(b) this Agreement and the security interests created herein;
(c) such utility, access or other easements and rights-of-way, restrictions, reservations, reversions and exceptions as the Authorized Company Representative certifies will not materially interfere with or impair the operation of the Project (or, if it is not being operated, the operations for which it was designed or last modified);
(d) unfiled and inchoate mechanics' and materialmen's liens for construction work in progress;
(e) mechanics', materialmen's, suppliers' and vendors' liens or other similar liens not then payable, and those permitted to exist as provided in Section 6.1;
(f) such minor defects, irregularities, encumbrances, easements, rights-of-ways and clouds on title as the Authorized Company Representative certifies do not, in the aggregate, materially impair the property affected thereby for the purpose for which it was acquired or is held by the Board or the Company;
(g) that certain Lease Agreement dated as of July 1, 1980 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(h) that certain Lease Agreement dated as of November 1, 1983 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement
dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(i) that certain Lease Agreement dated as of December 1, 1983 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft and the Company;
(j) that Certain Lease Agreement dated as of December 1, 1988 between the Company and the Board executed in connection with the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988;
(k) that certain Lease Agreement dated as of December 1, 1988 between the Company and the Board in connection with the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A and other bonds of the Board, as amended and supplemented from time to time;
(l) that certain Lease Agreement dated as of September 1, 1990 between the Company and the Board in connection with the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1990A; and
(m) that certain Lease Agreement dated as of October 1, 1990 between the Company and the Board in connection with the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1990B;
"person" means natural persons, firms, associations, corporations and public bodies;
"Project" means the Project Land and the Project Facilities, as they may at any time exist;
"Project Facilities" means the facilities acquired, constructed and installed with proceeds from the sale of the Notes, to the extent such Notes are refunded from the proceeds of the sale of the Bonds, as they may at any time exist. The Project Facilities are more fully described in the Project Summary;
"Project Fund" means the fund created pursuant to Section 601 of the Indenture;
"Project Land" means the real property described in Exhibit "A" attached hereto and by this reference made a part hereof, less such real property as may be released from this Agreement pursuant to Section 8.6 or taken by the exercise of the power of eminent domain as provided in Section 7.2;
"Project Summary" means the Project Summary prepared by the Company,
entitled "PROJECT SUMMARY - INDUSTRIAL FACILITIES-MEAD COATED BOARD, INC.
COATED LINERBOARD MILL", a copy of which is
attached hereto as Exhibit "B" and by this reference made a part hereof, including any amendments thereto made pursuant to the terms thereof;
"security interest" or "security interests" shall refer to the security interests created herein and in the Indenture and shall have the meaning set forth in the Uniform Commercial Code of the State;
"State" means the State of Alabama;
"Trustee" means AmSouth Bank N.A., or any co-trustee or any successor trustee under the indenture.
Section 1.2 - Rules of Construction. Unless the context clearly indicates to the contrary:
(a) "Herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this Agreement and not solely to the particular Article, Section or subdivision hereof in which such word is used.
(b) Words importing the singular number shall include the plural number and vice versa, and any pronoun used herein shall be deemed to cover all genders.
(c) All references herein to particular Articles or Sections are references to Articles or Sections of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 - Representations and Warranties by the Board. The Board makes the following representations and warranties as the basis for the undertakings on its part herein contained:
valid and binding agreements enforceable against the Board in accordance with their respective terms.
notification referred to in (i) of the preceding sentence and the Director of the Alabama Securities Commission has issued a Certificate of Notification applicable to the Bonds, which Certificate of notification has not seen revoked or rescinded and is in full force and effect.
Section 2.2 - Representations and Warranties by the Company. The Company makes the following representations and warranties as the basis for the undertakings on its part herein contained:
(a) The Company (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
(ii) has all requisite corporate power and authority to carry on its
business as now being conducted and as presently proposed to be
conducted, and (ii) has duly qualified and is authorized to do
business and is in good standing as a foreign corporation in the
State.
(b) The Company has the corporate power and has been duly authorized to enter into this Agreement and to perform all of its obligations hereunder and thereunder.
(c) The willingness of the Board to issue the Bonds for purposes of financing costs of acquiring, constructing, and
installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Project will create or preserve jobs and employment opportunities within the boundaries of the State of Alabama, thereby improving the economic welfare of the State of Alabama and the City.
(e) The acquisition, construction, and installation of any part of the Project was not commenced, and no item which constitutes a part of the Project was ordered, prior to the date of the resolution referred to in Section 2.1(h) above that refers to such part of the Project.
(f) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Agreement, or performing any of its obligations hereunder; and the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(g) The acquisition, construction, and installation of the Project will comply in all material respects with all applicable zoning, planning, building, environmental and other regulations of the governmental authorities having jurisdiction of the Project, and all necessary permits, licenses, consents and permissions necessary for the Project have been or will be obtained.
(h) The acquisition, construction, and installation of the Project as well as its intended use and operation are in complete conformance with the purposes and provisions of the Act.
(i) No event has occurred and no condition exists that would constitute an "Event of Default" under this Agreement which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under this Agreement.
(j) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to
materially and adversely affect the ability of the Company to perform its obligations under this Agreement.
ARTICLE III
LEASING CLAUSES AND TITLE
Section 3.1 - Lease of the Project. The Board hereby leases to the Company, and the Company hereby leases from the Board, the Project at the rent set forth in Sections 5.3 and 5.7 and in accordance with the provisions hereof.
Section 3.2 - Warranty of Title. The Board for itself, its successors and assigns, warrants to the Company, its successors and assigns, that it has good and marketable fee simple title in and to the Project Land free from all encumbrances except Permitted Encumbrances. Upon the execution and delivery of this Agreement, the Board agrees that it will furnish to the Company an opinion of the Board's counsel stating that the Board holds such title in and to the Project Land.
Section 3.3 - Quiet Enjoyment. The Board warrants and covenants that it will defend the Company in the quiet enjoyment and peaceable possession of the Project, and all appurtenances thereto belonging, free from all claims of all persons whomsoever, throughout the Lease Term, so long as the Company shall perform the covenants, conditions and agreements to be performed by it hereunder, or so long as the period for remedying any default in such performance shall not have expired.
ARTICLE IV
COMPLETION OF THE PROJECT FACILITIES;
ISSUANCE OF THE BONDS
Section 4.1 - Agreement to Acquire, Construct and Install the Project Facilities. The Board agrees that it will cause the Project Facilities to be acquired, constructed and installed on the Project Land, wholly within the boundary lines thereof. The acquisition, construction and installation of the Project Facilities will be in accordance with the Project Summary, a copy of which is on file with the Board and the Trustee.
The Board agrees that it will enter into, or accept the assignment of, such contracts as the Company may request in order to effectuate the purposes of this Section but that it will not execute any other contract or give any order for construction or for the acquisition and installation of any equipment relating to the Project Facilities, unless and until the Authorized Company Representative shall have approved the same in writing.
The Board hereby makes, constitutes and appoints the Company and The Mead Corporation as its true, lawful and agents for the acquisition, construction and installation of the Project Facilities, and the Company and The Mead Corporation have accepted such agency to act and do all things on behalf of the Board, to perform all acts and agreements of the Board hereinbefore provided in this Section, and to bring any actions or proceedings against any person which the Board might bring with respect thereto as the Company and the Mead Corporation shall deem proper. The Board hereby ratifies and confirms all actions of, and assumes and adopts all contracts entered into by, the Company and The Mead Corporation with respect to the Project Facilities prior to the date hereof. This appointment of the Company and The Mead Corporation to act as agents and all authority hereby conferred or granted is conferred and granted irrevocably until all activities in connection with the acquisition, construction and installation of the Project Facilities shall have been completed, and shall not be terminated prior thereto by act of the Board or of the Company and The Mead Corporation. So long as the Company is not in default hereunder, upon the completion of the Project (or at any time prior or subsequent thereto upon the request of the Company) the Board will assign to the Company all warranties and guarantees of all contractors, subcontractors, suppliers, architects and engineers for the furnishing of labor, materials or equipment or supervision or design in connection with the Project Facilities and any rights or causes of action arising from or against any of the foregoing.
Section 4.2 - Agreement to Issue Bonds; Application of Bond Proceeds. In order to provide funds for the payment of the cost of the acquisition, construction and installation of the Project Facilities through the refunding of the Notes, the Board agrees that it will authorize, sell and deliver the Bonds to the initial purchasers thereof. Upon receipt of the proceeds from the sale of the Bonds, the Board will deposit all accrued interest (if any) received upon the sale of the Bonds in the Bond Fund and will deposit the balance of the proceeds from said sale to the Project Fund, to be applied to the payment of the Notes upon receipt by the Trustee of Notes tendered for cancellation.
Section 4.3 - Company Required to Pay Costs if Project Fund Insufficient. If the moneys in the Project Fund available for payment of the costs of the Project Facilities should not be sufficient to pay the costs thereof in full, and if Additional Bonds are not issued to finance the completion of the Project Facilities, the Company agrees to complete the Project Facilities and to pay all that portion of the costs of the Project Facilities as may be in excess of the moneys available therefor in the Project Fund. The Board does not make any warranty, either express or implied, that the moneys which will be paid into the Project Fund and which, under the provisions hereof, will be available for payment of the costs of refunding the Notes, will be sufficient to pay all the costs which will be incurred in that connection. The Company agrees that if after exhaustion of the moneys in the Project Fund the Company should pay any portion of the costs of
refunding the Notes pursuant to the provisions of this Section, it shall not be entitled to any reimbursement therefor from the Board or from the Trustee or from the holders or owners of any of the Bonds, nor shall it be entitled to any diminution in or postponement or abatement of the rents payable under Section 5.3.
Section 4.4 - Board to Pursue Remedies Against Suppliers, Contractors and Subcontractors and Their Sureties. At the direction and sole cost of the Company, the Board will promptly proceed, either separately or in conjunction with others, to exhaust the remedies of the Board against any defaulting supplier, contractor or subcontractor and against any surety therefor, for the performance of any contract made in connection with the Project Facilities. If the Company shall so notify the Board, the Company may, in its own name or in the name of the Board, prosecute or defend any action or proceeding or take any other action involving any such supplier, contractor, subcontractor or surety which the Company deems reasonably necessary, and in such event the Board agrees to cooperate fully with the Company and to take all action necessary, to the extent it might lawfully do so, to effect the substitution of the Company for the Board in any such action or proceeding. Any moneys recovered by way of damages, refunds, adjustments or otherwise in connection with the foregoing shall be paid to the Bond Fund.
Section 4.5 - Issuance of Additional Bonds. So long as there shall not have occurred and be continuing an event of default hereunder or under the Indenture, the Board shall, from time to time at the request of the Company, use its best efforts to issue Additional Bonds in aggregate principal amounts as requested by the Company under the terms and conditions provided herein and in the Indenture, but in no event shall the Board be liable for not issuing Additional Bonds. Additional Bonds may be issued to finance the (a) payment of outstanding Notes, (b) refunding all of the Bonds of any one or more series then outstanding, (c) payment of costs of the Project or (d) any combination of the foregoing; provided, in any case, that either prior to or contemporaneously with the issuance of Additional Bonds (i) the terms, conditions, manner of issuance, purchase price, delivery and contemplated disposition of the proceeds of the sale of such Additional Bonds shall have been approved in writing by the President or any Vice President of the Company, and (ii) the conditions specified in Article IV of the Indenture with respect to the issuance of such Additional Bonds shall have been satisfied.
ARTICLE V
EFFECTIVE DATE OF THIS AGREEMENT;
DURATION OF LEASE TERM; RENTAL PROVISIONS
Section 5.1 - Effective Date of This Agreement; Duration of Lease Term. This Agreement shall become effective upon its execution and delivery and the leasehold interest created hereby
shall then begin and, unless sooner terminated or extended under the provisions hereof (including particularly Articles X and XI), shall expire upon the latter to occur of the following events: (i) midnight, June 1, 2033, or (ii) payment in full of all Bonds and any Additional Bonds.
Section 5.2 - Delivery and Acceptance of Possession. The Board agrees to deliver to the Company sole and exclusive possession of the Project (subject to the right of the Trustee to enter thereon for inspection purposes and to the other provisions of Section 8.2) on the Completion Date and the Company agrees to accept possession of the Project upon such delivery; provided, however, that the Company shall be permitted such possession of the Project prior to the Completion Date as shall not interfere with the acquisition, construction and installation of the Project Facilities.
Section 5.3 - Rents and Other Amounts Payable. On December 1, 1993, and June 1 and December 1 in each year thereafter until payment in full of the Bonds, the Company shall pay to the Trustee, for the account of the Board, as rent for the Project, a sum of money equal to the amount payable on such date as principal of and interest on the Bonds, as provided in the Indenture. In any event, on each date on which a payment of principal or interest is payable on the Bonds, if at any such date the amount of money available in the Bond Fund is insufficient to make required payments of principal and interest on such date, the Company shall forthwith pay to the Trustee, in immediately available funds, the amount of any such deficiency.
Anything herein to the contrary notwithstanding, any amount of money at any time held by the Trustee in the Bond Fund shall be credited against the next succeeding payment of rent and shall reduce the payment to be then made by the Company; and further, if, and for so long as, the amount held by the Trustee in the Bond Fund should be sufficient to pay at the times required the principal of and the interest on all Bonds then remaining unpaid, the Company shall not be obligated to make any further rental payments under the provisions of this Section.
The Company agrees to pay to the Trustee until the principal of and the interest on the Bonds shall have been paid in full (i) an amount equal to the annual fee of the Trustee for the Ordinary Services of the Trustee rendered and its Ordinary Expenses incurred under the Indenture, (ii) the reasonable fees and charges of the Trustee and any other paying agent for acting as paying agent and as bond registrar and the reasonable fees of Trustee's counsel as provided in the Indenture, as and when the same become due, and (iii) the reasonable fees and charges of the Trustee for Extraordinary Services rendered by it and Extraordinary Expenses incurred by it, as such terms are defined in the Indenture, as and when the same become due; provided, that the Company may, without precipitating an Event of Default hereunder, withhold such payment to contest in good faith the necessity for any such Extraordinary
Services and Extraordinary Expenses and the reasonableness of any such fees, charges or expenses.
If the Company should fail to make any of the payments required in this Section, the item or installment which the Company has failed to make shall continue as an obligation of the Company until the same shall have been fully paid, and the Company agrees to pay the same (in the case of interest, to the extent permitted by law) with interest thereon at the rate per annum equal to one percent per annum over the applicable interest rate borne by the Bonds, calculated as described in the Indenture. The provisions of this Section shall be subject to the provisions of Section 9.6.
Section 5.4 - Place of Rental Payments. The rents provided for in
Section 5.3 and the interest on delinquent rents shall be paid directly to the
Trustee for the account of the Board and will be deposited in the Bond Fund. The
other payments provided for in Section 5.3 shall be paid directly to the Trustee
for its own use or for disbursement to any other paying agent, as the case may
be.
Section 5.5 - Obligations of Company Hereunder Absolute and
Unconditional. Subject to the provisions of Section 9.6, the obligations of the
Company to make the payments required in Section 5.3 and to perform and observe
the other agreements on its part contained herein shall be absolute and
unconditional. Until such time as payment in full of the Bonds shall have been
made, the Company (i) will not suspend or discontinue any payments provided for
in Section 5.3 except to the extent the same have been prepaid, (ii) will
perform and observe all of its other agreements contained herein, (iii) will not
suspend or discontinue any payments provided for in Section 5.3 because of any
right of set off which the Company may have against the Board, the Trustee or
the holder of any Bond (provided that nothing herein shall prevent the assertion
of any claim by the Company by separate suit or compulsory counterclaim) and
(iv) except as provided in Section 11.1 will not terminate the Lease Term for
any cause, including, without limiting the generality of the foregoing, failure
of the Board to complete the Project Facilities, failure of the Board's title in
and to the Project or any part thereof, any acts or circumstances that may
constitute failure of consideration, eviction or constructive eviction,
destruction of or damage to the Project, commercial frustration of purpose, any
change in the tax or other laws of the United States of America or of the State
or any political subdivision of either or any failure of the Board to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or in connection herewith or with the Indenture.
Nothing contained in this Section shall be construed to release the Board from
the performance of any of the agreements on its part herein contained; and if
the Board should fail to perform any such agreement, the Company may institute
such action against the Board as the Company may deem necessary to compel
performance or recover its damages for nonperformance so long as such action
shall not do violence to the agreements on the part of the Company contained in
the preceding sentence. The
Company may, however, at its own cost and expense and in its own name or in the name of the Board, prosecute or defend any action or proceeding or take any other action involving third persons which the Company deems reasonably necessary in order to insure the completion of the acquisition, construction and installation of the Project Facilities or to secure or protect its right of possession, occupancy and use of the Project hereunder, and in such event the Board hereby agrees to cooperate fully with the Company and to take all lawful action which is required to effect the substitution of the Company for the Board in any such action or proceeding if the Company shall so request.
Nothing contained herein shall be construed to be a waiver of any rights which the Company may have against the Board under this Agreement, or against other persons under this Agreement, the Indenture, or otherwise, or under any provision of law.
Section 5.6 - Company's Performance Under Indenture. The Company agrees, for the benefit of the holders from time to time of the Bonds, to do and perform all acts and things contemplated in the Indenture to be done or performed by it.
Section 5.7 - Payments in Lieu of Taxes. The Board and the Company acknowledge that, under present law, the Project, as long as at is owned by the Board, is exempt from ad valorem taxation by the State of Alabama or any political or taxing subdivision thereof, including Russell County.
The Company agrees that it will make payments in lieu of taxes ("PILOT Payments"), consisting of payments in fixed, specified amounts ("Fixed Payments") and payments in amounts determined by formula as set forth below ("Variable Payments"), so long as the Bonds and any Additional Bonds are outstanding and subject to the provisions of the last paragraph of this Section 5.7, in the amounts and at the times and in the manner set forth below. The PILOT Payments shall be payable on July 1 and August 15, 1993 and on August 15 of each subsequent year, commencing August 15, 1994.
The Fixed Payments shall be payable to Russell County and shall be in the following amounts: $55,000 on July 1, 1993; $145,000 on August 15, 1993; $200,000 on August 15, 1994; $50,000 on each of August 15, 1995, August 15, 1996, August 15, 1997 and August 15, 1998; and $100,000 on August 15 of each subsequent year, commencing August 15, 1999.
The aggregate Variable Payments for each year shall be in an amount equal to 60% of the "education taxes" (as defined below) that would be payable with respect to the Project leased under the Lease, calculated as of the December 31 of the second preceding calendar year (each December 31, an "Assessment Date") with respect to those portions of the Project capitalized for financial accounting purposes and leased under this Agreement on such Assessment Date. For purposes of this Section 5.7, "education taxes" means the ad valorem taxes then currently levied on property
situated in Russell County to support public schools in Russell County (i.e., the levy for the Russell County Board of Education and the Russell County countywide schools levy levied as of the applicable Assessment Date), which taxes would be assessed against the Project if the Project was not exempt from ad valorem taxes. The Variable Payment due on August 15, 1994 (with respect to the December 31, 1992 Assessment Date) and August 15, 1995 shall be distributed as follows: 60% to the Phenix City Board of Education and 40% to the Russell County Board of Education. The Variable Payments due on December 15, 1996 and thereafter shall be distributed as follows: 55% to the Phenix City Board of Education, 35% to the Russell County Board of Education, 5% of the Calculation Amount to the City of Phenix City and 5% of the Calculation Amount to Russell County.
The Calculation of the amount of PILOT Payments due shall be made by the Company and by March 15 of each year, the Company will provide to the Board and each recipient of PILOT Payments a report of the amount due on the next succeeding August 15. The Company's calculations of the PILOT Payments, absent manifest error, shall be conclusive and binding upon the Board and all recipients of PILOT Payments.
The Board acknowledges that the obligation of the Company to make any payment of PILOT Payments as additional rent provided for in this section is conditioned upon the Project remaining exempt from ad valorem taxation throughout the period or term to which the Project so becomes subject to ad valorem taxation.
ARTICLE VI
MAINTENANCE, MODIFICATION, TAXES AND INSURANCE
Section 6.1 - Maintenance and Modification of Project Facilities by Company.
(a) Throughout the Lease Term, the Company shall at its own expense (i) keep the Project Facilities in as reasonably safe condition as the operation thereof will permit, and (ii) keep the Project Facilities in good repair and in good operating condition, making from time to time all necessary repairs thereto and renewals and replacements thereof.
(b) The Company may from time to time, in its sole discretion and at its own expense, make any additions, modifications or improvements to the Project Facilities, including installation of additional machinery, equipment, and related property that do not impair the effective use of the Project Facilities. All machinery, equipment and related personal property so installed by the Company shall not be subject to this Agreement but shall be subject to the Landlord's Lien created under the Code of Alabama 1975, Section 35-9-60. All such machinery, equipment and related
personal property may be modified or removed at any time while there exists no event of default hereunder; provided, that any damage to the Project Facilities occasioned by such modification or removal shall be repaired by the Company at its own expense.
(c) the Company shall not permit any mechanics', materialmen's, suppliers', vendors' or other similar liens to be established or remain against the Project for labor or materials furnished or services rendered in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that if the Company shall first notify the Trustee of its intention so to do, the Company may in good faith contest any mechanics', materialmen's, suppliers', vendors' or other similar liens filed or established against the Project, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the Board of the Trustee shall notify the Company that by nonpayment of any such items the lien or security interests afforded by this Agreement or the Indenture as to any part of the Project or the rents, payments and revenues from the Project will be materially endangered or the Project or any part thereof or the rents, payments and revenues from the Project will be subject to loss or forfeiture, in which event the Company shall promptly pay and cause to be satisfied and discharged all such unpaid items. The Board will cooperate fully with the Company in any such contest.
Section 6.2 - Removal of Portions of Project. The Board shall not be under any obligation to renew, repair or replace any inadequate, obsolete, worn out, unsuitable, undesirable, inappropriate or unnecessary items of machinery or equipment comprising the Project Facilities. If the Company in its sole discretion determines that any such items have become inadequate, obsolete, worn out, unsuitable, undesirable, inappropriate or unnecessary for its purposes at such time, the Company may remove such items from the Project and (on behalf of the Board) sell, trade in, or otherwise dispose of them (as a whole or in part) without any responsibility or accountability to the Board or the Trustee therefor, provided that such removal does not impair the operation of the Project Facilities.
The removal of any portion of the Project Facilities pursuant to the provisions of this Section shall not entitle the Company to any diminution in or postponement or abatement of the rents payable under Section 5.3.
The Company shall promptly report to the Trustee each such removal, substitution, sale, trade-in or other disposition.
Section 6.3 - Taxes, Other Governmental Charges and Utility Charges. The Company agrees to pay promptly as and when the same
shall become due and payable, each and every lawful cost, expense and obligation of every kind and nature, foreseen or unforeseen, for the payment of which the Board or the Company is or shall become liable by reason of its estate or interest in the Project or any portion thereof, by reason of any right or interest of the Board or the Company in or under this Agreement, or by reason of or in any manner connected with or arising out of the possession, operation, maintenance, alteration, repair, rebuilding or use of the Project or any part thereof. The Company also agrees to pay and discharge all lawful real estate taxes, personal property taxes, water charges, sewer charges, assessments and all other lawful governmental taxes, impositions and charges of every kind and nature, ordinary and extraordinary, general or special, foreseen or unforeseen, whether similar or dissimilar to any of the foregoing, and all applicable interest and penalties thereon, if any, which at any time during the term of this Agreement shall be or become due and payable by the Board or the Company and which shall be lawfully levied, assessed or imposed
(a) upon or with respect to, or shall be or become liens upon, the Project or any portion thereof or any interest of the Board or the Company therein or under this Agreement;
(b) upon or with respect to the income or profits of the Board from the Project or under this Agreement;
(c) upon or with respect to the possession, operation, management, maintenance, alterations, repair, rebuilding, use or occupancy of the Project or any portion thereof; or
(d) upon this transaction or any document to which the Board or the Company is a party creating or transferring an interest or an estate in the Project;
under or by virtue of any present or future law, statute, ordinance, regulation or other requirement of any governmental authority, whether federal, state, county, city, municipal, school or otherwise.
The Company also agrees to pay any special assessments for public improvements or benefits for which the Company would have otherwise have been liable had it in fact been the owner of the Project.
The Company shall, at its sole cost and expense, procure or cause to be procured any and all necessary building permits, other permits, licenses and other authorizations required for the lawful and proper construction, use, occupation, operation and management of the Project. The Company also agrees to pay or cause to be paid all lawful charges for gas, water, sewer, electricity, light, heat, power, telephone and other utility and service used, rendered or supplied to, upon or in connection with the Project and the Board will cooperate with the Company in securing such permits, licenses and authorizations.
The Company may, at its own expense and in its own name and behalf or in the name and behalf of the Board, in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assessments and other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Board or the Trustee shall notify the Company that by nonpayment of any such items the lien or security interests afforded by this Agreement or the Indenture as to any part of the Project or the rents, payments and revenues derived from the Project will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event such taxes, assessments or charges shall be paid promptly. The Board shall cooperate fully with the Company in any such contest. If the Company shall fail to pay any of the foregoing items required by this Section to be paid by the Company and shall not cure any failure within any applicable curative provisions provided herein, the Board or the Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Board or the Trustee shall become an additional obligation of the Company to the one making the advancement, which amounts, together with interest thereon at the rate of interest borne by the Bonds from the date thereof, the Company agrees to pay.
Section 6.4 - Insurance Required. Throughout the Lease Term the Company shall keep the Project continuously insured (or maintain programs of self-insurance) against such risks as are customarily insured against by businesses of like size and type.
Section 6.5 - Application of Net Proceeds of Insurance. The insurance
carried pursuant to the provisions of Section 6.4 shall be applied as follows:
(i) the Net Proceeds of casualty insurance shall be applied as provided in
Section 7.1, and (ii) the Net Proceeds of public liability insurance shall be
applied toward extinguishment or satisfaction of the liability with respect to
which such insurance proceeds may be paid.
Section 6.6 - Additional Provisions Respecting Insurance. All insurance, if any, required in Section 6.4 may be taken out and maintained in insurance companies selected by the Company and may be written with deductible amounts comparable to those on similar policies carried by other companies engaged in businesses similar in size and type and other respects as the Company. The insurance hereby required may be contained in blanket policies or self-insurance programs now or hereafter maintained by the Company.
Section 6.7 - Other Board Expenses. Anything to the contrary herein notwithstanding, the Company shall pay any reasonable and necessary expenses not specifically mentioned herein which are incurred by the Board in connection with the Project, this Agreement, the Indenture, any financing statements or the Bonds, and which are not payable from the Project Fund pursuant to Section 4.2.
Section 6.8 - Advances by Board or Trustee. If the Company fails to maintain the insurance coverage required hereby or fails to keep the Project Facilities in as reasonably safe condition as its operating conditions will permit, or fails to keep the Project Facilities in good repair and good operating condition and shall not cure any failure within any applicable curative provisions provided herein, the Board or the Trustee may (but unless satisfactorily indemnified shall be under no obligation to) take out policies of insurance and pay the premiums on the same or make the required repairs, renewals and replacements; and all amounts so advanced therefor by the Board or the Trustee will become an additional obligation of the Company to the one making the advancement, which amounts, together with interest thereon at the rate of interest borne by the Bonds from the date thereof, the Company agrees to pay.
Section 6.9 - Indemnification of Board and Trustee. The Company will also pay and discharge and will indemnify and hold harmless the Issuer and the members, officers, agents and employees or the Issuer from (a) any condition of the Project caused by the Company, (b) any liens, taxes, assessments, impositions and other charges upon payments by the Company to the Issuer hereunder, (c) any breach or default on the part of the Company in the performance of any of its obligations hereunder, (d) any act of negligence of the Company or of its agents, contractors, servants, employees or licensees, (e) any act of negligence of any assignee or sublessee of the Company, or of any agents, contractors, servants, employees or licensees of any assignee or sublessee of the Company and (f) any and all liability, damages, costs and expenses arising out of or resulting from the acquisition, construction and installation of the Project or the use or operation of the Project or any other activity carried out thereon or in connection therewith or the transactions contemplated by this Agreement and the Indenture, including the reasonable fees and expenses of counsel, except as the same may arise out of the negligence or misconduct on the part of the Issuer. If any such lien or charge is sought to be imposed upon payments, or any such taxes, assessments, impositions or other charges are sought to be imposed, or any such liability, damages, costs and expenses are sought to be imposed, the Issuer will give prompt notice to the Company, and the Company shall have the sole right and duty to assume, and will assume, the defense thereof, with full power to litigate, compromise or settle the same in its sole discretion. The indemnification provided by the Section shall survive the termination of this Agreement.
The Company agrees to indemnify the Trustee, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the Indenture, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties thereunder or hereunder.
Section 6.10 - Investment Credit. The Board agrees that any investment tax credit with respect to the Project or any part thereof shall be made available to the Company, and the Board will fully cooperate with the Company in any effort by the Company to avail itself of any such investment tax credit, but neither the Board nor the Trustee shall have any responsibility or liability for the Company's failure to receive any such investment tax credit. The Board agrees to cause the Trustee to cooperate in making any investment tax credit available to the Company.
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 - Damage and Destruction. If prior to payment in full of
the Bonds the Project Facilities are destroyed (in whole or on part) or are
damaged by fire or other casualty, the Company, or the Board at the Company's
direction, (i) shall promptly replace, repair, rebuild or restore the property
damaged or destroyed to substantially the same condition as existed prior to the
event causing such damage or destruction, with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be desired by the Company and as will not impair the operation of the Project
Facilities, and (ii) shall apply for such purpose so much as may be necessary of
any Net Proceeds of insurance resulting from claims for such losses, as well as
any additional moneys of the Company necessary therefor. All Net Proceeds of
insurance resulting from claims for such losses shall be paid to the Company. If
said Net Proceeds are not sufficient to pay in full the costs of such
replacement, repair, rebuilding or restoration, the Company shall nonetheless
complete the work thereof and shall pay that portion of the costs thereof in
excess of the amount of said Net Proceeds. The Company shall not, by reason of
the payment of such excess costs be entitled to any reimbursement from the Board
or any abatement, diminution or postponement of the amounts payable under
Section 5.3.
Section 7.2 - Condemnation. If the title in and to, or the temporary use of, the Project or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any other person acting under governmental authority, the Company shall be obligated to continue to pay the rents specified in Section 5.3. The Board, the Company and the Trustee shall cause the Net Proceeds received by them or any of them, from any award made in such eminent domain proceeding, to be paid to and held by the Company and applied in one or more of the following ways at the election of the Company:
(a) the restoration of the Project to substantially the same condition as existed prior to the exercise of such power of eminent domain;
(b) the acquisition, by construction or otherwise, of other industrial facilities suitable for the Company's
operations at the Project (which facilities will be deemed a part of the Project and available for use and occupancy by the Company and will be leased to the Company hereunder without the payment of any rents other than herein provided to the same extent as if such other improvements were specifically described herein); provided, that such facilities will be acquired subject to no liens, security interests or encumbrances prior to the lien afforded by this Agreement and the Indenture, other than Permitted Encumbrances; or
(c) payment into the Bond Fund to provide for payment in full of the Bonds at the earliest date that the Bonds may be called for redemption.
The Board shall cooperate fully with the Company in the handling and conduct of any prospective or pending eminent domain proceeding with respect to the Project or any part thereof and shall, to the extent it may lawfully do so, permit the Company to litigate in any such proceeding in the name and on behalf of the Board. In no event will the Board voluntarily settle, or consent to the settlement of, any prospective or pending eminent domain proceeding with respect to the Project or any part thereof without the written consent of the Company.
Section 7.3 - Condemnation of Company-Owned Property. The Company shall be entitled to the proceeds of any condemnation award or portion thereof made for damages to or taking of its own property or for damages on account of the taking of or interference with Company's rights to possession, use or occupancy of the Project.
Section 7.4 - Further Assurances and Corrective Instruments. The Board and the Company agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project herein described or intended so to be or for carrying out the intention of or facilitating the performance of this Agreement.
ARTICLE VIII
SPECIAL AGREEMENTS
Section 8.1 - No Warranty of Condition or Suitability by the Board. THE
BOARD MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE CONDITION OF THE
PROJECT OR THAT IT WILL BE SUITABLE FOR THE COMPANY'S PURPOSES OR NEEDS. The
Company releases the Board from, agrees that the Board shall not be liable for
and agrees to hold the Board harmless against, any loss that may be occasioned
by any cause whatsoever pertaining to the Project or the use thereof.
Section 8.2 - Inspection of the Project. The Company agrees that the Authorized Board Representative and any duly authorized
agent of the Trustee shall have the right at all reasonable times to enter upon, examine and inspect the Project without interference or prejudice to the operations at the Company. The Company further agrees that any authorized agent of the Board or the Trustee shall have such rights of access to the Project as may be reasonable and necessary for the proper maintenance of the Project in the event of the failure by the Company to perform its obligations under Section 6.1.
Section 8.3 - Company to Maintain Its Corporate Existence; Exceptions Permitted. The Company agrees that it will maintain its corporate existence, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it; provided that the Company may, without violating the agreement contained in this Section 8.3, consolidate with or merge into another corporation incorporated and existing under the laws of one of the states of the United States of America or the District of Columbia (a "domestic corporation"), or permit one or more other domestic corporations to consolidate with or merge into it, or sell or otherwise transfer to another domestic corporation all or substantially all of its assets as an entirety and thereafter dissolve, provided, if the Company is not the surviving, resulting or transferee corporation, as the case may be, such surviving, resulting or transferee corporation assumes in writing all of the obligations of the Company under the Agreement and qualifies to do business in the State. Notwithstanding the foregoing, the Company shall not dissolve or otherwise dispose of all or substantially all of its assets and shall not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it if, after giving effect to such action, a default would result under this Agreement or the Indenture.
Section 8.4 - Qualification in the State. The Company agrees (except as may be otherwise permitted pursuant to the provisions of Section 8.3) that throughout the Lease Term it will continue to be a corporation either organized under the laws of the State or duly qualified to do business in the State as a foreign corporation.
Section 8.5 - Granting of Easements. If no Event of Default shall have happened and be continuing, the Company may at any time or times cause to be granted easements (including party wall agreements), licenses, rights-of-way (temporary or perpetual and including the dedication of public highways) and other rights or privileges in the nature of easements with respect to any property included in the Project Land and such grant will be free from any lien or security interest created by this Agreement and the Indenture, or the Company may cause to be released existing easements, licenses, rights-of-way and other rights or privileges in the nature of easements, held with respect to any property included in the Project Land with or without consideration and the Board agrees that it shall execute and deliver and will cause and direct the Trustee to execute and deliver any instrument necessary
or appropriate to confirm and grant or release any such easement, license, right-of-way or other right or privilege upon receipt of: (i) a copy of the instrument of grant or release, and (ii) a written application signed by the president or any vice president of the Company requesting the execution and delivery of such instrument and stating that such grant or release is not detrimental to the proper conduct of the business of the Company, and that such grant or release will not impair the effective use or interfere with the operations of the Project Facilities and will not materially weaken, diminish or impair the security intended to be given by or under this Agreement and the Indenture.
Section 8.6 - Release of Certain Land. Notwithstanding any other provision hereof, the parties hereto reserve the right to amend this Agreement at any time and from time to time by mutual agreement for the purpose of effecting the release of and removal of (i) any unimproved part of the Project Land (on which no component of the Project Facilities is located but on which parking, transportation or utility facilities may be located) on which the Board proposes to construct improvements for lease or sale to another person or persons under another and different agreement, or (ii) any part of the Project Land with respect to which the Board proposes to grant an easement or convey a fee interest or other title to a railroad or other public or private carrier or to any public utility or public body in order that transportation facilities or services by rail, water, road or other means or utility services for the Project may be provided, increased or improved; provided, that if at the time any such amendment is made any of the Bonds are outstanding, there shall be deposited with the Trustee the following:
(a) a copy of such amendment as executed;
(b) a resolution of the Board (i) stating that the Board is not in default under any of the provisions hereof or of the Indenture and that the Company is not to the knowledge of the Board in default under any of the provisions hereof, (ii) giving an adequate legal description of that portion of the Project Land to be released, (iii) stating the purpose for which the Board desires the release, (iv) stating that the improvements which will be constructed or the facilities and services which will be provided, increased or improved will be such as will promote at least one of the public purposes of the Board, and (v) requesting such release;
(c) a certificate of the president or any vice president of the Company indicating approval of such amendment and stating that the Company is not in default under any of the provisions hereof;
(d) a copy of the agreement between the Board and such other person wherein the Board agrees to construct improvements on the portion of the Project Land so requested to be released and agrees to lease or sell the same to such
other person, and wherein such other person agrees to lease or purchase the same from the Board, or a copy of the Instrument granting the easement or conveying the title or other interest to a railroad, public utility or public body; and
(e) a certificate of the Authorized Company Representative, dated not more than 60 days prior to the date of such amendment and stating that (i) the portion of the Project Land so proposed to be released is necessary or desirable for railroad, utility services or roads to benefit the Project or not otherwise needed for the operation of the Project Facilities for the purposes hereinabove stated, and (ii) the release so proposed to be made will not impair the usefulness of the Project Facilities and will not destroy the means of ingress thereto and egress therefrom.
No release effected finder this Section shall entitle the Company to any
diminution in or postponement or abatement of the rents payable under Section
5.3.
ARTICLE IX
ASSIGNMENT SUBLEASING, PLEDGING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT
Section 9.1 - Assignment and Subleasing. This Agreement may be assigned by the Company without the necessity of obtaining the consent of the Board or the Trustee, subject, however, to the following conditions:
(a) no assignment (other than pursuant to Section 8.3) or sublease shall relieve the Company from primary liability for any of its obligations hereunder, and if any such assignment occurs, the Company shall continue to remain primarily liable for payment of the rents specified in Section 5.3 and for performance and observance of the other agreements on its part herein provided to be performed and observed by it; and
(b) the Company shall within 30 days after the delivery thereof, furnish or cause to be furnished to the Board and to the Trustee a true and complete copy of each such assignment or sublease, as the case may be, together with any instrument of assumption.
Section 9.2 - Pledge under Indenture. Under the terms of the Indenture, the Board shall assign and create a security interest with respect to its interest in, and pledge all rents, revenues and receipts arising out of or in connection with its ownership of, the Project to the Trustee, as security for the payment of the principal of and interest on the Bonds, but the Indenture and said assignment and pledge shall be subject and subordinate to this Agreement.
Section 9.3 - Restrictions on Sale of Project by Board. The Board agrees that, except as set forth in Section 9.2 or as otherwise provided in the Agreement and Indenture, it shall not (i) sell (other than as contemplated herein), assign, transfer or convey the Project during the Lease Term, (ii) create or suffer to be Created any debt, lien or charge on the rents, payments and revenues arising out of or in connection with its ownership of the Project, or (iii) take any other action which might reasonably be construed as tending to cause or induce the levy or assessment of ad valorem taxes on the Project or on its title in and to the Project. If the laws of the State at the time permit such action to be taken, nothing contained in this Section shall prevent the consolidation of the Board with, or the merger of the Board into, or the transfer of the Project as an entirety to, any public corporation whose property and income are not subject to taxation and which has corporate authority to carry on the business of owning and leasing the Project; provided (a) that no such action shall be taken without the prior written consent of the Company, unless such action shall be required by law, and (b) that upon any such consolidation, merger or transfer, the due and punctual payment of the principal of and the interest on the Bonds, and the due and punctual performance and observance of all the agreements hereof to be kept and performed by the Board, shall be expressly assumed on writing by the corporation resulting from such consolidation or surviving such merger or to which the Project shall be transferred as an entirety.
Section 9.4 - Redemption of Bonds. The Board, at the request at any time of the Company and if the same are then redeemable, shall forthwith take all steps that may be necessary under the applicable redemption provisions of the Indenture to effect redemption of all or any portion of the Bonds, as may be specified by the Company, on the earliest applicable redemption date on which such redemption may be made under such applicable provisions or upon the date set for the redemption by the Company pursuant to Sections 7.2 or 11.1. As long as the Company is not in default hereunder and the Board is not obligated to call Bonds pursuant to the terms of the Indenture, the Board shall not redeem any Bond prior to its respective stated maturity unless requested to do so in writing by the Company.
Section 9.5 - Prepayment of Rents. There is expressly reserved to the Company the right, and the Company is authorized and permitted, at any time it may choose, so long as it is not in default hereunder, to prepay all or any part of the rents and other payments payable under Section 5.3, and the Board agrees that the Trustee may accept such prepayment when the same is tendered by the Company. All prepaid rents shall be credited on the rents specified in Section 5.3, and at the election of the Company shall be used for the redemption or purchase of Bonds in the manner and to the extent provided in the Indenture.
Section 9.6 - Rent Abatements if Bonds Paid Prior to Maturity. If at any time the Indenture discharged in accordance with
Article X of the Indenture, and if the Company is not at the time otherwise in default hereunder, the Company shall be entitled to use and occupy the Project, without the payment of rent during the interval (but otherwise on the terms and conditions hereof), from the date on which such moneys are in the Bond Fund to and including the later to occur of either (i) midnight, June 1, 2033 or (ii) payment in full of all Bonds and any Additional Bonds.
Section 9.7 - Reference to Bonds Ineffective After Bonds Paid. Upon payment in full of the Bonds and all fees and charges of the Trustee, all references herein to the Bonds and the Trustee shall be ineffective and neither the Trustee nor the holders of any of the Bonds shall thereafter have any rights hereunder, saving and excepting those that shall have theretofore vested. Reference is hereby made to Section 1002 of the Indenture which sets forth the conditions upon the existence or occurrence of which payment in full of the Bonds shall be deemed to have been made.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 - Events of Default Defined. The following shall be Events of Default hereunder and the term Event of Default shall mean, whenever it is used herein, any one or more of the following events:
(a) Failure by the Company to make any payment required under
Section 5.3 on or before the date that the payment is due and
continuance of such failure for ten Business Days after receipt of
notice of such failure from the Trustee.
(b) Failure by the Company to observe and perform any other covenant, condition or agreement on its part under this Agreement (other than as referred to in subsection (a) of this Section), for a period of ninety (90) days after written notice, specifying such failure and requesting that it be remedied, shall be given to the Company by the Trustee, unless the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be remedied within the applicable period, the Board and the Trustee will not unreasonably withhold their consent to an extension of such time if it is possible to correct such failure and corrective action is instituted by the Company within the applicable period and diligently pursued until the default is corrected;
(c) Any warranty, representation or other statement by or on behalf of the Company contained in this Agreement, or any instrument furnished in compliance with or in reference to this Agreement or the Indenture, is false or misleading in any material respect; or
(d) The dissolution or liquidation of the Company or the filing by the Company of a voluntary petition in bankruptcy, or the Commission by the Company of any act of bankruptcy, or adjudication of the Company as a bankrupt, or assignment by the Company for the benefit of its creditors, or the entry by the Company into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Company in any proceeding for its reorganization instituted under the provisions of the Federal bankruptcy statutes, as amended, or under any similar act which may hereafter be enacted. The term "dissolution or liquidation of the Company", as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Company resulting from a merger or consolidation of the Company into or with another corporation or a dissolution or liquidation of the Company following a transfer of all or substantially all of its assets as an entirety.
Section 10.2 - Remedies. Whenever any Event of Default shall have happened and be continuing, the Trustee, as the assignee of the Board under the Indenture, shall have the following rights and remedies:
(a) The Trustee may, and upon the written request of the holders of not less than twenty-five percent (25%) in outstanding principal amount of the Bonds, shall by notice in writing delivered to the Company, declare all installments of rent payable under Section 5.3 for the remainder of the Lease Term to be immediately due and payable. Upon such acceleration, the amount then due and payable by the Company as accelerated rent shall be the sum required to provide for payment in full of the Bonds on the earliest possible date on which such payment can be made. Such sums as may then become payable shall be paid into the Bond Fund and after payment in full of the Bonds and payment of any cost occasioned by such Event of Default, any excess moneys in the Bond Fund shall be returned to the Company as an overpayment of rent. Notwithstanding the foregoing, upon the occurrence of an Event of Default by reason of the occurrence of any event specified for Section 10.1(d), all installments of rent payable under Section 5.3 for the remainder of the Lease Term shall automatically become and be immediately due and payable without any action by the Trustee or the Board being necessary.
(b) The Trustee may take whatever action at law or in equity may appear necessary or desirable to collect the rents and any other payments then due and thereafter to become due, or to enforce performance and observance of any covenant, condition or agreement of the Company hereunder;
(c) The Trustee may exercise any remedies provided for in the Indenture and, with respect to any security interest,
the rights of a secured party under the Uniform Commercial Code of the State.
Any amounts collected pursuant to action taken under this Section shall be paid into the Bond Fund and applied in accordance with the provisions of the Indenture or, if payment in full of the Bonds has been made, shall be paid to the Company.
Section 10.3 - No Remedy Exclusive. No remedy herein conferred upon or reserved to the Board or the Trustee is untended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon the occurrence of any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Board or the Trustee to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice or notices as may be herein expressly required. Such remedies as are reserved to the Board in this Article shall also extend to the Trustee, and the Trustee and the holders of the Bonds shall be deemed third-party beneficiaries of all agreements herein contained.
Section 10.4 - Agreement to Pay Attorneys' Fees and Expenses. If there should occur an Event of Default hereunder and the Board or the Trustee should employ attorneys or incur other expenses for the collection of rents or the enforcement of performance or observance of any agreement on the part of the Company herein contained, the Company agrees that it will on demand therefor pay to the Board or the Trustee the reasonable fee of such attorneys and such other reasonable expenses so incurred by the Board or the Trustee.
Section 10.5 - No Additional Waiver Implied by One Waiver. If any agreement contained herein should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.
Section 10.6 - Waiver of Appraisement, Valuation, etc. If there should occur an Event of Default hereunder, the Company agrees to waive, to the extent it may lawfully do so, the benefit of all appraisement, valuation, stay, extension or redemption laws now or hereafter in force, and all right of appraisement and redemption to which it may be entitled.
Section 10.7 - Waiver of Events of Default. Notwithstanding anything herein to the contrary, the Trustee shall be deemed to have waived any Event of Default hereunder and its consequences and to have rescinded any acceleration of the rents and other amounts
payable under this Agreement whenever the Trustee has waived such Event of Default pursuant to the Indenture.
ARTICLE XI
OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE PROJECT
Section 11.1 - General Option to Prepay Rent and Purchase Project. At any time, the Company shall have, and is hereby granted, the option to prepay the rent payable under Section 5.3, in whole or in part. To exercise the option granted in this paragraph, the Company shall, on or before the 2Oth day next preceding the date set for redemption of the Bonds (which shall be an interest payment date if less than all the Bonds are to be redeemed), give written notice to the Board and the Trustee of its intention to exercise the option granted in this section on such date and shall specify therein the principal amount of Bonds to be redeemed with the moneys received upon such prepayment. Upon the exercise of such option, the Company shall direct the Trustee to redeem Bonds in the principal amount and on the date specified in the notice referred to in the preceding sentence and shall make arrangements satisfactory to the trustee for the giving of the required notice of redemption of Bonds. The purchase price which shall be paid to the trustee by the Company in the event of its exercise of the option granted in this paragraph shall be the sum of the principal amount of the Bonds to be redeemed plus accrued interest thereon to the redemption date plus all fees and expenses of the trustee and the paying agent accrued and to accrue through such redemption date.
The Company shall have the option to purchase the Project at any time, in the event that the Indenture is discharged pursuant to Article IX of the Indenture, by the Company (i) depositing irrevocably with the Trustee either moneys in an amount which shall be sufficient, or Government Obligations the principal of and interest on which when due will provide moneys which, together with the moneys, if any, deposited with or held by the Trustee at the same time and available for such purpose shall be sufficient pursuant to the Indenture, to pay the principal of and interest on all of the Bonds due and to become due on or prior to the redemption date (if the Bonds are to be redeemed) or maturity thereof; (ii) paying to the trustee all Trustee's fees and expenses due in connection with the payment or redemption of any such Bonds, and, (iii) if any Bonds are to be redeemed on any date prior to their maturity, giving the Trustee irrevocable instructions to redeem such Bonds on such date and either evidence satisfactory to the Trustee that all redemption notices required by the Indenture have been given or irrevocable power authorizing the Trustee to give such redemption notices.
Section 11.2 - Conveyance on Purchase. At the closing of any purchase of the Project as provided hereunder, the Board shall upon receipt of the purchase price deliver to the Company documents
conveying to the Company good and marketable fee simple title in and to the Project, subject to the following: (a) those liens, security interests and encumbrances (if any) to which such title in and to said property was subject at the effective date of this Agreement but excluding this Agreement and the Indenture; (b) those liens and encumbrances created by the Company or to the creation or suffering of which the Company consented; (c) those liens and encumbrances resulting from the failure of the Company to perform or observe any of its agreements contained herein; and (d) Permitted Encumbrances other than this Agreement and the indenture.
Section 11.3 - Relative Positions of Options and Indenture. The options granted to the Company in this Article shall be and remain prior and superior to the Indenture and may be exercised whether or not there exists an Event of Default hereunder, provided that the existence of such Event of Default will not result in nonfulfillment of any condition to the exercise of any such option.
ARTICLE XII
MISCELLANEOUS
Section 12.1 - Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
(a) If to the Board - The Industrial Development
Board of the City of
Phenix City, Alabama
c/o Mr. Kenneth A. Roberts
Community Bank
2301 Airport Thruway
Columbus, Georgia 31904
with a copy to
R. Michael Raiford, Esq.
501 14th Street
Phenix City, Alabama 36267
(b) If to the Company - Mead Coated Board, Inc. Mead World Headquarters Dayton, Ohio 45463 Attention: Treasurer
with a copy to:
Thompson, Hine and Flory 312 Walnut Street 14th Floor Cincinnati, Ohio 45202 Attention: Robert A. Selak
(c) If to the Trustee - AmSouth Bank N.A.
1901 Sixth Avenue North
Birmingham, Alabama 35203
Attention: Corporate Trust
Department
A duplicate copy of each notice, certificate or other communication given hereunder by either the Board, the Company or the Trustee to any one of the others shall also be given to all of the others. The Board, the Company and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.
Section 12.2 - Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Board, the Company and their respective successors and assigns. To the extent provided herein and in the Indenture, the Trustee and the holders of the Bonds shall be deemed to be third party beneficiaries hereof, but nothing herein contained shall be deemed to create any right in, or to be for the benefit of, any other person not a party hereto.
Section 12.3 - Severability. If any provision hereof shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
Section 12.4 - Amounts Remaining in Bond Fund. Subject to and in accordance with the terms and conditions of Section 709 of the Indenture, certain surplus moneys remaining in the two accounts in the Bond Fund shall belong to and be paid to the Company by the Trustee as an overpayment of rents.
Section 12.5 - Amendments, Changes and Modifications. Except as otherwise provided herein or in the Indenture, subsequent to the date of issuance and delivery of the Bonds and prior to their payment in full, this Agreement may not be effectively amended or terminated without the written consent of the Trustee.
Section 12.6 - Execution Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 12.7 - Captions. The captions and headings herein are for convenience only and in no way define, limit or describe the scope or intent of any provisions hereof.
Section 12.8 - Recording of Agreement. This Agreement and every assignment and modification hereof shall be recorded in the Office of the Judge of Probate of Russell County, Alabama, or in such other office as may be at the time provided by law as the proper place for such recordation.
Section 12.9 - Law Governing Construction of Agreement. This Agreement shall be governed by, and construed in accordance with, the laws of the State.
Section 12.10 - Net Lease. This Agreement shall be deemed a "net lease", and the Company shall pay absolutely net during the Lease Term the rents specified herein, without abatement, deduction or set-off other than those herein expressly provided.
IN WITNESS WHEREOF, the Board and the Company have caused this Agreement to be executed in their respective corporate names as of the date first above written.
THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF
PHENIX CITY, ALABAMA
[CORPORATE SEAL]
By: /s/ Kenneth A. Roberts --------------------------------- Chairman |
MEAD COATED BOARD, INC.
By: /s/ William R. Graber --------------------------------- |
ACKNOWLEDGMENT 0F B0ARD
STATE OF GEORGIA ) ) COUNTY OF MUSCOGEE ) |
I, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act or said public corporation.
GIVEN under my hand and seal of office, this 27th day of April, 1994.
/s/ Linda Boyd ------------------------ Notary Public |
(SEAL)
My commission expires: 12-17-96
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO )
)
COUNTY OF MONTGOMERY )
I, a Notary Public in and for said County in said State, hereby Certify that William R. Graber, whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who as known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he or she, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 27th day of April, 1994.
/s/ Robert A. Selak ----------------------------- Notary Public (SEAL) ROBERT A. SELAK, Attorney at Law Notary Public, State of Ohio My Commission has no expiration date. Section 147.03 O. R. C. My commission expires: ----------- |
EXHIBIT "A"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of June 1, 1993
The Project Land includes the following property:
The following real estate and premises situated in the County of Russell and State of Alabama:
Eight hundred eighty four and 47/100 (884.47) acres located in Sections 32,
33, 21, 28, and 27, Township 14 North, Range 30 East, and Section 5,
Township 13 North, Range 30 East, and beginning at the Southwest corner of
Section 32, Township 14 North, Range 30 East, Russell County, Alabama, run
thence North 00 degrees 38 minutes East a distance of 354.26 feet along a
fence line to a concrete monument, thence North 37 degrees 57 minutes 25
seconds East a distance of 2086.55 feet to a point, thence North 57 degrees
13 minutes East a distance of 4397.87 feet to a point, thence North 01
degree 38 minutes East a distance of 970.55 feet to a point, thence North
37 degrees 53 minutes East a distance of 1948.85 feet to a point, thence
North 00 degrees 37 minutes West a distance of 2783.92 feet to a point,
thence North 45 degrees 16 minutes East a distance of 1570.95 feet to a
concrete monument, thence North 00 degrees 27 minutes East a distance of
621.32 feet to a concrete monument, thence South 88 degrees 26 minutes 40
seconds East a distance of 1048.15 feet to a concrete monument, thence
South 00 degrees 41 minutes 10 seconds East a distance of 601.95 feet to a
concrete monument, thence South 89 degrees 33 minutes 20 seconds East along
the north line of Section 28, Township 14 North, Range 30 East a distance
of 1915.88 feet to a concrete monument, said monument being the northeast
corner of said Section 28, which is the northwest corner of Section 27, in
Township 14 North, Range 30 East, thence South 89 degrees 33 minutes 20
seconds East along the North line of said Section 27 to the boundary line
between the State of Georgia, and the State of Alabama; thence Southerly
and Southwesterly along said line between the State of Alabama and the
State of Georgia, as the same runs, to the northerly and southerly line
along the west side of Section 5, Township 13 North, Range 30 East, run
thence North 00 degrees 28
minutes East along the West line of said Section 5, to a point marked by an
iron pipe; thence North 00 degrees 28 minutes East along the west line of
said Section 5 a distance of 2825.00 feet to the northwest corner of
Section 5, and the point of beginning. (The Portion of said line from the
northerly line of a public road known as the Ferry Road to the northwest
corner of said Section 5, which is the southwest corner of Section 32,
Township 14 North, Range 30 East, being along an old fence.)
There is hereby expressly excepted from said described lands those lands heretofore taken in fee simple by condemnation by the United States of America and subject to flowage easements taken by the United States of America by condemnation and subject to the easement rights (a) for right of way for railroad purposes and (b) for a public road over and through said described lands, such public road right of way having been conveyed by the W.C. Bradley Company, to Russell County, Alabama, by deed recorded in Deed Record 387, pages 787-788, in the office of the Judge of Probate in and for Russell County, Alabama.
Said described lands hereby conveyed contain in the aggregate according to survey made, eight hundred eighty four and 47/100ths (884.47) acres (the "1993 Leased Land");
less and except the following property:
PARCEL l
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
PARCEL 2
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 3
At the Southwest corner of Section 22, Township 14 North, Range 30 East, Russell County, Alabama as the point of beginning, run along the South line of Section 22 N89 degrees-50'E 976.85 feet to the property line of the United States Government; thence along said property line N2 degrees-50'W 1296.69 feet to a branch which runs into Bluff Creek; thence along said branch the following courses; N41 degrees-41'W 340.67 feet;
S85 degrees-42'W 324.22 feet; S81 degrees-08'W 330.0 feet; N25 degrees-48'W 145.58 feet; S76 degrees-52'W 198.66 feet; N44 degrees-03'W 152.62 feet; S46 degrees-35'Q 84.21 feet; S21 degrees-OO'E 83.39 feet; N82 degrees-27'W 94.15 feet; S7 degrees-51'E 148.82 feet; S66 degrees-39'W 386.20 feet; S62 degrees-55'W 237.23 feet; S65 degrees-05'W 232.38 feet; S74 degrees-24'W 408.97 feet; S51 degrees-52'W 371.60 feet; S19 degrees-42'W 231.02 feet; S62 degrees-26'W 198.83 feet; N85 degrees-48'W 229.54 feet; S89 degrees- 23'W 159.01 feet; N83 degrees-01'W 327.29 feet; S80 degrees-02'W 437.03 feet; thence S59 degrees-27'W 318.79 feet; thence S3 degrees-28'E 199.83 feet; thence S1 degrees-16'E 607.22 feet; thence N87 degrees-24'E 343.43 feet; thence N82 degrees-04'E 516.01 feet; thence N70 degrees-45'E 540.58 feet; thence N89 degrees-18'E 472.15 feet; thence N0 degrees-01'E 400.58 feet; thence S89 degrees-59'E 446.0 feet; thence S0 degrees-01'W 395.0 feet; thence N89 degrees-18'E 171.06 feet; thence N46 degrees-28'E 463.45 feet to the South line of Section 21; thence along said Section line S90 degrees-48'E 749.92 feet to the point of beginning and containing 121.14 acres more or less.
PARCEL 4A
All that tract or parcel of and situated lying and being in Section 28, Township 14 North, Range 30 East, Russell County, Alabama, and being more particularly described as follows: To find the point of beginning, commence at the northwest corner of Section 28, Township 14 North, Range 30 East, which corner is marked by a concrete monument and, from said point, thence running South 89 degrees 33 minutes 20 seconds East, along the North line of said Section 28, a distance of 1,250.03 feet to an iron pin, said iron pin being the beginning point of the property herein conveyed; and from said point of beginning running thence South 89 degrees 33 minutes 20 seconds East, along the North line of said Section 28, a distance of 400.0 feet to a point; thence running South 01 degree 02 minutes 40 seconds West a distance of 704.0 feet, more or less, to a point; thence running South 45 degrees 16 minutes 00 seconds West a distance of 560.0 feet, more or less, to an iron pin; thence running North 01 degree 02 minutes 40 seconds East a distance of 1,076.19 feet to the point of beginning. The property herein described is bounded on the West and South by property of Grantee herein, on the North and East by property of Grantor herein and said described tract contains 8.2 acres, more or less.
PARCEL 4B
Commencing at the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument and proceeding east along the north line of said Section 28, which is the north property line of Georgia Kraft Company, a distance of two hundred forth-nine and ninety-six hundredths (249.96) feet to the point of intersection with the east right-of-way line of the Central of Georgia Railroad which point is marked by an iron pin, said iron pin being the point of beginning of the property herein conveyed. From said point of beginning
running thence over and along the west boundary of said tract number one,
which is the east right-of-way line of the Central of Georgia Railroad
which as fifty feet from and parallel to the center line of the main line
track, on a bearing of south one degree, two minutes and forty seconds west
(S 1 degree 02' 40" W) a distance of sixteen hundred forty-three and fifty-
nine hundredths (1643.59) feet to a point, thence along the west boundary
of the said tract number one, which is the east right-of-way line of the
Central of Georgia Railroad and is fifty (50) feet from and concentric with
the center line of the main line track, following a circular curve to the
right, having a radius of eight hundred sixty-four and forty-nine
hundredths (864.49) feet for an arc distance of three hundred seventy-two
and forty-three hundredths (372.43) feet to an iron pin marking the
southwest corner of said tract number one which is the point where the east
right-of-way line of the Central of Georgia Railroad main line terminates
on the north right-of-way line of the spur track serving the Georgia Kraft
Company mill, said point being fifty (50) feet from the center line of the
main line track and twenty-five (25) feet from the center line of the
aforesaid spur track; thence along the south boundary of said tract number
one, which is the north right-of-way line of the spur track serving the
Georgia Kraft Company mill and is twenty-five (25) feet from and parallel
to the center line of the aforesaid spur track, on a bearing of north
fifty-one degrees, fifty-two minutes and ten seconds east (N 51 degrees 52'
10" E) for a distance of thirteen-hundred fifty-nine and ninety-three
hundredths (1359.93) feet to an iron pin marking the south-east corner of
said tract number one; thence along the east line of said tract number one
on a bearing of north zero degrees and thirty-seven minutes west (N 0
degrees 37' W) a distance of fifty-three and fifty-six hundredths (53.56)
feet to an iron pan; thence along the east boundary of said tract number
one on bearing of north forty-five degrees and sixteen minutes east a
distance of thirty-seven and eighty hundredths (37.80) feet to an iron pin;
thence along the east boundary of said tract number one on a bearing of
north one degree, two minutes and forty seconds east (N 1 degree 02' 40"
E) a distance of one thousand seventy-six and nineteen hundredths (1076.19)
feet to an iron pin marking the north east corner of said tract number one
and being on the north line of the aforesaid Section 28; on a bearing of
north eighty-nine degrees thirty-three minutes and twenty seconds West (N
89 degrees 33' 20" W) a distance of one thousand and seven hundredths
(1000.07) feet to the point of beginning. The above described boundaries of
said tract number one enclose thirty-five and fifty-one hundredths (35.51)
acres, more or less;
excepting from the foregoing description of Parcel 4A and Parcel 4B the following described Tracts A, B and C:
TRACT A
A 200 foot wide strip of land for a road right-of-way situated in Sections 20, 28 and 29, Township 14 North, Range 30 East, in Russell County, Alabama, and being 100 feet on either side of and contiguous with the following described centerline:
Commence at the Northeast corner of Section 20, Township 14 North, Range 30 East and run North 86 degrees 56 minutes West for a distance of 751.7 feet; thence South 33 degrees 37 minutes West for a distance of 2187 0 feet; thence South 18 degrees 31 minutes West for a distance of 856.7 feet; thence South 19 degrees 29 minutes West for a distance of 507.5 feet; thence South 89 degrees 26 minutes East for a distance of 91.80 feet; thence from the last described course turn left 151 degrees 00 minutes and run Northwesterly 138.20 feet to a point in the center of Alabama Highway No. 165 and the point of beginning for said centerline; thence turn right 180 degrees 00 minutes and run Southeasterly along said centerline 230.00 feet to the point of a curve to the right; said curve having a 17 degree 32 minutes 16 seconds degree of curvature and an included angle of 62 degrees 45 minutes; thence continue along said curve an arc distance of 359.20 feet to the point of tangent to said curve; thence continue tangent to last described curve Southerly a distance of 1719.47 feet to the point of a curve to the left; said curve having a 10 degree 00 minutes 14 seconds degree of curvature and an included angle of 27 degrees 25 minutes 40 seconds; thence continue along said curve an arc distance of 274.51 feet to the point of tangent to said curve; thence continue tangent to the last described curve Southeasterly 1097.83 feet to the point of a curve to the left; said curve having a 12 degree 30 minute degree of curvature and an included angle of 101 degrees 50 minutes 41 seconds; thence continue along said curve an arc distance of 816.38 feet to the point of tangent to said curve; thence continue tangent to last described curve Northeasterly 1351.87 feet to the point of a curve to the right; said curve having a 22 degree 31 minutes 55 seconds degree of curvature and an included angle of 37 degrees 53 minutes 10 seconds; thence continue along said curve an arc distance of 168.14 feet to the intersection of said curve and the centerline of existing railroad; said intersection being the end of said centerline of roadway description.
Said strip of land lying in Sections 20, 28 and 29, Township 14 North, Range 30 East, Russell County, Alabama and containing 27.62 acres more or less.
TRACT B
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section
corner us marked by a concrete monument, this point thus determined being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
TRACT C
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 5
WASTE WOOD CONVEYOR TO SCALPER (C-28506) AREA AND TRUCK DUMPER (C-28505)
AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
31 degrees 59' 52' E, 291.25' to the point of beginning; thence S 0 degrees
00' W, 231.00' to a point on the north side of a rectangular area (Truck
Dumper) bounded by a N 792,366.0, N 792,326.5, and E 234,642.0, and E
234,765.5, said rectangular area being the point of ending; said land being
0.21 (plus or minus) acres;
NO. 1 BARK TRANSFER CONVEYOR (C-28503) AREA,
NO. 2 BARK TRANSFER CONVEYOR (C-28504) AREA,
BARK HOG STRUCTURE (C-28534) AREA
AND REFUSE CONVEYOR SCALPER (C-28533) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
31 degrees 59' 52" E, 291.25' to the point of beginning; thence S 8 degrees
20' 17" W, 284.46' to the center of a rectangular area which is parallel to
the last said course 22' north to south by 15' east to west; thence S 81
degrees 39' 40" E, 843.58' to a parallel rectangular area (Bark Hog
Structure) 26.00' north to south
(10.00 lying south of last said course) by 37.50'; thence Continue along last said course 27.00'; thence N 45 degrees 07' 38" E, 350.71' to the point of ending; said land being 0.63 + acres;
NO. 2 TURBINE AREA
A11 that portion of land, and structures lying thereon, On Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence S 25 degrees 19' 16" E, 663.98' to the point of beginning (N 792,550.0 E 233,534.0); thence S 0 degrees 00' W, 50.00'; thence N 90 degrees 00' E, 121.00'; thence N 0 degrees 00' W, 50.00'; thence N 90 degrees 00' W, 121.00' to the point of beginning; said land being 0.14 (plus or minus) acres;
SANITARY PACKAGE TREATMENT PLANT AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48 degrees 35' 13" W, 1186.73' to the point of beginning (N 791,565.0. E 233,610.0); thence S 0' 00" W, 12.00'; thence N 90 degrees 00' W, 64.00'; thence N. 0' 00" W 12.00'; thence N 90' 00" E, 64.00' to the point of beginning; said land being 0.02 (plus or minus) acres; and
NO. 3 BARK BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence S 29 degrees 39' 25" E, 461.76' to the point of beginning (N 792,748.92, E 233,478.50); thence N 90 degrees 00' E, 73.57'; thence S 0 degrees 00' W, 34.50'; thence N 90 degrees 00' W, 11.82'; thence S 0 degrees 00' W, 143.17'; thence N 90 degrees 00' W, 90.62'; thence N 0 degrees 00" W, 83.08'; thence N 90 degrees 00" E, 28.87'; thence N 0 degrees 00' W. 94.59' to the point of beginning; said land being 0.32 (plus or minus) acres;
PARCEL 6
NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511), CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513), AND CHIPS SCREEN HOUSE AREA (C-28515)
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
63 degrees 51' 31" E, 790.90' to the point of beginning; thence N 90
degrees 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90 degrees 00' W,
232.22'; thence S 15 degrees 17' 15" E, 479.72' to a point on the northmost
side of a rectangular area (Chip Screen House) which parallels last said
course and is 75.0' north to south (7.00' of which is west of last said
course) by 49.0' east to west; said rectangular area being the point of
ending; said land being 0.56+ acres;
CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
45 degrees 24' 34" E, 692.79' to the point of beginning; thence S 36
degrees 51' 02" E, 454.94' to the point of ending; said land being 0.29
(plus or minus) acres;
CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
HARDWOOD STORAGE CONVEYOR AREA (C-28537)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
71 degrees 34' 06" E, 600.24' to the point of beginning; thence S 71
degrees 04' 32" E, 640.91'; thence N 50 degrees 08' 32" E, 61.59' to the
point of ending; said land being 0.45 (plus or minus) acres;
CHIP CONVEYOR TO DIGESTER AREA (C-28521), CHIP CONVEYOR TO SURGE BIN AREA (C-28519), AND CHIP SILO AREA (C-28520)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S
48 degrees 21' 59" W, 84.29' to the point of beginning; thence S 56 degrees
07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a
radius of 15.00' and a central angle of 360 degrees 00' bounded by a
rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus
or minus) North-South; thence N 82 degrees 51' 32" E, 355.48' to the point
of ending; said land being 0.45 (plus or minus) acres;
NEW WASHER FACILITY AND BATCH DIGESTER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 48 degrees 06' 06" W, 35.94' to the point of beginning (N 792,374.0, E 234,473.25); thence S 0 degrees 00' W, 133.50'; thence N 90 degrees 00' W, 103.39'; thence S 0 degrees 00' W, 103.50'; thence 90 degrees 00' W, 48.00'; thence N 0 degrees 00' W, 55.75'; thence N 90 degrees 00' W, 80.00; thence S 0 degrees 00' W, 42.75'; thence N 90 degrees 00' W, 63.00; thence N 0 degrees 00' W, 110.00'; thence N45 degrees 00' E, 55.00'; thence N0 degrees 00' W, 23.11'; thence 90 degrees 00' E, 23.00'; thence N 0 degrees 00' W, 23.25'; thence N90 degrees 00' E, 170.00'; thence N 0 degrees 00' W, 28.75'; thence N 90 degrees 00' E, 62.50' to the point of beginning; said area being 1.01 (plus or minus) acres;
MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
All that portion of and, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48 degrees 46' 07" W, 591.71' to the point of beginning (N 791, 960.0 E 234,055.0); thence S 0 degrees 00' W, 170.00'; thence N 90 degrees 00' W, 111.00; thence 0 degrees 00' W, 170.00'; thence N 90 degrees 00' E, 111.00' to the point of beginning; said land being 0.43 (plus or minus) acres;
TURPENTINE RECOVERY FACILITY AREA
All that port on of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63 degrees 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234, 490.0); thence N 0' 00" W, 30.00'; thence N 90 degrees 00" E, 20.00'; thence S 0 degrees 00' W, 30.00; thence N 90 degrees 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523), DRUM AREA (C-28525, VIBRATING CONVEYORS AREA (C-28532), CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG. AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 80 degrees 22' 54" E, 879.79' to the point of beginning; thence N 0 degrees 00' W, 326.00'; thence N 90 degrees 00' E, 711.08'; thence S 0 degrees 00' W, 326.00'; thence N 90 degrees 00' W, 328.00'; thence S 0 degrees 00' W, 188.00'; thence N 90 degrees 00' W, 50.00'; thence N 0 degrees 00' W, 188.00'; thence N 90 degrees 00' W, 333.08' to the point of beginning; said land being 5.54 (plus or minus) acres;
AREA "B" MAINTENANCE SHOP AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11 degrees 04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence S 0 degrees 00" W, 82.00'; thence N 90 degrees 00" w, 52.00'; thence N 0 degrees 00' W, 82.00'; thence N 90 degrees 00' E, 52.00 to the point of beginning' said land being 0.10 (plus or minus) acres;
NEW LIME KILN/RECAUSTICIZING
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County or Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence N 70 degrees 51' 29" E, 267.79' to the point of beginning (N 793,238.0 E 233,503.0); thence N 90 degrees 00' E, 399.23'; thence S 0 degrees 00' W, 50.00'; thence N 90 degrees 00' W, 10.00'; thence S 0 degrees 00' W, 40.00'; thence N 90 degrees 00' W, 136.23'; thence N 0 degrees 00' W, 80.00'; thence N 90 degrees 00' W, 50.00'; thence S 0 degrees 00' W, 10.00'; thence N 90 degrees 00' W, 54.00'; thence S 0 degrees 00' W, 40.00'; thence N 90 degrees 00' E, 65.00'; thence S 0 degrees 00' W, 30.00'; thence N 90 degrees 00' W, 150.00'; thence N 0 degrees 00' W, 17.00'; thence N; 90 degrees 00' W, 64.00'; thence N 0 degrees 00' W, 73.00' to the point of beginning; said land being 0.657, more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
NO. 2 RECOVERY BOILER AREA
All that portion Of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40 degrees 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90 degrees 00' E, 36.30'; thence N 0 degrees 00' W, 20.50'; thence N 90 degrees 00' E, 72.26'; thence N 0 degrees 00' W, 14.83'; thence N 90 degrees 00' E, 110.50'; thence S 0 degrees 00' W, 42.58'; thence N 90 degrees 00' E, 26.00'; thence S 0 degrees 00' W, 81.00' thence N 90 degrees 00' W, 51.00' thence N 0 degrees 00" W, 25.12'; thence N 90 degrees 00' W, 72.26'; thence N 90 degrees 00' W, 20.50'; thence N degrees 00' W, 36.30'; thence N 0 degrees 00' W, 34.00' to the point of beginning; said land being 0.47 (plus or minus) acres;
NEW EVAPORATORS AND NEW TANKS AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19; E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 62 degrees 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90 degrees 00' E, 246.67'; thence along an arc South and East 53.41' having a radius of 34.00' with a central angle of 90 degrees 00'; thence S 0 degrees 00' W, 135.33'; thence along an arc South and West 53.41' having a radius of 34.00' with a central angle of 90 degrees 00'; thence N 90 degrees 00' W, 34.00'; thence N 0 degrees 00' W, 99.79'; thence N 90 degrees 00' W, 69.00'; thence N 59 degrees 47' 19" W, 91.42'; thence N 90 degrees 00' W, 64.67'; thence N 0 degrees 00' W, 57.54' to the point of beginning; said land being 0.72 (plus or minus) acres;
PARCEL 7
LIME MUD WASTE DISPOSAL FACILITIES
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid Coordinates N 793,150.19, E 233, 250.02 of the West Zone of the State of Georgia Coordinate System; thence N 86 degrees 38' 59" E, 253.41' to the point of beginning (N 793,165.00 E 233,503.00); thence N 90 degrees 00' E, 64.00'; thence S 0 degrees 00' E, 17.00'; thence N 90 degrees 00' E, 150.00; thence N 0 degrees 00' E, 30.00'; thence N 90 degrees 00' W, 65.00'; thence N 0 degrees 00' E, 40.00': thence N 90 degrees 00' E, 54.00'; thence N 0 degrees 00' E, 10.00'; thence N 90 degrees 00' E, 50.00'; thence S 0 degrees 00' E, 80.00'; thence N 90 degrees 00' E, 136.23'; thence N 0 degrees 00' E, 40.00'; thence N 90 degrees 00' E, 75.00'; thence S 0 degrees 00' E, 78.00;' thence N 90 degrees 00' W. 464.23'; thence 0 degrees 00' E, 55.00'; to the point of beginning; said land being 0.633 more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
PARCEL 8A
A tract of land situated in the Northwest Quarter of the Northeast Quarter (NW 1/4 of NE 1/4 ) and the Southwest Quarter of the Northeast Quarter (SW 1/4 of NE 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28 Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2806.62 feet to a point; thence turn right and run due South a distance of 1210.86 feet to a point at the western end of the Bark Handling System, such point being the beginning of the tract of land herein described.
Begin at such point of beginning, turn an angle to the left and run North 45 degrees 00 minutes East a distance of 63.64 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run easterly a distance of 310.00 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run southeasterly a distance of 63.64 feet to a point; thence turn an angle to the left 45 degrees 00 minutes and run easterly a distance of 270.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 155.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 136.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 94.35 feet to a point; thence turn an angle to the right 30 degrees 00 minutes and run southwesterly a distance of 263.00 feet to a
point; thence turn an angle to the left 30 degrees 00 minutes and run southerly a distance of 132.88 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 84.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 405.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 120.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 115.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 470.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 90.00 feet to the point of beginning.
PARCEL 8B
A tract of land situated an the Northeast Quarter of the Northwest Quarter (NE 1/4 of NW 1/4) and the Southeast Quarter of the Northwest Quarter (SE 1/4 of NW 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28, Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2290.86 feet to a point; thence turn right and run due South a distance of 1225.36 feet to a point at the Northeast corner of the #2 Bark Boiler Building, such point being the point of beginning of the tract of land herein described.
Being at such point of beginning, continue due South a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 67.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 15.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run northerly a distance of 40.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 34.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 40.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 18.00 feet to the point of beginning.
PARCEL 9
All that portion of land, and structures lying thereon, in Section 28, T14N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 794,023.97, E 232,940.10 of the West Zone of the State of Georgia Coordinate System; thence S 52(degrees) 11' 16" E 381.63' to the point of beginning (N 793,790.00 E 233,241.60); thence N 90 degrees 00' 00" E 760.00'; thence S 0 degrees 00' 00" E 102.00'; thence N 90 degrees 00' 00" E 128.04'; thence S 0 degrees 00' 00" E 960.48' (at existing utility bridge)' the N 90 degrees 00' 00" W 13.00'; thence N 0 degrees 00' 00" W 672.48', thence N 90 degrees 00' 00 W 875.04'; thence N 0 degrees 00' 00" E 390.00' to the point of beginning; said land being 7.85(plus or minus) acres; less than and except any structures not included in the Mead Corporation Contract No. 21-4162;
(collectively, (Parcels 1 through 9) the "Other Leased Land")
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Other Leased Land in order to provide all necessary or convenient ingress or egress between the 1993 Leased Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the 1993 Leased Land and the Other Leased Land;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Other Leased Land necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the 1993 Leased Land to the Other Leased Land, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Other Leased Land, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the 1993 Leased Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Other Leased Land; and
(d) An easement and right to create and maintain upon the Other Leased Land encroachments of equipment, structures or other improvements which will be included on the 1993 Leased Land and within the project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Other Leased Land;
but subject to the following easements over the 1993 Leased Land in favor of the Other Leased Land:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the 1993 Leased Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Other Leased Land and between the Other Leased Land and the 1993 Leased Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Other Leased Land;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the 1993 Leased Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Other Leased Land to another or between the Other Leased Land and the 1993 Leased Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of any facilities located on the Other Leased Land;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the 1993 Leased Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Other Leased Land, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other
improvements and appurtenances thereto, on the 1993 Leased Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Other Leased Land as encroachments upon the 1993 Leased Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the 1993 Leased Land in respect of any additional improvements constructed adjacent to the 1933 Leased Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the 1993 Leased Land.
subject in all cases to the following:
(1) Lease Agreement dated as of November 1, 1983 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1983;
(2) Lease Agreement dated as of December 1, 1983 between the Board as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Georgia Kraft Project), Series 1983;
(3) Lease Agreement dated as of December 1, 1985 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Georgia Kraft Project), Series 1985;
(4) Lease Agreement dated as of July 1, 1986 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1986;
(5) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988;
(6) Lease Agreement dated as of June 1, 1990 between the Board, as lessor, and Industrial Warehouse Services, Inc., as lessee, as amended and supplemented from time to time, relating to the
Board's First Mortgage Revenue Bonds (Industrial Warehouse Services, Inc.), Series 1990;
(7) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, 1989A, 1989B, 1989C, 1989D, 1989E, 1900A and 1991A;
(8) Lease Agreement dated as of September 1, 1990 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1990A;
(9) Lease Agreement dated as of October 1, 1990 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1990B; and
(10) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1993A.
EXHIBIT "B"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of June 1, 1993
PROJECT SUMMARY - INDUSTRIAL FACILITIES
RUSSELL COUNTY, ALABAMA
The Project in an expansion of and improvements to an existing coated linerboard mill (the "Mill") in Russell County, Alabama owned in part by the Board and leased to the Company and owned in part by the Company.
THIS FIRST AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of February 1, 1995 by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $48,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A (the "Series 1993A Bonds") pursuant to a Trust Indenture dated as of June 1, 1993 (the "Original Indenture") from the Board to AmSouth Bank of Alabama (formerly AmSouth Bank, N.A.), as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1993A Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of June 1, 1993 (the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1993A Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in connection with the Project. In that connection, the Board is issuing $88,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1995A (the "Series 1995A Bonds"), pursuant to the Indenture as supplemented by a First Supplemental Trust Indenture dated as of February 1, 1995 (the "First Supplemental Indenture") from the Board to the Trustee. The Indenture as supplemented by the First Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
Supplemental Indenture and this Amendment and the compliance by the Board
with all of the provisions of each thereof and of the Series 1995A Bonds
(i) are within the purposes, powers and authority of the Board, (ii) to the
best of the knowledge of the Board, have been done in full compliance with
the provisions of the Act, are legal and will not conflict with or
constitute on the part of the Board a violation of or a breach of or
default under, or result in the creation of any lien or encumbrance (other
than Permitted Encumbrances under the Agreement) upon any property of the
Board under the provisions of, its certificate of incorporation or Bylaws,
or any indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which the Board is a party or by which the Board
is bound, or any license, judgment, decree, law, statute, order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Board or any of its activities or properties, and (iii) have been
duly authorized by all necessary corporate action on the part of the Board.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (iii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1995A Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of this Amendment, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
MEAD COATED BOARD, INC.
By: /s/ SIGNATURE ILLEGIBLE ------------------------------------ Treasurer |
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
By: /s/ SIGNATURE ILLEGIBLE ------------------------------------ Chairman |
MEAD COATED BOARD, INC.
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
I, Robert P. Lane, a Notary Public in and for said County in said State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public corporation and instrumentality under the laws of the State of Alabama, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said public corporation.
GIVEN under my hand and seal of office, this 4th day of April, 1995.
/S/ ---------------------------------------- Notary Public |
(SEAL)
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
I, Robert A. Selak, Notary Public in and for said County in said State, hereby certify that Gregory T. Geswein, whose name as Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under the laws of the State of Delaware, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of the said instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 6th day of April, 1995.
/S/ ---------------------------------------- Notary Public |
(SEAL)
ROBERT A. SELAK, Attorney at Law
Notary Public, State of Ohio
My Commission has no expiration date.
Section 147.03 O. R. C.
Mead Coated Board, Inc., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A and Series 1995A of The Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing First Supplemental Trust Indenture, dated as of February 1, 1995, between the Board and AmSouth Bank of Alabama, supplementing a Trust Indenture, dated as of June 1, 1993 between the Board and AmSouth Bank of Alabama.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of February 1, 1995
MEAD COATED BOARD, INC.
By: /S/ G. T. Geswein ------------------------------------- Treasurer |
AMSOUTH BANK OF ALABAMA (formerly AmSouth Bank, N.A.), as Trustee under the Trust Indenture dated as of June 1, 1993 from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing First Amendment To Lease Agreement, dated as of February 1, 1995, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of June 1, 1993 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank of Alabama has caused this Consent of Trustee to be executed in its name and behalf as of February 1, 1995.
AMSOUTH BANK OF ALABAMA, as Trustee
By: /s/ Renee Ragland ------------------------------------- Title: CORPORATE TRUST OFFICER |
EXHIBIT "A"
to
First Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of February 1, 1995
The Project Land includes the following property:
The following real estate and premises situated in the County of Russell and State of Alabama:
Eight hundred eighty four and 47/100 (884.47) acres located in Sections 32,
33, 21, 28, and 27, Township 14 North, Range 30 East, and Section 5,
Township 13 North, Range 30 East, and beginning at the Southwest corner of
Section 32, Township 14 North, Range 30 East, Russell County, Alabama, run
thence North 00 degrees 38 minutes East a distance of 354.26 feet along a
fence line to a concrete monument, thence North 37 degrees 57 minutes 25
seconds East a distance of 2086.55 feet to a point, thence North 57 degrees
13 minutes East a distance of 4397.87 feet to a point, thence North 01
degree 38 minutes East a distance of 970.55 feet to a point, thence North
37 degrees 53 minutes East a distance of 1948.85 feet to a point, thence
North 00 degrees 37 minutes West a distance of 2783.92 feet to a point,
thence North 45 degrees 16 minutes East a distance of 1570.95 feet to a
concrete monument, thence North 00 degrees 27 minutes East a distance of
621.32 feet to a concrete monument, thence South 88 degrees 26 minutes 40
seconds East a distance of 1048.15 feet to a concrete monument, thence
South 00 degrees 41 minutes 10 seconds East a distance of 601.95 feet to a
concrete monument, thence South 89 degrees 33 minutes 20 seconds East along
the north line of Section 28, Township 14 North, Range 30 East a distance
of 1915.88 feet to a concrete monument, said monument being the northeast
corner of said Section 28, which is the northwest corner of Section 27, in
Township 14 North, Range 30 East, thence South 89 degrees 33 minutes 20
seconds East along the North line of said Section 27 to the boundary line
between the State of Georgia, and the State of Alabama; thence Southerly
and Southwesterly along said line between the State of Alabama and the
State of Georgia, as the same runs, to the northerly and southerly line
along the west side of Section 5, Township 13 North, Range 30 East, run
thence North 00 degrees 28 minutes East along the West line of said Section
5, to a point marked by an iron pipe; thence North 00 degrees 28 minutes
East along the west line of said Section 5 a distance of 2825.00 feet to
the northwest corner of Section 5, and the point of beginning. (The Portion
of said line from the northerly line of a public road known as
the Ferry Road to the northwest corner of said Section 5, which is the
southwest corner of Section 32, Township 14 North, Range 30 East, being
along an old fence.)
There is hereby expressly excepted from said described lands those
lands heretofore taken in fee simple by condemnation by the United States
of America and subject to flowage easements taken by the United States of
America by condemnation and subject to the easement rights (a) for right of
way for railroad purposes and (b) for a public road over and through said
described lands, such public road right of way having been conveyed by the
W.C. Bradley Company, to Russell County, Alabama, by deed recorded in Deed
Record 387, pages 787-788, in the office of the Judge of Probate in
and for Russell County, Alabama.
Said described lands hereby conveyed contain in the aggregate
according to survey made, eight hundred eighty four and 47/100ths (884.47)
acres (the "1993 Leased Land");
less and except the following property:
PARCEL 1
Beginning at a point which is 743.81 feet east and 477.58 feet south of the
northwest corner of section 28, Township 14 North, Range 30 East, Russell
County, Alabama, which section corner is marked by a concrete monument,
this point thus determined, being the northwest corner of the property to
be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then
north 128.84 feet, then west 85.0 feet to the point of beginning.
PARCEL 2
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the
Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell
County, Alabama, which corner is marked by a concrete monument, then
proceeding North a distance of 120.0 feet, then West 100.0 feet, then South
120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 3
At the Southwest corner of Section 22, Township 14 North, Range 30 East,
Russell County, Alabama as the point of beginning, run along the South line
of Section 22 N89(degrees)-50'E 976.85 feet to the property line of the
United States Government; thence along said property line N2(degrees)-50'W
1296.69 feet to a branch which runs into Bluff Creek; thence along said
branch the following courses; N41(degrees)-41'W 340.67 feet; S85(degrees)-
42'W 324.22 feet; S81(degrees)-08'W 330.0 feet; N25(degrees)-48'W 145.58
feet; S76(degrees)-52'W 198.66 feet; N44(degrees)-03'W 152.62 feet;
S46(degrees)-35'Q 84.21 feet; S21(degrees)-00'E 83.39 feet; N82(degrees)-
27'W 94.15 feet; S7(degrees)-51'E 148.82 feet; S66(degrees)-39'W 386.20
feet; S62(degrees)-55'W 237.23 feet; S65(degrees)-05'W 232.38 feet;
S74(degrees)-24'W 408.97 feet; S51(degrees)-52'W 371.60 feet; S19(degrees)-
42'W 231.02 feet; S62(degrees)-26'W 198.83 feet; N85(degrees)-48'W 229.54
feet; S89(degrees)-23'W 159.01 feet; N83(degrees)-01'W 327.29 feet;
S80(degrees)-02'W 437.03 feet; thence S59(degrees)-27'W 318.79 feet; thence
S3(degrees)-28'E 199.83 feet; thence S1(degrees)-16'E 607.22 feet; thence
N87(degrees)-24'E 343.43 feet; thence N82(degrees)-
04'E 516.01 feet; thence N70(degrees)-45'E 540.58 feet; thence N89(degrees)-18'E 472.15 feet; thence N0(degrees)-01'E 400.58 feet; thence S89(degrees)-59'E 446.0 feet; thence S0(degrees)-O1'W 395.0 feet; thence N89(degrees)-18'E 171.06 feet; thence N46(degrees)-28'E 463.45 feet to the South line of Section 21; thence along said Section line S90(degrees)-48'E 749.92 feet to the point of beginning and containing 121.14 acres more or less.
PARCEL 4A
All that tract or parcel of land situated lying and being in Section 28,
Township 14 North, Range 30 East, Russell County, Alabama, and being more
particularly described as follows: To find the point of beginning, commence
at the northwest corner of Section 28, Township 14 North, Range 30 East,
which corner is marked by a concrete monument and, from said point, thence
running South 89 degrees 33 minutes 20 seconds East, along the North line
of said Section 28, a distance of 1,250.03 feet to an iron pin, said iron
pin being the beginning point of the property herein conveyed; and from
said point of beginning running thence South 89 degrees 33 minutes 20
seconds East, along the North line of said Section 28, a distance of 400.0
feet to a point; thence running South 01 degree 02 minutes 40 seconds West
a distance of 704.0 feet, more or less, to a point; thence running South 45
degrees 16 minutes 00 seconds West a distance of 560.0 feet, more or less,
to an iron pin; thence running North 01 degree 02 minutes 40 seconds East a
distance of 1,076.19 feet to the point of beginning. The property herein
described is bounded on the West and South by property of Grantee herein,
on the North and East by property of Grantor herein and said described
tract contains 8.2 acres, more or less.
PARCEL 4B
Commencing at the Northwest corner of Section 28 in Township 14 North,
Range 30 East, Russell County, Alabama, which corner is marked by a
concrete monument and proceeding east along the north line of said Section
28, which is the north property line of Georgia Kraft Company, a distance
of two hundred forth-nine and ninety-six hundredths (249.96) feet to the
point of intersection with the east right-of-way line of the Central of
Georgia Railroad which point is marked by an iron pin, said iron pin being
the point of beginning of the property herein conveyed. From said point of
beginning running thence over and along the west boundary of said tract
number one, which is the east right-of-way line of the Central of Georgia
Railroad which is fifty feet from and parallel to the center line of the
main line track, on a bearing of south one degree, two minutes and forty
seconds west (S 1(degrees) 02' 40" W) a distance of sixteen hundred forty-
three and fifty-nine hundredths (1643.59) feet to a point, thence along the
west boundary of the said tract number one, which is the east right-of-way
line of the Central of Georgia Railroad and is fifty (50) feet from and
concentric with the center line of the main line track, following a
circular curve to the right, having a radius of eight hundred sixty-four
and forty-nine hundredths (864.49) feet
for an arc distance of three hundred seventy-two and forty-three hundredths (372.43) feet to an iron pin marking the southwest corner of said tract number one which is the point where the east right-of-way line of the Central of Georgia Railroad main line terminates on the north right-of-way line of the spur track serving the Georgia Kraft Company mill, said point being fifty (50) feet from the center line of the main line track and twenty-five (25) feet from the center line of the aforesaid spur track; thence along the south boundary of said tract number one, which is the north right of-way line of the spur track serving the Georgia Kraft Company mill and is twenty-five (25) feet from and parallel to the center line of the aforesaid spur track, on a bearing of north fifty-one degrees, fifty- two minutes and ten seconds east (N 51(degrees) 52' 10" E) for a distance of thirteen-hundred fifty-nine and ninety-three hundredths (1359.93) feet to an iron pin marking the south-east corner of said tract number one; thence along the east line of said tract number one on a bearing of north zero degrees and thirty-seven minutes west (N 0(degrees) 37' W) a distance of fifty-three and fifty-six hundredths (53.56) feet to an iron pin; thence along the east boundary of said tract number one on bearing of north forty- five degrees and sixteen minutes east a distance of thirty-seven and eighty hundredths (37.80) feet to an iron pin; thence along the east boundary of said tract number one on a bearing of north one degree, two minutes and forty seconds east (N 1(degrees) 02' 40" E) a distance of one thousand seventy-six and nineteen hundredths (1076.19) feet to an iron pin marking the north east corner of said tract number one and being on the north line of the aforesaid Section 28; on a bearing of north eighty-nine degrees thirty-three minutes and twenty seconds West (N 89(degrees) 33' 20" W) a distance of one thousand and seven hundredths (1000.07) feet to the point of beginning. The above described boundaries of said tract number one enclose thirty-five and fifty-one hundredths (35.51) acres, more or less;
excepting from the foregoing description of Parcel 4A and Parcel 4B the following described Tracts A, B and C:
TRACT A
A 200 foot wide strip of land for a road right-of-way situated in Sections 20, 28 and 29, Township 14 North, Range 30 East, in Russell County, Alabama, and being 100 feet on either side of and contiguous with the following described centerline:
Commence at the Northeast corner of Section 20, Township 14 North, Range 30 East and run North 86 degrees 56 minutes West for a distance of 751.7 feet; thence South 33 degrees 37 minutes West for a distance of 2187.0 feet; thence South 18 degrees 31 minutes West for a distance of 856.7 feet; thence South 19 degrees 29 minutes West for a distance of 507.5 feet; thence South 89 degrees 26 minutes East for a distance of 91.80 feet; thence from the last described course turn left 151 degrees 00 minutes and run Northwesterly 138.20 feet to a point in the center of
Alabama Highway No. 165 and the point of beginning for said centerline; thence turn right 180 degrees 00 minutes and run Southeasterly along said centerline 230.00 feet to the point of a curve to the right; said curve having a 17 degree 32 minutes 16 seconds degree of curvature and an included angle of 62 degrees 45 minutes; thence continue along said curve an arc distance of 359.20 feet to the point of tangent to said curve; thence continue tangent to last described curve Southerly a distance of 1719.47 feet to the point of a curve to the left; said curve having a 10 degree 00 minutes 14 seconds degree of curvature and an included angle of 27 degrees 25 minutes 40 seconds; thence continue along said curve an arc distance of 274.51 feet to the point of tangent to said curve; thence continue tangent to the last described curve Southeasterly 1097.83 feet to the point of a curve to the left; said curve having a 12 degree 30 minute degree of curvature and an included angle of 101 degrees 50 minutes 41 seconds; thence continue along said curve an arc distance of 816.38 feet to the point of tangent to said curve; thence continue tangent to last described curve Northeasterly 1351.87 feet to the point of a curve to the right; said curve having a 22 degree 31 minutes 55 seconds degree of curvature and an included angle of 37 degrees 53 minutes 10 seconds; thence continue along said curve an arc distance of 168.14 feet to the intersection of said curve and the centerline of existing railroad; said intersection being the end of said centerline of roadway description.
Said strip of land lying in Sections 20, 28 and 29, Township 14 North, Range 30 East, Russell County, Alabama and containing 27.62 acres more or less.
TRACT B
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
TRACT C
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 5
WASTE WOOD CONVEYOR TO SCALPER (C-28506) AREA AND TRUCK DUMPER
(C-28505) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also
including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell State of Alabama; thence N 31(degrees) 59' 52 E, 291.25' to the point of beginning; thence S 0(degrees) 00' W, 231.00' to a point on the north side of a rectangular area (Truck Dumper) bounded by a N 792,366.0, N 792,326.5, and E 234,642.0, and E 234,765.5, said rectangular area being the point of ending; said land being 0.21 (plus or minus) acres;
NO. 1 BARK TRANSFER CONVEYOR (C-28503) AREA,
NO. 2 BARK TRANSFER CONVEYOR (C-28504) AREA,
BARK HOG STRUCTURE (C-28534) AREA
AND REFUSE CONVEYOR SCALPER (C-28533) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 281 T 14 N, R 30 E, County of Russell, State of Alabama; thence N
31(degrees) 59' 52" E, 291.25' to the point of beginning; thence S
8(degrees) 20' 17" W, 284.46' to the center of a rectangular area which is
parallel to the last said course 22' north to south by 15' east to west;
thence S 81(degrees) 39' 40" E, 843.58' to a parallel rectangular area
(Bark Hog Structure) 26.00' north to south (10.00' lying south of last said
course) by 37.50'; thence continue along last said course 27.00'; thence N
45(degrees) 07' 38" E, 350.71' to the point of ending; said land being 0.63
(plus) acres;
NO. 2 TURBINE AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence S 25(degrees) 19' 16" E, 663.98' to the point of beginning (N 792,550.0 E 233,534.0); thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' E, 121.00'; thence N 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' W, 121.00' to the point of beginning; said land being 0.14 (plus or minus) acres;
SANITARY PACKAGE TREATMENT PLANT AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48(degrees) 35' 13" W, 1186.73' to the point of beginning (N 791,565.0. E 233,610.0); thence S O' 00" W, 12.00'; thence N 90(degrees) 00' W, 64.00'; thence N, O' 00" W 12.00', thence N 90' 00" E, 64.00' to the point of beginning; said land being 0.02 (plus or minus) acres; and
NO. 3 BARK BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence S 29(degrees) 39' 25" E, 461.76' to the point of beginning (N 792,748.92, E 233,478.50); thence N 90(degrees) 00' E, 73.57'; thence S 0(degrees) 00' W, 34.50'; thence N 90(degrees) 00' W, 11.82'; thence S 0(degrees) 00' W, 143.17'; thence N 90(degrees) 00' W, 90.62'; thence N 0(degrees) 00" W, 83.08'; thence N 90(degrees) 00" E, 28.87'; thence N 0(degrees) 00' W, 94.59' to the point of beginning; said land being 0.32 (plus or minus) acres;
PARCEL 6
NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513),
AND CHIPS SCREEN HOUSE AREA (C-28515)
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
63(degrees) 51' 31" E, 790.90' to the point of beginning; thence N
90(degrees) 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90(degrees)
00' W, 232.22'; thence S 15(degrees) 17' 15" E, 479.72' to a point on the
northmost side of a rectangular area (Chip Screen House) which parallels
last said course and is 75.0' north to south (7.00' of which is west of
last said course) by 49.0' east to west; said rectangular area being the
point of ending; said land being 0.56 (plus or minus) acres;
CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
All that portion of land and structures lying 14' on each side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
45(degrees) 24' 34" E,
692.79' to the point of beginning; thence S 36(degrees) 51' 02" E, 454.94' to the point of ending; said land being 0.29 (plus or minus) acres;
CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO HARDWOOD STORAGE
CONVEYOR AREA (C-28537)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
71(degrees) 34' 06" E, 600.24' to the point of beginning; thence S
71(degrees) 04' 32" E, 640.91 '; thence N 50(degrees) 08' 32" E, 61.59'
to the point of ending; said land being 0.45 (plus or minus) acres;
CHIP CONVEYOR TO DIGESTER AREA (C-28521), CHIP CONVEYOR TO SURGE BIN AREA (C-28519) AND CHIP SILO AREA (C-28520)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S 56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo) with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus or minus) North-South; thence N 82(degrees) 51' 32" E, 355.48' to the point of ending; said land being 0.45 (plus or minus) acres;
NEW WASHER FACILITY AND BATCH DIGESTER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 48(degrees) 06' 06" W, 35.94' to the point of beginning (N 792,374.0, E 234,473.25); thence S 0(degrees) 00' W, 133.50'; thence N 90(degrees) 00' W, 103.39'; thence S 0(degrees) 00' W, 103.50'; thence 90(degrees) 00' W, 48.00'; thence N 0(degrees) 00' W, 55.75'; thence N 90(degrees) 00' W, 80.00; thence S 0(degrees) 00' W, 42.75'; thence N 90(degrees) 00' W, 63.00; thence N 0(degrees) 00' W, 110.00'; thence N45(degrees) 00' E, 55.00'; thence N0(degrees) 00' W, 23.11'; thence 90(degrees) 00' E, 23.00'; thence N 0(degrees) 00' W, 23.25'; thence N90(degrees) 00' E, 170.00'; thence N 0(degrees) 00' W, 28.75';
thence N 90(degrees) 00' E, 62.50' to the point of beginning; said area being 1.01 (plus or minus) acres;
MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
All that portion of and, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48(degrees) 46' 07" W, 591.71' to the point of beginning (N 791, 960.0 E 234,055.0); thence S 0(degrees) 00' W 170.00'; thence N 90(degrees) 00' W, 111.00; thence 0(degrees) 00' W, 170.00'; thence N 90(degrees) 00' E, 111.00' to the point of beginning; said land being 0.43 (plus or minus) acres;
TURPENTINE RECOVERY FACILITY AREA
A11 that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 63(degrees) 26' 06" W, 11.18' to the point of beginning (N 792,345.0, E 234, 490.0); thence N 0' 00" W, 30.00'; thence N 90(degrees) 00" E, 20.00'; thence S 0(degrees) 00' W, 30.00'; thence N 90(degrees) 00' W, 20.00' to the point of beginning; said land being 0.01 (plus or minus) acres;
LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523), DRUM AREA
(C-28525, VIBRATING CONVEYORS AREA (C-28532), CHIPPER POWER FEED ROLLS
AREA (C-28528), CHIP BLDG. AREA (C-28535), AND BARK COLLECTING CONVEYOR
AREA (C-28531)
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence N 80(degrees) 22' 54" E, 879.79' to the point of beginning; thence N 0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' E, 711.08'; thence S 0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' W, 328.00'; thence S 0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 50.00'; thence N 0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 333.08' to the point of beginning; said land being 5.54 (plus or minus) acres;
AREA "B" MAINTENANCE SHOP AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 11(degrees) 04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence S 0(degrees) 00" W, 82.00'; thence N 90(degrees) 00" w, 52.00'; thence N 0(degrees) 00' W, 82.00'; thence N 90(degrees) 00' E, 52.00 to the point of beginning' said land being 0.10 (plus or minus) acres;
NEW LIME KILN/RECAUSTICIZING
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning (N 793,238.0 E 233,503.0); thence N 90(degrees) 00' E, 399.23'; thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' W, 10.00'; thence S 0(degrees) 00' W, 40.00'; thence N 90(degrees) 00' W, 136.23'; thence N 0(degrees) 00' W, 80.00'; thence N 90(degrees) 00' W, 50.00'; thence S 0(degrees) 00' W, 10.00'; thence N 90(degrees) 00' W, 54.00'; thence S 0(degrees) 00' W, 40.00'; thence N 90(degrees) 00' E, 65.00'; thence S 0(degrees) 00' W, 30.00'; thence N 90(degrees) 00' W, 150.00'; thence N 0(degrees) 00' W, 17.00'; thence N 90(degrees) 00' W, 64.00'; thence N 0(degrees) 00' W, 73.00' to the point of beginning; said land being 0.657, more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
NO. 2 RECOVERY BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N 0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N 0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S 0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S 0(degrees) 00' W, 81.00' thence N 90(degrees) 00' W, 51.00' thence N 0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 72.26'; thence N 90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N 0(degrees) 00' W, 34.00' to the point of beginning' said land being 0.47 (plus or minus) acres;
NEW EVAPORATORS AND NEW TANKS AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19; E 233,250.02, of the West Zone of the State of Georgia
Coordinate System; thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along an arc South, and East 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00; thence S 0(degrees) 00' W, 135.33'; thence along an arc South and West 53.41' having a radius of 34.00' with a central angle of 90(degrees) 00'; thence N 90(degrees) 00' W. 34.00'; thence N 0(degrees) 00' W, 99.79'; thence N 90(degrees) 00' W. 69.00'; thence N 59(degrees) 47' 19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00' W. 57.54' to the point of beginning; said land being 0.72 + acres;
PARCEL 7
LIME MUD WASTE DISPOSAL FACILITIES
All that portion of land, and structures lying thereon, is, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233, 250.02 of the West Zone of the State of Georgia Coordinate System; thence N 86(degrees) 38' 59" E, 253.41' to the point of beginning (N 793,165.00 E 233,503.00); thence N 90(degrees) 00' E, 64.00'; thence S 0(degrees) 00' E, 17.00'; thence N 90(degrees) 00' E, 150.00; thence N 0(degrees) 00' 5E, 30.00'; thence N 90(degrees) 00' W, 65.00'; thence N 0(degrees) 00' E, 40.00'; thence N 90(degrees) 00' E, 54.00'; thence N 0(degrees) 00' E, 10.00'; thence N 90(degrees) 00' E, 50.00'; thence S 0(degrees) 00' E, 80.00'; thence N 90(degrees) 00' 1E, 136.23'; thence N 0(degrees) 00' E, 40.00'; thence N 90(degrees) 00' E, 75.00'; thence S 0(degrees) 00' E, 78.00;' thence N 90(degrees) 00' W, 464.23'; thence 0(degrees) 00' E, 55.00'; to the point of beginning; said land being 0.633 more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
PARCEL 8A
A tract of land situated in the Northwest Quarter of the Northeast
Quarter (NW 1/4 of NE 1/4) and the Southwest Quarter of the Northeast
Quarter (SW 1/4 of NE 1/4) of Section 28, Township 14 North, Range 30 East,
Russell County Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28 Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2806.62 feet to a point; thence turn right and run due South a distance of 1210.86 feet to a point at the western end of the Bark Handling System, such point being the beginning of the tract of land herein described.
Begin at such point of beginning, turn an angle to the left and run North 45 degrees 00 minutes East a distance of 63.64 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run easterly a distance of 310.00 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run southeasterly a distance of 63.64
feet to a point; thence turn an angle to the left 45 degrees 00 minutes and run easterly a distance of 270.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 155.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 136.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 94.35 feet to a point; thence turn an angle to the right 30 degrees 00 minutes and run southwesterly a distance of 263.00 feet to a point; thence turn an angle to the left 30 degrees 00 minutes and run southerly a distance of 132.88 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 84.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 405.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 120.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 115.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 470.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 90.00 feet to the point of beginning.
PARCEL 8B
A tract of land situated in the Northeast Quarter of the Northwest Quarter (NE 1/4 of NW 1/4) and the Southeast Quarter of the Northwest Quarter (SE 1/4 of NW 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28, Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2290.86 feet to a point; thence turn right and run due South a distance of 1225.36 feet to a point at the Northeast corner of the #2 Bark Boiler Building, such point being the point of beginning of the tract of land herein described.
Being at such point of beginning, continue due South a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 67.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 15.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run northerly a distance of 40.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 34.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 40.00 feet to a point; thence turn an angle to the left 90 degrees 00
minutes and run easterly a distance of 18.00 feet to the point of beginning.
PARCEL 9
All that portion of land, and structures lying thereon, in Section 28,
T14N, R 30 E, County of Russell, State of Alabama, more particularly
described as follows:
Commence at a monument having grid coordinates N 794,023.97, E 232,940.10 of the West Zone of the State of Georgia Coordinate System; thence S 52(degrees) 11' 16" E 381.63' to the point of beginning (N 793,790.00 E 233,241.60); thence N 90(degrees) 00' 00" E 760.00'; thence S 0(degrees) 00' 00" E 102.00'; thence N 90(degrees) 00' 100" E 128.04'; thence S 0(degrees) 00' 00" E 960.48'(at existing utility bridge)' the N 90(degrees) 00' 00" W 13.00'; thence N 0(degrees) 00 00" W 672.48', thence N 90(degrees) 00' 00 W 875.04'; thence N 0(degrees) 00' 00" E 390.00' to the point of beginning; said land being 7.85(plus or minus) acres; less than and except any structures not included in the Mead Corporation Contract No. 21-4162;
(collectively, (Parcels 1 through 9) the "Other Leased Land")
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Other Leased Land in order to provide all necessary or convenient ingress or egress between the 1993 Leased Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the 1993 Leased Land and the Other Leased Land;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Other Leased Land necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the 1993 Leased Land to the Other Leased Land, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Other Leased Land, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control,
and other similar facilities to the 1993 Leased Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Other Leased Land; and
(d) An easement and right to create and maintain upon the Other Leased Land encroachments of equipment, structures or other improvements which will be included on the 1993 Leased Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Other Leased Land;
but subject to the following easements over the 1993 Leased Land in favor of the Other Leased Land:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the 1993 Leased Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Other Leased Land and between the Other Leased Land and the 1993 Leased Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Other Leased Land;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the 1993 Leased Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Other Leased Land to another or between the Other Leased Land and the 1993 Leased Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of any facilities located on the Other Leased Land;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the 1993 Leased Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Other Leased
Land, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the 1993 Leased Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Other Leased Land as encroachments upon the 1993 Leased Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the 1993 Leased Land in respect of any additional improvements constructed adjacent to the 1993 Leased Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the 1993 Leased Land.
subject in all cases to the following:
(1) Lease Agreement dated as of November 1, 1983 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1983;
(2) Lease Agreement dated as of December 1, 1983 between the Board as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Georgia Kraft Project), Series 1983;
(3) Lease Agreement dated as of December 1, 1985 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Georgia Kraft Project), Series 1985;
(4) Lease Agreement dated as of July 1, 1986 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1986;
(5) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988;
(6) Lease Agreement dated as of June 1, 1990 between the Board, as lessor, and Industrial Warehouse Services, Inc., as lessee, as amended and supplemented from time to time, relating to the Board's First Mortgage Revenue Bonds (Industrial Warehouse Services, Inc.) Series 1990;
(7) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, 1989A, 1989B, 1989C, 1989D, 1989E, 1900A and 1991A;
(8) Lease Agreement dated as of September 1, 1990 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1990A;
(9) Lease Agreement dated as of October 1, 1990 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1990B; and
(10) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1993A and Series 1995A.
Exhibit 10.xxv
LEASE AGREEMENT
between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
Dated as of September 1, 1997
This Lease Agreement and all right, title and interest of The Industrial Development Board of the City of Phenix City, Alabama in any rental payments and other receipts and revenues derived under this Lease Agreement have been assigned to AmSouth Bank of Alabama, as Trustee under the Trust Indenture, dated as of even date herewith, from The Industrial Development Board of the City of Phenix City, Alabama, which secures $150,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A and Additional Bonds as permitted and provided for under said Trust Indenture.
This instrument prepared by:
Thompson Hine & Flory LLP 312 Walnut Street 14th Floor Cincinnati, Ohio 45202
(The Table of Contents for this Lease Agreement is for convenience of reference
only and is not intended to define, limit or describe the scope or intent of any
provisions of this Lease Agreement.)
Page ---- ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION 1 Section 1.1 - Definitions 1 Section 1.2 - Rules of Construction 5 ARTICLE II REPRESENTATIONS AND WARRANTIES 5 Section 2.1 - Representations and Warranties by the Board 5 Section 2.2 - Representations and Warranties by the Company 8 ARTICLE III LEASING CLAUSES AND TITLE 9 Section 3.1 - Lease of the Project 9 Section 3.2 - Warranty of Title 9 Section 3.3 - Quiet Enjoyment 9 ARTICLE IV COMPLETION OF THE PROJECT FACILITIES; ISSUANCE OF THE BONDS 9 Section 4.1 - Agreement to Acquire, Construct and Install the Project Facilities 10 Section 4.2 - Agreement to Issue Bonds; Application of Bond Proceeds 10 Section 4.3 - Company Required to Pay Costs if Project Fund Insufficient 10 Section 4.4 - Board to Pursue Remedies Against Suppliers, Contractors and Subcontractors and Their Sureties 11 Section 4.5 - Issuance of Additional Bonds 11 ARTICLE V EFFECTIVE DATE OF THIS AGREEMENT; DURATION OF LEASE TERM; RENTAL PROVISIONS 12 Section 5.1 - Effective Date of This Agreement; Duration of Lease Term 12 Section 5.2 - Delivery and Acceptance of Possession 12 Section 5.3 - Rents and Other Amounts Payable 12 Section 5.4 - Place of Rental Payments 13 Section 5.5 - Obligations of Company Hereunder Absolute and Unconditional 13 Section 5.6 - Company's Performance Under Indenture 14 Section 5.7 - Payments in Lieu of Taxes 14 ARTICLE VI MAINTENANCE, MODIFICATION, TAXES AND INSURANCE 15 Section 6.1 - Maintenance and Modification of Project Facilities by Company 15 Section 6.2 - Removal of Portions of Project 16 Section 6.3 - Taxes, Other Governmental Charges and Utility Charges 16 Section 6.4 - Insurance Required 18 Section 6.5 - Application of Net Proceeds of Insurance 18 Section 6.6 - Additional Provisions Respecting Insurance 18 Section 6.7 - Other Board Expenses 18 Section 6.8 - Advances by Board or Trustee 19 Section 6.9 - Indemnification of Board and Trustee 19 Section 6.10 - Investment Credit 20 ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION 20 Section 7.1 - Damage and Destruction 20 |
Section 7.2 - Condemnation 20 Section 7.3 - Condemnation of Company-Owned Property 21 Section 7.4 - Further Assurances and Corrective Instruments 21 ARTICLE VIII SPECIAL AGREEMENTS 21 Section 8.1 - No Warranty of Condition or Suitability by the Board 21 Section 8.2 - Inspection of the Project 21 Section 8.3 - Company to Maintain Its Corporate Existence; Exceptions Permitted 22 Section 8.4 - Qualification in the State 22 Section 8.5 - Granting of Easements 22 Section 8.6 - Release of Certain Land 23 ARTICLE IX ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING; REDEMPTION; RENT PREPAYMENT AND ABATEMENT 24 Section 9.1 - Assignment and Subleasing 24 Section 9.2 - Pledge under Indenture 24 Section 9.3 - Restrictions on Sale of Project by Board 25 Section 9.4 - Redemption of Bonds 25 Section 9.5 - Prepayment of Rents 25 Section 9.6 - Rent Abatements if Bonds Paid Prior to Maturity 25 Section 9.7 - Reference to Bonds Ineffective After Bonds Paid 26 ARTICLE X EVENTS OF DEFAULT AND REMEDIES 26 Section 10.1 - Events of Default Defined 26 Section 10.2 - Remedies 27 Section 10.3 - No Remedy Exclusive 28 Section 10.4 - Agreement to Pay Attorneys' Fees and Expenses 28 Section 10.5 - No Additional Waiver Implied by One Waiver 28 Section 10.6 - Waiver of Appraisement, Valuation, etc. 28 Section 10.7 - Waiver of Events of Default 28 ARTICLE XI OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE PROJECT 29 Section 11.1 - General Option to Prepay Rent and Purchase Project 29 Section 11.2 - Conveyance on Purchase 29 Section 11.3 - Relative Positions of Options and Indenture 30 ARTICLE XII MISCELLANEOUS 30 Section 12.1 - Notices 30 Section 12.2 - Binding Effect 31 Section 12.3 - Severability 31 Section 12.4 - Amounts Remaining in Bond Fund 31 Section 12.5 - Amendments, Changes and Modifications 31 Section 12.6 - Execution Counterparts 31 Section 12.7 - Captions 31 Section 12.8 - Recording of Agreement 31 Section 12.9 - Law Governing Construction of Agreement 32 Section 12.10 - Net Lease 32 EXHIBIT "A" - DESCRIPTION OF PROJECT LAND A-1 |
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into as of September 1, 1997, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public corporation organized and existing under the laws of the State of Alabama, as lessor, and MEAD COATED BOARD, INC. (the "Company"), a corporation organized and existing under the laws of the State of Delaware and qualified to do business in the State of Alabama, as lessee;
WITNESSETH:
In consideration of the respective representations and agreements hereinafter contained, the Board and the Company agree as follows (provided, that in the performance of the agreements of the Board herein contained, any obligation it may thereby incur for the payment of money shall not be a general debt on its part but shall be payable solely out of the rents, payments and revenues derived from this Lease Agreement, the sale of the "Bonds" as hereinafter defined, the insurance and condemnation awards herein described and any other revenues arising out of or in connection with its ownership of the "Project" as hereinafter defined):
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 - Definitions. In addition to the words and terms elsewhere defined herein, the following words and terms as used herein shall have the following meanings unless the context or use clearly indicates another or different meaning or intent, and any other words and terms defined in the Indenture shall have the same meanings when used herein as assigned them in the Indenture unless the context or use clearly indicates another or different meaning or intent:
"Act" means the statutes codified as Code of Alabama 1975, Title 11, Chapter 54, Article 4, as amended and supplemented and at the time in force and effect;
"Additional Bonds" means the bonds of any series, other than the Bonds, authorized under the Indenture and authenticated and delivered in accordance with Section 401 of the Indenture.
"Agreement" means this Lease Agreement as it now exists and as it may hereafter be amended pursuant to Section 12.5 of this Lease Agreement and Article XV of the Indenture;
"Authorized Board Representative" means the person at the time designated to act on behalf of the Board by written certificate furnished to the Company and the Trustee containing the specimen signature of such person and signed on behalf of the Board by its Chairman or Vice Chairman. Such certificate may designate an alternate or alternates;
"Authorized Company Representative" means the person at the time designated to act on behalf of the Company by written certificate furnished to the Board and the Trustee containing the specimen signature of such person and signed on behalf of the Company by the President or any Vice President of the Company. Such certificate may designate an alternate or alternates;
"Board" means The Industrial Development Board of the City of Phenix City, Alabama, a public corporation of the State, and its successors and assigns;
"Bond Fund" means the Bond principal and interest payment fund created pursuant to Section 702 of the Indenture and within which have been established a general account and a special account. Any reference herein to the "Bond Fund" without further limitation or explanation shall be deemed to be a reference to the general account in the Bond Fund;
"bondholder" or "holder of the Bonds" means the registered owner of any Bond;
"Bonds" means the $150,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A, issued pursuant to the Indenture;
"City" means the City of Phenix City, Alabama, a municipal corporation of the State;
"Company" means the corporation designated as such in the first paragraph hereof and its successors and assigns, including any surviving, resulting or transferee corporation as provided in Section 8.3;
"default" means an event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default;
"Event of Default" means one of the events so denominated and described in
Section 10.1;
"Government Obligations" means (a) direct obligations of the United States of America, (b) obligations unconditionally guaranteed by the United States of America and (c) securities or receipts evidencing ownership interests in obligations or specified portions (such as principal or interest) of obligations described in (a) or (b);
"Indenture" means the Trust Indenture, of even date herewith, between the Board and the Trustee, including any indenture supplemental thereto;
"Lease Term" means the duration of the leasehold interest created hereby as specified in Section 5.1;
"Net Proceeds", when used with respect to any insurance or condemnation award, means the gross proceeds from the insurance or condemnation award with respect to which that term is used remaining after payment of all expenses (including attorneys' fees and any Extraordinary Expenses of the Trustee as defined in the Indenture) incurred in the collection of such gross proceeds;
"Notes" means those unpaid and outstanding industrial development notes issued by the Board, pursuant to resolutions of the Board to finance the costs of the Project;
"payment in full of the Bonds" specifically encompasses the situations described in Article X of the Indenture;
"Permitted Encumbrances" means, as of any particular time,
(a) liens for ad valorem taxes, special assessments or other governmental charges not then delinquent or permitted to exist as provided in Section 6.3;
(b) this Agreement and the security interests created herein;
(c) such utility, access or other easements and rights-of-way, restrictions, reservations, reversions and exceptions as the Authorized Company Representative certifies will not materially interfere with or impair the operation of the Project (or, if it is not being operated, the operations for which it was designed or last modified);
(d) unfiled and inchoate mechanics' and materialmen's liens for construction work in progress;
(e) mechanics', materialmen's, suppliers' and vendors' liens or other
similar liens not then payable, and those permitted to exist as provided in
Section 6.1;
(f) such minor defects, irregularities, encumbrances, easements, rights-of-ways and clouds on title as the Authorized Company Representative certifies do not, in the aggregate, materially impair the property affected thereby for the purpose for which it was acquired or is held by the Board or the Company;
(g) that certain Lease Agreement dated as of November 1, 1983 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(h) that certain Lease Agreement dated as of December 1, 1983 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(i) that certain Lease Agreement dated as of December 1, 1985 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(j) that certain Lease Agreement dated as of July 1, 1986 between Georgia Kraft Company and the Board, as amended in an Assignment, Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among the Board, Georgia Kraft Company and the Company;
(k) that certain Lease Agreement dated as of December 1, 1988 between the Company and the Board executed in connection with the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988;
(l) that certain Lease Agreement dated as of December 1, 1988 between the Company and the Board in connection with the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, 1989A, 1989B, 1989C, 1989D, 1989E, 1990A, 1991A and other bonds of the Board, as amended and supplemented from time to time;
(m) that certain Lease Agreement dated as of September 1, 1990 between the Company and the Board in connection with the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1990A;
(n) that certain Lease Agreement dated as of October 1, 1990 between the Company and the Board in connection with the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1990B;
(o) that certain Lease Agreement dated as of June 1, 1993 between the Company and the Board in connection with the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1993A;
(p) that certain Lease Agreement dated as of June 1, 1993 between the Company and the Board in connection with the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A, 1995A and other bonds of the Board, as amended and supplemented from time to time; and
(q) that certain Lease Agreement dated as of March 1, 1996 between the Company and the Board in connection with the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1996;
"person" means natural persons, firms, associations, corporations and public bodies;
"Project" means the Project Land and the Project Facilities, as they may at any time exist;
"Project Facilities" means the facilities acquired, constructed and installed with proceeds from the sale of the Notes, to the extent such Notes are refunded from the proceeds of the sale of the Bonds, as they may at any time exist;
"Project Fund" means the fund created pursuant to Section 601 of the Indenture;
"Project Land" means the real property described in Exhibit "A" attached hereto and by this reference made a part hereof, less such real property as may be released from this Agreement pursuant to Section 8.6 or taken by the exercise of the power of eminent domain as provided in Section 7.2;
"security interest" or "security interests" shall refer to the security interests created herein and in the Indenture and shall have the meaning set forth in the Uniform Commercial Code of the State;
"State" means the State of Alabama;
"Trustee" means AmSouth Bank of Alabama, or any co-trustee or any successor trustee under the Indenture.
Section 1.2 - Rules of Construction. Unless the context clearly indicates to the contrary:
(a) "Herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this Agreement and not solely to the particular Article, Section or subdivision hereof in which such word is used.
(b) Words importing the singular number shall include the plural number and vice versa, and any pronoun used herein shall be deemed to cover all genders.
(c) All references herein to particular Articles or Sections are references to Articles or Sections of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 - Representations and Warranties by the Board. The Board makes the following representations and warranties as the basis for the undertakings on its part herein contained:
instrument to which the Board is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby.
Section 2.2 - Representations and Warranties by the Company. The Company makes the following representations and warranties as the basis for the undertakings on its part herein contained:
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (ii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Agreement and to perform all of its obligations hereunder and thereunder.
(c) The willingness of the Board to issue the Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Project will create or preserve jobs and employment opportunities within the boundaries of the State of Alabama, thereby improving the economic welfare of the State of Alabama and the City.
(e) The acquisition, construction, and installation of any part of
the Project was not commenced, and no item which constitutes a part of the
Project was ordered, prior to the date of the resolution referred to in
Section 2.1(h) above that refers to such part of the Project.
(f) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Agreement, or performing any of its obligations hereunder; and the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(g) The acquisition, construction, and installation of the Project will comply in all material respects with all applicable zoning, planning, building, environmental and other regulations of the governmental authorities having jurisdiction of the Project, and all necessary permits, licenses, consents and permissions necessary for the Project have been or will be obtained.
(h) The acquisition, construction, and installation of the Project as well as its intended use and operation are in complete conformance with the purposes and provisions of the Act.
(i) No event has occurred and no condition exists that would constitute an "Event of Default" under this Agreement which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under this Agreement.
(j) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Agreement.
ARTICLE III
LEASING CLAUSES AND TITLE
Section 3.1 - Lease of the Project. The Board hereby leases to the Company, and the Company hereby leases from the Board, the Project at the rent set forth in Sections 5.3 and 5.7 and in accordance with the provisions hereof.
Section 3.2 - Warranty of Title. The Board for itself, its successors and assigns, warrants to the Company, its successors and assigns, that it has good and marketable fee simple title in and to the Project Land free from all encumbrances except Permitted Encumbrances. Upon the execution and delivery of this Agreement, the Board agrees that it will furnish to the Company an opinion of the Board's counsel stating that the Board holds such title in and to the Project Land.
Section 3.3 - Quiet Enjoyment. The Board warrants and covenants that it will defend the Company in the quiet enjoyment and peaceable possession of the Project, and all appurtenances thereto belonging, free from all claims of all persons whomsoever, throughout the Lease Term, so long as the Company shall perform the covenants, conditions and agreements to be performed by it hereunder, or so long as the period for remedying any default in such performance shall not have expired.
ARTICLE IV
COMPLETION OF THE PROJECT FACILITIES;
ISSUANCE OF THE BONDS
Section 4.1 - Agreement to Acquire, Construct and Install the Project Facilities. The Board agrees that it will cause the Project Facilities to be acquired, constructed and installed on the Project Land, wholly within the boundary lines thereof.
The Board agrees that it will enter into, or accept the assignment of, such
contracts as the Company may request in order to effectuate the purposes of this
Section but that it will not execute any other contract or give any order for
construction or for the acquisition and installation of any equipment relating
to the Project Facilities, unless and until the Authorized Company
Representative shall have approved the same in writing.
The Board hereby makes, constitutes and appoints the Company and The Mead Corporation as its true, lawful and agents for the acquisition, construction and installation of the Project Facilities, and the Company and The Mead Corporation have accepted such agency to act and do all things on behalf of the Board, to perform all acts and agreements of the Board hereinbefore provided in this Section, and to bring any actions or proceedings against any person which the Board might bring with respect thereto as the Company and The Mead Corporation shall deem proper. The Board hereby ratifies and confirms all actions of, and assumes and adopts all contracts entered into by, the Company and The Mead Corporation with respect to the Project Facilities prior to the date hereof. This appointment of the Company and The Mead Corporation to act as agents and all authority hereby conferred or granted is conferred and granted irrevocably until all activities in connection with the acquisition, construction and installation of the Project Facilities shall have been completed, and shall not be terminated prior thereto by act of the Board or of the Company and The Mead Corporation. So long as the Company is not in default hereunder, upon the completion of the Project (or at any time prior or subsequent thereto upon the request of the Company) the Board will assign to the Company all warranties and guarantees of all contractors, subcontractors, suppliers, architects and engineers for the furnishing of labor, materials or equipment or supervision or design in connection with the Project Facilities and any rights or causes of action arising from or against any of the foregoing.
Section 4.2 - Agreement to Issue Bonds; Application of Bond Proceeds. In order to provide funds for the payment of the cost of the acquisition, construction and installation of the Project Facilities through the refunding of the Notes, the Board agrees that it will authorize, sell and deliver the Bonds to the initial purchasers thereof. Upon receipt of the proceeds from the sale of the Bonds, the Board will deposit all accrued interest (if any) received upon the sale of the Bonds in the Bond Fund and will deposit the balance of the proceeds from said sale to the Project Fund, to be applied to the payment of the Notes upon receipt by the Trustee of Notes tendered for cancellation.
Section 4.3 - Company Required to Pay Costs if Project Fund Insufficient. If the moneys in the Project Fund available for payment of the costs of the Project Facilities should not be sufficient to pay the costs thereof in full, and if Additional Bonds are not issued to finance the completion of the Project Facilities, the Company agrees to complete the Project Facilities and to pay all that portion of the costs of the Project Facilities as may be in excess of the moneys available therefor in the Project Fund. The Board does not make any warranty, either express or implied, that the moneys which will be paid into the Project Fund and which, under the provisions hereof, will be available for payment of the costs of refunding the Notes, will be sufficient to pay all the costs which will be incurred in that connection. The Company agrees that if after exhaustion of the moneys in the Project Fund the Company should pay any portion of the costs of refunding the Notes pursuant to the provisions of this Section, it shall not be entitled to any reimbursement therefor from the Board or from the Trustee or from the holders or owners of any of the Bonds, nor shall it be entitled to any diminution in or postponement or abatement of the rents payable under Section 5.3.
Section 4.4 - Board to Pursue Remedies Against Suppliers, Contractors and Subcontractors and Their Sureties. At the direction and sole cost of the Company, the Board will promptly proceed, either separately or in conjunction with others, to exhaust the remedies of the Board against any defaulting supplier, contractor or subcontractor and against any surety therefor, for the performance of any contract made in connection with the Project Facilities. If the Company shall so notify the Board, the Company may, in its own name or in the name of the Board, prosecute or defend any action or proceeding or take any other action involving any such supplier, contractor, subcontractor or surety which the Company deems reasonably necessary, and in such event the Board agrees to cooperate fully with the Company and to take all action necessary, to the extent it might lawfully do so, to effect the substitution of the Company for the Board in any such action or proceeding. Any moneys recovered by way of damages, refunds, adjustments or otherwise in connection with the foregoing shall be paid to the Bond Fund.
Section 4.5 - Issuance of Additional Bonds. So long as there shall not have occurred and be continuing an event of default hereunder or under the Indenture, the Board shall, from time to time at the request of the Company, use its best efforts to issue Additional Bonds in aggregate principal amounts as requested by the Company under the terms and conditions provided herein and in the Indenture, but in no event shall the Board be liable for not issuing Additional Bonds. Additional Bonds may be issued to finance the (a) payment of outstanding Notes, (b) refunding all of the Bonds of any one or more series then outstanding, (c) payment of costs of the Project or (d) any combination of the foregoing; provided, in any case, that either prior to or contemporaneously with the issuance of Additional Bonds (i) the terms, conditions, manner of issuance, purchase price, delivery and contemplated disposition of the proceeds of the sale of such Additional Bonds shall have been approved in writing by the President or any Vice President of the Company, and (ii) the conditions specified in Article IV of the Indenture with respect to the issuance of such Additional Bonds shall have been satisfied.
ARTICLE V
EFFECTIVE DATE OF THIS AGREEMENT;
DURATION OF LEASE TERM; RENTAL PROVISIONS
Section 5.1 - Effective Date of This Agreement; Duration of Lease Term. This Agreement shall become effective upon its execution and delivery and the leasehold interest created hereby shall then begin, and, unless sooner terminated or extended under the provisions hereof (including particularly Articles X and XI), shall expire upon the latter to occur of the following events: (i) midnight, September 1, 2037, or (ii) payment in full of all Bonds and any Additional Bonds.
Section 5.2 - Delivery and Acceptance of Possession. The Board agrees to deliver to the Company sole and exclusive possession of the Project (subject to the right of the Trustee to enter thereon for inspection purposes and to the other provisions of Section 8.2) on the Completion Date and the Company agrees to accept possession of the Project upon such delivery; provided, however, that the Company shall be permitted such possession of the Project prior to the Completion Date as shall not interfere with the acquisition, construction and installation of the Project Facilities.
Section 5.3 - Rents and Other Amounts Payable. On March 1, 1998, and September 1 and March 1 in each year thereafter until payment in full of the Bonds, the Company shall pay to the Trustee, for the account of the Board, as rent for the Project, a sum of money equal to the amount payable on such date as principal of and interest on the Bonds, as provided in the Indenture. In any event, on each date on which a payment of principal or interest is payable on the Bonds, if at any such date the amount of money available in the Bond Fund is insufficient to make required payments of principal and interest on such date, the Company shall forthwith pay to the Trustee, in immediately available funds, the amount of any such deficiency.
Anything herein to the contrary notwithstanding, any amount of money at any time held by the Trustee in the Bond Fund shall be credited against the next succeeding payment of rent and shall reduce the payment to be then made by the Company; and further, if, and for so long as, the amount held by the Trustee in the Bond Fund should be sufficient to pay at the times required the principal of and the interest on all Bonds then remaining unpaid, the Company shall not be obligated to make any further rental payments under the provisions of this Section.
The Company agrees to pay to the Trustee until the principal of and the interest on the Bonds shall have been paid in full (i) an amount equal to the annual fee of the Trustee for the Ordinary Services of the Trustee rendered and its Ordinary Expenses incurred under the Indenture, (ii) the reasonable fees and charges of the Trustee and any other paying agent for acting as paying agent and as bond registrar and the reasonable fees of Trustee's counsel as provided in the Indenture, as and when the same become due, and (iii) the reasonable fees and charges of the Trustee for Extraordinary Services rendered by it and Extraordinary Expenses incurred by it, as such terms are defined in the Indenture, as and when the same become due; provided, that the Company may, without precipitating an Event of Default hereunder, withhold such payment to contest in good faith the necessity for any such Extraordinary Services and Extraordinary Expenses and the reasonableness of any such fees, charges or expenses.
If the Company should fail to make any of the payments required in this Section, the item or installment which the Company has failed to make shall continue as an obligation of the Company until the same shall have been fully paid, and the Company agrees to pay the same (in the case of interest, to the extent permitted by law) with interest thereon at the rate per annum equal to one percent per annum over the applicable interest rate borne by the Bonds, calculated as described in the Indenture. The provisions of this Section shall be subject to the provisions of Section 9.6.
Section 5.4 - Place of Rental Payments. The rents provided for in Section 5.3 and the interest on delinquent rents shall be paid directly to the Trustee for the account of the Board and will be deposited in the Bond Fund. The other payments
provided for in Section 5.3 shall be paid directly to the Trustee for its own use or for disbursement to any other paying agent, as the case may be.
Section 5.5 - Obligations of Company Hereunder Absolute and Unconditional. Subject to the provisions of Section 9.6, the obligations of the Company to make the payments required in Section 5.3 and to perform and observe the other agreements on its part contained herein shall be absolute and unconditional. Until such time as payment in full of the Bonds shall have been made, the Company (i) will not suspend or discontinue any payments provided for in Section 5.3 except to the extent the same have been prepaid, (ii) will perform and observe all of its other agreements contained herein, (iii) will not suspend or discontinue any payments provided for in Section 5.3 because of any right of set off which the Company may have against the Board, the Trustee or the holder of any Bond (provided that nothing herein shall prevent the assertion of any claim by the Company by separate suit or compulsory counterclaim) and (iv) except as provided in Section 11.1 will not terminate the Lease Term for any cause, including, without limiting the generality of the foregoing, failure of the Board to complete the Project Facilities, failure of the Board's title in and to the Project or any part thereof, any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either or any failure of the Board to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or in connection herewith or with the Indenture. Nothing contained in this Section shall be construed to release the Board from the performance of any of the agreements on its part herein contained; and if the Board should fail to perform any such agreement, the Company may institute such action against the Board as the Company may deem necessary to compel performance or recover its damages for nonperformance so long as such action shall not do violence to the agreements on the part of the Company contained in the preceding sentence. The Company may, however, at its own cost and expense and in its own name or in the name of the Board, prosecute or defend any action or proceeding or take any other action involving third persons which the Company deems reasonably necessary in order to insure the completion of the acquisition, construction and installation of the Project Facilities or to secure or protect its right of possession, occupancy and use of the Project hereunder, and in such event the Board hereby agrees to cooperate fully with the Company and to take all lawful action which is required to effect the substitution of the Company for the Board in any such action or proceeding if the Company shall so request.
Nothing contained herein shall be construed to be a waiver of any rights which the Company may have against the Board under this Agreement, or against other persons under this Agreement, the Indenture, or otherwise, or under any provision of law.
Section 5.6 - Company's Performance Under Indenture. The Company agrees, for the benefit of the holders from time to time of the Bonds, to do and perform all acts and things contemplated in the Indenture to be done or performed by it.
Section 5.7 - Payments in Lieu of Taxes. The Board and the Company acknowledge that, under present law, the Project, as long as it is owned by the Board, is exempt from ad valorem taxation by the State of Alabama or any political or taxing subdivision thereof, including Russell County.
The Company agrees that it will make payments in lieu of taxes ("PILOT Payments")so long as the Bonds and any Additional Bonds are outstanding and subject to the provisions of the last paragraph of this Section 5.7, in the amounts and at the times and in the manner set forth below. The PILOT Payments shall be payable on August 15 of each year, commencing August 15, 1998.
The aggregate PILOT Payments for each year shall be in an amount equal to 60% of the "education taxes" (as defined below) that would be payable with respect to the Project leased under the Lease, calculated as of the December 31 of the second preceding calendar year (each December 31, an "Assessment Date") with respect to those
The calculation of the amount of PILOT Payments due shall be made by the Company and by March 15 of each year, the Company will provide to the Board and each recipient of PILOT Payments a report of the amount due on the next succeeding August 15. The Company's calculations of the PILOT Payments, absent manifest error, shall be conclusive and binding upon the Board and all recipients of PILOT Payments.
The Board acknowledges that the obligation of the Company to made any payment of PILOT Payments as additional rent provided for in this section is conditioned upon the Project remaining exempt from ad valorem taxation throughout the period or term to which the Project so becomes subject to ad valorem taxation.
ARTICLE VI
MAINTENANCE, MODIFICATION, TAXES AND INSURANCE
Section 6.1 - Maintenance and Modification of Project Facilities by Company.
(a) Throughout the Lease Term, the Company shall at its own expense
(i) keep the Project Facilities in as reasonably safe condition as the
operation thereof will permit, and (ii) keep the Project Facilities in good
repair and in good operating condition, making from time to time all
necessary repairs thereto and renewals and replacements thereof.
(b) The Company may from time to time, in its sole discretion and at its own expense, make any additions, modifications or improvements to the Project Facilities, including installation of additional machinery, equipment, and related property that do not impair the effective use of the Project Facilities. All machinery, equipment and related personal property so installed by the Company shall not be subject to this Agreement but shall be subject to the Landlord's Lien created under the Code of Alabama 1975, Section 35-9-60. All such machinery, equipment and related personal property may be modified or removed at any time while there exists no event of default hereunder; provided, that any damage to the Project Facilities occasioned by such modification or removal shall be repaired by the Company at its own expense.
(c) The Company shall not permit any mechanics', materialmen's, suppliers', vendors' or other similar liens to be established or remain against the Project for labor or materials furnished or services rendered in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that if the Company shall first notify the Trustee of its intention so to do, the Company may in good faith contest any mechanics', materialmen's, suppliers', vendors' or other similar liens filed or established against the Project, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the Board of the Trustee shall notify the Company that by nonpayment of any such items the lien or security interests afforded by this Agreement or the Indenture as to any part of the Project or the rents, payments and revenues from the Project will be materially endangered or the Project or any part thereof or the rents, payments and revenues from the Project will be subject to loss or forfeiture, in which event the Company shall
promptly pay and cause to be satisfied and discharged all such unpaid items. The Board will cooperate fully with the Company in any such contest.
Section 6.2 - Removal of Portions of Project. The Board shall not be under any obligation to renew, repair or replace any inadequate, obsolete, worn out, unsuitable, undesirable, inappropriate or unnecessary items of machinery or equipment comprising the Project Facilities. If the Company in its sole discretion determines that any such items have become inadequate, obsolete, worn out, unsuitable, undesirable, inappropriate or unnecessary for its purposes at such time, the Company may remove such items from the Project and (on behalf of the Board) sell, trade in, or otherwise dispose of them (as a whole or in part) without any responsibility or accountability to the Board or the Trustee therefor, provided that such removal does not impair the operation of the Project Facilities.
The removal of any portion of the Project Facilities pursuant to the provisions of this Section shall not entitle the Company to any diminution in or postponement or abatement of the rents payable under Section 5.3.
The Company shall promptly report to the Trustee each such removal, substitution, sale, trade-in or other disposition.
Section 6.3 - Taxes, Other Governmental Charges and Utility Charges. The Company agrees to pay promptly as and when the same shall become due and payable, each and every lawful cost, expense and obligation of every kind and nature, foreseen or unforeseen, for the payment of which the Board or the Company is or shall become liable by reason of its estate or interest in the Project or any portion thereof, by reason of any right or interest of the Board or the Company in or under this Agreement, or by reason of or in any manner connected with or arising out of the possession, operation, maintenance, alteration, repair, rebuilding or use of the Project or any part thereof. The Company also agrees to pay and discharge all lawful real estate taxes, personal property taxes, water charges, sewer charges, assessments and all other lawful governmental taxes, impositions and charges of every kind and nature, ordinary and extraordinary, general or special, foreseen or unforeseen, whether similar or dissimilar to any of the foregoing, and all applicable interest and penalties thereon, if any, which at any time during the term of this Agreement shall be or become due and payable by the Board or the Company and which shall be lawfully levied, assessed or imposed
(a) upon or with respect to, or shall be or become liens upon, the Project or any portion thereof or any interest of the Board or the Company therein or under this Agreement;
(b) upon or with respect to the income or profits of the Board from the Project or under this Agreement;
(c) upon or with respect to the possession, operation, management, maintenance, alterations, repair, rebuilding, use or occupancy of the Project or any portion thereof; or
(d) upon this transaction or any document to which the Board or the Company is a party creating or transferring an interest or an estate in the Project;
under or by virtue of any present or future law, statute, ordinance, regulation or other requirement of any governmental authority, whether federal, state, county, city, municipal, school or otherwise.
The Company also agrees to pay any special assessments for public improvements or benefits for which the Company would have otherwise have been liable had it in fact been the owner of the Project.
The Company shall, at its sole cost and expense, procure or cause to be procured any and all necessary building permits, other permits, licenses and other authorizations required for the lawful and proper construction, use, occupation, operation and management of the Project. The Company also agrees to pay or cause to be paid all lawful charges for gas, water, sewer, electricity, light, heat, power, telephone and other utility and service used, rendered or supplied to, upon or in connection with the Project and the Board will cooperate with the Company in securing such permits, licenses and authorizations.
The Company may, at its own expense and in its own name and behalf or in the name and behalf of the Board, in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assessments and other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Board or the Trustee shall notify the Company that by nonpayment of any such items the lien or security interests afforded by this Agreement or the Indenture as to any part of the Project or the rents, payments and revenues derived from the Project will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event such taxes, assessments or charges shall be paid promptly. The Board shall cooperate fully with the Company in any such contest. If the Company shall fail to pay any of the foregoing items required by this Section to be paid by the Company and shall not cure any failure within any applicable curative provisions provided herein, the Board or the Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Board or the Trustee shall become an additional obligation of the Company to the one making the advancement, which amounts, together with interest thereon at the rate of interest borne by the Bonds from the date thereof, the Company agrees to pay.
Section 6.4 - Insurance Required. Throughout the Lease Term the Company shall keep the Project continuously insured (or maintain programs of self- insurance) against such risks as are customarily insured against by businesses of like size and type.
Section 6.5 - Application of Net Proceeds of Insurance. The insurance
carried pursuant to the provisions of Section 6.4 shall be applied as follows:
(i) the Net Proceeds of casualty insurance shall be applied as provided in
Section 7.1, and (ii) the Net Proceeds of public liability insurance shall be
applied toward extinguishment or satisfaction of the liability with respect to
which such insurance proceeds may be paid.
Section 6.6 - Additional Provisions Respecting Insurance. All insurance, if any, required in Section 6.4 may be taken out and maintained in insurance companies selected by the Company and may be written with deductible amounts comparable to those on similar policies carried by other companies engaged in businesses similar in size and type and other respects as the Company. The insurance hereby required may be contained in blanket policies or self-insurance programs now or hereafter maintained by the Company.
Section 6.7 - Other Board Expenses. Anything to the contrary herein notwithstanding, the Company shall pay any reasonable and necessary expenses not specifically mentioned herein which are incurred by the Board in connection with the Project, this Agreement, the Indenture, any financing statements or the Bonds, and which are not payable from the Project Fund pursuant to Section 4.2.
Section 6.8 - Advances by Board or Trustee. If the Company fails to maintain the insurance coverage required hereby or fails to keep the Project Facilities in as reasonably safe condition as its operating conditions will permit, or fails to keep the Project Facilities in good repair and good operating condition and shall not cure any failure within any applicable curative provisions provided herein, the Board or the Trustee may (but unless satisfactorily indemnified shall be under no obligation to) take out policies of insurance and pay the premiums on the same or make the required repairs, renewals and replacements; and all amounts so advanced therefor by the Board or the Trustee will become an additional obligation of the Company to the one making
the advancement, which amounts, together with interest thereon at the rate of interest borne by the Bonds from the date thereof, the Company agrees to pay.
Section 6.9 - Indemnification of Board and Trustee. The Company will also pay and discharge and will indemnify and hold harmless the Issuer and the members, officers, agents and employees of the Issuer from (a) any condition of the Project caused by the Company, (b) any liens, taxes, assessments, impositions and other charges upon payments by the Company to the Issuer hereunder, (c) any breach or default on the part of the Company in the performance of any of its obligations hereunder, (d) any act of negligence of the Company or of its agents, contractors, servants, employees or licensees, (e) any act of negligence of any assignee or sublessee of the Company, or of any agents, contractors, servants, employees or licensees of any assignee or sublessee of the Company and (f) any and all liability, damages, costs and expenses arising out of or resulting from the acquisition, construction and installation of the Project or the use or operation of the Project or any other activity carried out thereon or in connection therewith or the transactions contemplated by this Agreement and the Indenture, including the reasonable fees and expenses of counsel, except as the same may arise out of the negligence or misconduct on the part of the Issuer. If any such lien or charge is sought to be imposed upon payments, or any such taxes, assessments, impositions or other charges are sought to be imposed, or any such liability, damages, costs and expenses are sought to be imposed, the Issuer will give prompt notice to the Company, and the Company shall have the sole right and duty to assume, and will assume, the defense thereof, with full power to litigate, compromise or settle the same in its sole discretion. The indemnification provided by this Section shall survive the termination of this Agreement.
The Company agrees to indemnify the Trustee, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the Indenture, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties thereunder or hereunder.
Section 6.10 - Investment Credit. The Board agrees that any investment tax credit with respect to the Project or any part thereof shall be made available to the Company, and the Board will fully cooperate with the Company in any effort by the Company to avail itself of any such investment tax credit, but neither the Board nor the Trustee shall have any responsibility or liability for the Company's failure to receive any such investment tax credit. The Board agrees to cause the Trustee to cooperate in making any investment tax credit available to the Company.
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 - Damage and Destruction. If prior to payment in full of the
Bonds the Project Facilities are destroyed (in whole or in part) or are damaged
by fire or other casualty, the Company, or the Board at the Company's direction,
(i) shall promptly replace, repair, rebuild or restore the property damaged or
destroyed to substantially the same condition as existed prior to the event
causing such damage or destruction, with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be desired by the Company and as will not impair the operation of the Project
Facilities, and (ii) shall apply for such purpose so much as may be necessary of
any Net Proceeds of insurance resulting from claims for such losses, as well as
any additional moneys of the Company necessary therefor. All Net Proceeds of
insurance resulting from claims for such losses shall be paid to the Company.
If said Net Proceeds are not sufficient to pay in full the costs of such
replacement, repair, rebuilding or restoration, the Company shall nonetheless
complete the work thereof and shall pay that portion of the costs thereof in
excess of the amount of said Net Proceeds. The Company shall not, by reason of
the payment of such excess costs, be entitled to any reimbursement from the
Board or any abatement, diminution or postponement of the amounts payable under
Section 5.3.
Section 7.2 - Condemnation. If the title in and to, or the temporary use of, the Project or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any other person acting under governmental authority, the Company shall be obligated to continue to pay the rents specified in Section 5.3. The Board, the Company and the Trustee shall cause the Net Proceeds received by them or any of them, from any award made in such eminent domain proceeding, to be paid to and held by the Company and applied in one or more of the following ways at the election of the Company:
(a) the restoration of the Project to substantially the same condition as existed prior to the exercise of such power of eminent domain;
(b) the acquisition, by construction or otherwise, of other industrial facilities suitable for the Company's operations at the Project (which facilities will be deemed a part of the Project and available for use and occupancy by the Company and will be leased to the Company hereunder without the payment of any rents other than herein provided to the same extent as if such other improvements were specifically described herein); provided, that such facilities will be acquired subject to no liens, security interests or encumbrances prior to the lien afforded by this Agreement and the Indenture, other than Permitted Encumbrances; or
(c) payment into the Bond Fund to provide for payment in full of the Bonds at the earliest date that the Bonds may be called for redemption.
The Board shall cooperate fully with the Company in the handling and conduct of any prospective or pending eminent domain proceeding with respect to the Project or any part thereof and shall, to the extent it may lawfully do so, permit the Company to litigate in any such proceeding in the name and on behalf of the Board. In no event will the Board voluntarily settle, or consent to the settlement of, any prospective or pending eminent domain proceeding with respect to the Project or any part thereof without the written consent of the Company.
Section 7.3 - Condemnation of Company-Owned Property. The Company shall be entitled to the proceeds of any condemnation award or portion thereof made for damages to or taking of its own property or for damages on account of the taking of or interference with the Company's rights to possession, use or occupancy of the Project.
Section 7.4 - Further Assurances and Corrective Instruments. The Board and the Company agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project herein described or intended so to be or for carrying out the intention of or facilitating the performance of this Agreement.
ARTICLE VIII
SPECIAL AGREEMENTS
Section 8.1 - No Warranty of Condition or Suitability by the Board. THE BOARD MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE CONDITION OF THE PROJECT OR THAT IT WILL BE SUITABLE FOR THE COMPANY'S PURPOSES OR NEEDS. The Company releases the Board from, agrees that the Board shall not be liable for and agrees to hold the Board harmless against, any loss that may be occasioned by any cause whatsoever pertaining to the Project or the use thereof.
Section 8.2 - Inspection of the Project. The Company agrees that the Authorized Board Representative and any duly authorized agent of the Trustee shall have the right at all reasonable times to enter upon, examine and inspect the Project without interference or prejudice to the operations of the Company. The Company further agrees that any authorized agent of the Board or the Trustee shall have such rights of access to the Project as may be reasonable and necessary for the proper maintenance of the
Project in the event of the failure by the Company to perform its obligations under Section 6.1.
Section 8.3 - Company to Maintain Its Corporate Existence; Exceptions Permitted. The Company agrees that it will maintain its corporate existence, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it; provided that the Company may, without violating the agreement contained in this Section 8.3, consolidate with or merge into another corporation incorporated and existing under the laws of one of the states of the United States of America or the District of Columbia (a "domestic corporation"), or permit one or more other domestic corporations to consolidate with or merge into it, or sell or otherwise transfer to another domestic corporation all or substantially all of its assets as an entirety and thereafter dissolve, provided, if the Company is not the surviving, resulting or transferee corporation, as the case may be, such surviving, resulting or transferee corporation assumes in writing all of the obligations of the Company under the Agreement and qualifies to do business in the State. Notwithstanding the foregoing, the Company shall not dissolve or otherwise dispose of all or substantially all of its assets and shall not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it if, after giving effect to such action, a default would result under this Agreement or the Indenture.
Section 8.4 - Qualification in the State. The Company agrees (except as may be otherwise permitted pursuant to the provisions of Section 8.3) that throughout the Lease Term it will continue to be a corporation either organized under the laws of the State or duly qualified to do business in the State as a foreign corporation.
Section 8.5 - Granting of Easements. If no Event of Default shall have happened and be continuing, the Company may at any time or times cause to be granted easements (including party wall agreements), licenses, rights-of-way (temporary or perpetual and including the dedication of public highways) and other rights or privileges in the nature of easements with respect to any property included in the Project Land and such grant will be free from any lien or security interest created by this Agreement and the Indenture, or the Company may cause to be released existing easements, licenses, rights-of-way and other rights or privileges in the nature of easements, held with respect to any property included in the Project Land with or without consideration and the Board agrees that it shall execute and deliver and will cause and direct the Trustee to execute and deliver any instrument necessary or appropriate to confirm and grant or release any such easement, license, right-of-way or other right or privilege upon receipt of: (i) a copy of the instrument of grant or release, and (ii) a written application signed by the president or any vice president of the Company requesting the execution and delivery of such instrument and stating that such grant or release is not detrimental to the proper conduct of the business of the Company, and that such grant or release will not impair the effective use or interfere with the operations of the Project Facilities and will not materially weaken, diminish or impair the security intended to be given by or under this Agreement and the Indenture.
Section 8.6 - Release of Certain Land. Notwithstanding any other provision hereof, the parties hereto reserve the right to amend this Agreement at any time and from time to time by mutual agreement for the purpose of effecting the release of and removal of (i) any unimproved part of the Project Land (on which no component of the Project Facilities is located but on which parking, transportation or utility facilities may be located) on which the Board proposes to construct improvements for lease or sale to another person or persons under another and different agreement, or (ii) any part of the Project Land with respect to which the Board proposes to grant an easement or convey a fee interest or other title to a railroad or other public or private carrier or to any public utility or public body in order that transportation facilities or services by rail, water, road or other means or utility services for the Project may be provided, increased or improved; provided, that if at the time any such amendment is made any of the Bonds are outstanding, there shall be deposited with the Trustee the following:
(a) a copy of such amendment as executed;
(b) a resolution of the Board (i) stating that the Board is not in default under any of the provisions hereof or of the Indenture and that the Company is not to the knowledge of the Board in default under any of the provisions hereof, (ii) giving an adequate legal description of that portion of the Project Land to be released, (iii) stating the purpose for which the Board desires the release, (iv) stating that the improvements which will be constructed or the facilities and services which will be provided, increased or improved will be such as will promote at least one of the public purposes of the Board, and (v) requesting such release;
(c) a certificate of the president or any vice president of the Company indicating approval of such amendment and stating that the Company is not in default under any of the provisions hereof;
(d) a copy of the agreement between the Board and such other person wherein the Board agrees to construct improvements on the portion of the Project Land so requested to be released and agrees to lease or sell the same to such other person, and wherein such other person agrees to lease or purchase the same from the Board, or a copy of the instrument granting the easement or conveying the title or other interest to a railroad, public utility or public body; and
(e) a certificate of the Authorized Company Representative, dated not more than 60 days prior to the date of such amendment and stating that (i) the portion of the Project Land so proposed to be released is necessary or desirable for railroad, utility services or roads to benefit the Project or is not otherwise needed for the operation of the Project Facilities for the purposes hereinabove stated, and (ii) the release so proposed to be made will not impair the usefulness of the Project Facilities and will not destroy the means of ingress thereto and egress therefrom.
No release effected under this Section shall entitle the Company to any diminution in or postponement or abatement of the rents payable under Section 5.3.
ARTICLE IX
ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT
Section 9.1 - Assignment and Subleasing. This Agreement may be assigned by the Company without the necessity of obtaining the consent of the Board or the Trustee, subject, however, to the following conditions:
(a) no assignment (other than pursuant to Section 8.3) or sublease shall relieve the Company from primary liability for any of its obligations hereunder, and if any such assignment occurs, the Company shall continue to remain primarily liable for payment of the rents specified in Section 5.3 and for performance and observance of the other agreements on its part herein provided to be performed and observed by it; and
(b) the Company shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Board and to the Trustee a true and complete copy of each such assignment or sublease, as the case may be, together with any instrument of assumption.
Section 9.2 - Pledge under Indenture. Under the terms of the Indenture, the Board shall assign and create a security interest with respect to its interest in, and pledge all rents, revenues and receipts arising out of or in connection with its ownership of, the Project to the Trustee, as security for the payment of the principal
of and interest on the Bonds, but the Indenture and said assignment and pledge shall be subject and subordinate to this Agreement.
Section 9.3 - Restrictions on Sale of Project by Board. The Board agrees that, except as set forth in Section 9.2 or as otherwise provided in the Agreement and Indenture, it shall not (i) sell (other than as contemplated herein), assign, transfer or convey the Project during the Lease Term, (ii) create or suffer to be created any debt, lien or charge on the rents, payments and revenues arising out of or in connection with its ownership of the Project, or (iii) take any other action which might reasonably be construed as tending to cause or induce the levy or assessment of ad valorem taxes on the Project or on its title in and to the Project. If the laws of the State at the time permit such action to be taken, nothing contained in this Section shall prevent the consolidation of the Board with, or the merger of the Board into, or the transfer of the Project as an entirety to, any public corporation whose property and income are not subject to taxation and which has corporate authority to carry on the business of owning and leasing the Project; provided (a) that no such action shall be taken without the prior written consent of the Company, unless such action shall be required by law, and (b) that upon any such consolidation, merger or transfer, the due and punctual payment of the principal of and the interest on the Bonds, and the due and punctual performance and observance of all the agreements hereof to be kept and performed by the Board, shall be expressly assumed in writing by the corporation resulting from such consolidation or surviving such merger or to which the Project shall be transferred as an entirety.
Section 9.4 - Redemption of Bonds. The Board, at the request at any time of the Company and if the same are then redeemable, shall forthwith take all steps that may be necessary under the applicable redemption provisions of the Indenture to effect redemption of all or any portion of the Bonds, as may be specified by the Company, on the earliest applicable redemption date on which such redemption may be made under such applicable provisions or upon the date set for the redemption by the Company pursuant to Sections 7.2 or 11.1. As long as the Company is not in default hereunder and the Board is not obligated to call Bonds pursuant to the terms of the Indenture, the Board shall not redeem any Bond prior to its respective stated maturity unless requested to do so in writing by the Company.
Section 9.5 - Prepayment of Rents. There is expressly reserved to the Company the right, and the Company is authorized and permitted, at any time it may choose, so long as it is not in default hereunder, to prepay all or any part of the rents and other payments payable under Section 5.3, and the Board agrees that the Trustee may accept such prepayment when the same is tendered by the Company. All prepaid rents shall be credited on the rents specified in Section 5.3, and at the election of the Company shall be used for the redemption or purchase of Bonds in the manner and to the extent provided in the Indenture.
Section 9.6 - Rent Abatements if Bonds Paid Prior to Maturity. If at any time the Indenture is discharged in accordance with Article X of the Indenture, and if the Company is not at the time otherwise in default hereunder, the Company shall be entitled to use and occupy the Project, without the payment of rent during the interval (but otherwise on the terms and conditions hereof), from the date on which such moneys are in the Bond Fund to and including the later to occur of either (i) midnight, September 1, 2037 or (ii) payment in full of all Bonds and any Additional Bonds.
Section 9.7 - Reference to Bonds Ineffective After Bonds Paid. Upon payment in full of the Bonds and all fees and charges of the Trustee, all references herein to the Bonds and the Trustee shall be ineffective and neither the Trustee nor the holders of any of the Bonds shall thereafter have any rights hereunder, saving and excepting those that shall have theretofore vested. Reference is hereby made to Section 1002 of the Indenture which sets forth the conditions upon the existence or occurrence of which payment in full of the Bonds shall be deemed to have been made.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 - Events of Default Defined. The following shall be Events of Default hereunder and the term Event of Default shall mean, whenever it is used herein, any one or more of the following events:
(a) Failure by the Company to make any payment required under Section 5.3 on or before the date that the payment is due and continuance of such failure for ten Business Days after receipt of notice of such failure from the Trustee.
(b) Failure by the Company to observe and perform any other covenant, condition or agreement on its part under this Agreement (other than as referred to in subsection (a) of this Section), for a period of ninety (90) days after written notice, specifying such failure and requesting that it be remedied, shall be given to the Company by the Trustee, unless the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be remedied within the applicable period, the Board and the Trustee will not unreasonably withhold their consent to an extension of such time if it is possible to correct such failure and corrective action is instituted by the Company within the applicable period and diligently pursued until the default is corrected;
(c) Any warranty, representation or other statement by or on behalf of the Company contained in this Agreement, or any instrument furnished in compliance with or in reference to this Agreement or the Indenture, is false or misleading in any material respect; or
(d) The dissolution or liquidation of the Company or the filing by the Company of a voluntary petition in bankruptcy, or the commission by the Company of any act of bankruptcy, or adjudication of the Company as a bankrupt, or assignment by the Company for the benefit of its creditors, or the entry by the Company into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Company in any proceeding for its reorganization instituted under the provisions of the Federal bankruptcy statutes, as amended, or under any similar act which may hereafter be enacted. The term "dissolution or liquidation of the Company", as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Company resulting from a merger or consolidation of the Company into or with another corporation or a dissolution or liquidation of the Company following a transfer of all or substantially all of its assets as an entirety.
Section 10.2 - Remedies. Whenever any Event of Default shall have happened and be continuing, the Trustee, as the assignee of the Board under the Indenture, shall have the following rights and remedies:
(a) The Trustee may, and upon the written request of the holders of
not less than twenty-five percent (25%) in outstanding principal amount of
the Bonds, shall by notice in writing delivered to the Company, declare all
installments of rent payable under Section 5.3 for the remainder of the
Lease Term to be immediately due and payable. Upon such acceleration, the
amount then due and payable by the Company as accelerated rent shall be the
sum required to provide for payment in full of the Bonds on the earliest
possible date on which such payment can be made. Such sums as may then
become payable shall be paid into the Bond Fund and after payment in full
of the Bonds and payment of any cost occasioned by such Event of Default,
any excess moneys in the Bond Fund shall be returned to the Company as an
overpayment of rent. Notwithstanding the foregoing, upon the occurrence of
an Event of Default by reason of the occurrence of any event specified for
Section 10.1(d), all installments of rent payable under Section 5.3 for the
remainder of the Lease Term shall automatically become
and be immediately due and payable without any action by the Trustee or the Board being necessary.
(b) The Trustee may take whatever action at law or in equity may appear necessary or desirable to collect the rents and any other payments then due and thereafter to become due, or to enforce performance and observance of any covenant, condition or agreement of the Company hereunder;
(c) The Trustee may exercise any remedies provided for in the Indenture and, with respect to any security interest, the rights of a secured party under the Uniform Commercial Code of the State.
Any amounts collected pursuant to action taken under this Section shall be paid into the Bond Fund and applied in accordance with the provisions of the Indenture or, if payment in full of the Bonds has been made, shall be paid to the Company.
Section 10.3 - No Remedy Exclusive. No remedy herein conferred upon or reserved to the Board or the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon the occurrence of any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Board or the Trustee to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice or notices as may be herein expressly required. Such remedies as are reserved to the Board in this Article shall also extend to the Trustee, and the Trustee and the holders of the Bonds shall be deemed third-party beneficiaries of all agreements herein contained.
Section 10.4 - Agreement to Pay Attorneys' Fees and Expenses. If there should occur an Event of Default hereunder and the Board or the Trustee should employ attorneys or incur other expenses for the collection of rents or the enforcement of performance or observance of any agreement on the part of the Company herein contained, the Company agrees that it will on demand therefor pay to the Board or the Trustee the reasonable fee of such attorneys and such other reasonable expenses so incurred by the Board or the Trustee.
Section 10.5 - No Additional Waiver Implied by One Waiver. If any agreement contained herein should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.
Section 10.6 - Waiver of Appraisement, Valuation, etc. If there should occur an Event of Default hereunder, the Company agrees to waive, to the extent it may lawfully do so, the benefit of all appraisement, valuation, stay, extension or redemption laws now or hereafter in force, and all right of appraisement and redemption to which it may be entitled.
Section 10.7 - Waiver of Events of Default. Notwithstanding anything herein to the contrary, the Trustee shall be deemed to have waived any Event of Default hereunder and its consequences and to have rescinded any acceleration of the rents and other amounts payable under this Agreement whenever the Trustee has waived such Event of Default pursuant to the Indenture.
ARTICLE XI
OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE PROJECT
Section 11.1 - General Option to Prepay Rent and Purchase Project. At any time, the Company shall have, and is hereby granted, the option to prepay the rent payable
under Section 5.3, in whole or in part. To exercise the option granted in this paragraph, the Company shall, on or before the 20th day next preceding the date set for redemption of the Bonds (which shall be an interest payment date if less than all the Bonds are to be redeemed), give written notice to the Board and the Trustee of its intention to exercise the option granted in this section on such date and shall specify therein the principal amount of Bonds to be redeemed with the moneys received upon such prepayment. Upon the exercise of such option, the Company shall direct the Trustee to redeem Bonds in the principal amount and on the date specified in the notice referred to in the preceding sentence and shall make arrangements satisfactory to the Trustee for the giving of the required notice of redemption of Bonds. The purchase price which shall be paid to the Trustee by the Company in the event of its exercise of the option granted in this paragraph shall be the sum of the principal amount of the Bonds to be redeemed plus accrued interest thereon to the redemption date plus all fees and expenses of the Trustee and the paying agent accrued and to accrue through such redemption date.
The Company shall have the option to purchase the Project at any time, in the event that the Indenture is discharged pursuant to Article IX of the Indenture, by the Company (i) depositing irrevocably with the Trustee either moneys in an amount which shall be sufficient, or Government Obligations the principal of and interest on which when due will provide moneys which, together with the moneys, if any, deposited with or held by the Trustee at the same time and available for such purpose shall be sufficient pursuant to the Indenture, to pay the principal of and interest on all of the Bonds due and to become due on or prior to the redemption date (if the Bonds are to be redeemed) or maturity thereof; (ii) paying to the Trustee all Trustee's fees and expenses due in connection with the payment or redemption of any such Bonds, and, (iii) if any Bonds are to be redeemed on any date prior to their maturity, giving the Trustee irrevocable instructions to redeem such Bonds on such date and either evidence satisfactory to the Trustee that all redemption notices required by the Indenture have been given or irrevocable power authorizing the Trustee to give such redemption notices.
Section 11.2 - Conveyance on Purchase. At the closing of any purchase of
the Project as provided hereunder, the Board shall upon receipt of the purchase
price deliver to the Company documents conveying to the Company good and
marketable fee simple title in and to the Project, subject to the following:
(a) those liens, security interests and encumbrances (if any) to which such
title in and to said property was subject at the effective date of this
Agreement but excluding this Agreement and the Indenture; (b) those liens and
encumbrances created by the Company or to the creation or suffering of which the
Company consented; (c) those liens and encumbrances resulting from the failure
of the Company to perform or observe any of its agreements contained herein; and
(d) Permitted Encumbrances other than this Agreement and the Indenture.
Section 11.3 - Relative Positions of Options and Indenture. The options granted to the Company in this Article shall be and remain prior and superior to the Indenture and may be exercised whether or not there exists an Event of Default hereunder, provided that the existence of such Event of Default will not result in nonfulfillment of any condition to the exercise of any such option.
ARTICLE XII
MISCELLANEOUS
Section 12.1 - Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
(a) If to the Board - The Industrial Development
Board of the City of
Phenix City, Alabama
c/o Kenneth A. Roberts
SouthTrust Bank of Russell County
P.O. Box 2316
Phenix City, Alabama 36868-2316
with a copy to
Sydney Smith, Esq.
Smith & Smith
1503 Broad Street
Phenix City, Alabama 36867
(b) If to the Company- Mead Coated Board, Inc. Mead World Headquarters Dayton, Ohio 45463 Attention: Treasurer
with a copy to:
Thompson Hine & Flory LLP
312 Walnut Street
14th Floor
Cincinnati, Ohio 45202
Attention: Robert A. Selak
(c) If to the Trustee- AmSouth Bank of Alabama 1901 Sixth Avenue North Birmingham, Alabama 35203 Attention: Corporate Trust Department
A duplicate copy of each notice, certificate or other communication given hereunder by either the Board, the Company or the Trustee to any one of the others shall also be given to all of the others. The Board, the Company and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.
Section 12.2 - Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Board, the Company and their respective successors and assigns. To the extent provided herein and in the Indenture, the Trustee and the holders of the Bonds shall be deemed to be third party beneficiaries hereof, but nothing herein contained shall be deemed to create any right in, or to be for the benefit of, any other person not a party hereto.
Section 12.3 - Severability. If any provision hereof shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
Section 12.4 - Amounts Remaining in Bond Fund. Subject to and in accordance with the terms and conditions of Section 709 of the Indenture, certain surplus moneys remaining in the two accounts in the Bond Fund shall belong to and be paid to the Company by the Trustee as an overpayment of rents.
Section 12.5 - Amendments, Changes and Modifications. Except as otherwise provided herein or in the Indenture, subsequent to the date of issuance and delivery of the Bonds and prior to their payment in full, this Agreement may not be effectively amended or terminated without the written consent of the Trustee.
Section 12.6 - Execution Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 12.7 - Captions. The captions and headings herein are for convenience only and in no way define, limit or describe the scope or intent of any provisions hereof.
Section 12.8 - Recording of Agreement. This Agreement and every assignment and modification hereof shall be recorded in the Office of the Judge of Probate of Russell County, Alabama, or in such other office as may be at the time provided by law as the proper place for such recordation.
Section 12.9 - Law Governing Construction of Agreement. This Agreement shall be governed by, and construed in accordance with, the laws of the State.
Section 12.10 - Net Lease. This Agreement shall be deemed a "net lease", and the Company shall pay absolutely net during the Lease Term the rents specified herein, without abatement, deduction or set-off other than those herein expressly provided.
IN WITNESS WHEREOF, the Board and the Company have caused this Agreement to be executed in their respective corporate names as of the date first above written.
THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF
PHENIX CITY, ALABAMA
Kenneth A. Roberts
By: -------------------------------
Chairman
MEAD COATED BOARD, INC.
William B. Plummer
By: -------------------------------
Treasurer
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA )
)
COUNTY OF RUSSELL )
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO ) ) COUNTY OF MONTGOMERY ) |
CAROL D. CLEGG
NOTARY PUBLIC
ALABAMA STATE-AT-LARGE
EXHIBIT "A"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of September 1, 1997
The Project Land includes the following property:
The following real estate and premises situated in the County of Russell and State of Alabama:
Eight hundred eighty four and 47/100 (884.47) acres located in Sections 32,
33, 21, 28, and 27, Township 14 North, Range 30 East, and Section 5,
Township 13 North, Range 30 East, and beginning at the Southwest corner of
Section 32, Township 14 North, Range 30 East, Russell County, Alabama, run
thence North 00 degrees 38 minutes East a distance of 354.26 feet along a
fence line to a concrete monument, thence North 37 degrees 57 minutes 25
seconds East a distance of 2086.55 feet to a point, thence North 57 degrees
13 minutes East a distance of 4397.87 feet to a point, thence North 01
degree 38 minutes East a distance of 970.55 feet to a point, thence North
37 degrees 53 minutes East a distance of 1948.85 feet to a point, thence
North 00 degrees 37 minutes West a distance of 2783.92 feet to a point,
thence North 45 degrees 16 minutes East a distance of 1570.95 feet to a
concrete monument, thence North 00 degrees 27 minutes East a distance of
621.32 feet to a concrete monument, thence South 88 degrees 26 minutes 40
seconds East a distance of 1048.15 feet to a concrete monument, thence
South 00 degrees 41 minutes 10 seconds East a distance of 601.95 feet to a
concrete monument, thence South 89 degrees 33 minutes 20 seconds East along
the north line of Section 28, Township 14 North, Range 30 East a distance
of 1915.88 feet to a concrete monument, said monument being the northeast
corner of said Section 28, which is the northwest corner of Section 27, in
Township 14 North, Range 30 East, thence South 89 degrees 33 minutes 20
seconds East along the North line of said Section 27 to the boundary line
between the State of Georgia, and the State of Alabama; thence Southerly
and Southwesterly along said line between the State of Alabama and the
State of Georgia, as the same runs, to the northerly and southerly line
along the west side of Section 5, Township 13 North, Range 30 East, run
thence North 00 degrees 28 minutes East along the West line of said Section
5, to a point marked by an iron pipe; thence North 00 degrees 28 minutes
East along the west line of said Section 5 a distance of 2825.00 feet to
the northwest corner of Section 5, and the point of beginning. (The
Portion of said line from the northerly line of a public road known as the
Ferry Road to the northwest corner of said Section 5, which is the
southwest corner of Section 32, Township 14 North, Range 30 East, being
along an old fence.)
There is hereby expressly excepted from said described lands those
lands heretofore taken in fee simple by condemnation by the United States
of America and subject to flowage easements taken by the United States of
America by condemnation and subject to the easement rights (a) for right of
way for railroad purposes and (b) for a public road over and through said
described lands, such public road right of way having been conveyed by the
W.C. Bradley Company, to Russell County, Alabama, by deed recorded in Deed
Record 387, pages 787-788, in the office of the Judge of Probate in and for
Russell County, Alabama.
Said described lands hereby conveyed contain in the aggregate
according to survey made, eight hundred eighty four and 47/100ths (884.47)
acres (the "1997 Leased Land");
less and except the following property:
PARCEL 1
Beginning at a point which is 743.81 feet east and 477.58 feet south of the
northwest corner of section 28, Township 14 North, Range 30 East, Russell
County, Alabama, which section corner is marked by a concrete monument,
this point thus determined, being the northwest corner of the property to
be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then
north 128.84 feet, then west 85.0 feet to the point of beginning.
PARCEL 2
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the
Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell
County, Alabama, which corner is marked by a concrete monument, then
proceeding North a distance of 120.0 feet, then West 100.0 feet, then South
120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 3
At the Southwest corner of Section 22, Township 14 North, Range 30 East,
Russell County, Alabama as the point of beginning, run along the South line
of Section 22 N89 -50'E 976.85 feet to the property line of the United
States Government; thence along said property line N2 -50'W 1296.69 feet to
a branch which runs into Bluff Creek; thence along said branch the
following courses; N41 -41'W 340.67 feet; S85 -42'W 324.22 feet; S81 -08'W
330.0 feet; N25 -48'W 145.58 feet; S76 -52'W 198.66 feet; N44 -03'W 152.62
feet; S46 -35'Q 84.21 feet; S21 -00'E 83.39 feet; N82 -27'W 94.15 feet; S7
-51'E 148.82 feet; S66 -39'W 386.20 feet; S62 -55'W 237.23 feet; S65 -05'W
232.38 feet; S74 -24'W 408.97 feet; S51 -52'W 371.60 feet; S19 -42'W 231.02
feet; S62 -26'W 198.83 feet; N85 -48'W 229.54 feet; S89 -23'W 159.01 feet;
N83 -01'W 327.29 feet; S80 -02'W 437.03 feet; thence S59 -27'W 318.79 feet;
thence S3 -28'E 199.83 feet; thence S1 -16'E 607.22 feet; thence N87 -24'E
343.43 feet; thence N82 -04'E 516.01 feet; thence N70 -45'E 540.58 feet;
thence N89 -18'E 472.15 feet; thence N0 -01'E 400.58 feet; thence S89 -59'E
446.0 feet; thence S0 -01'W 395.0 feet; thence N89 -18'E 171.06 feet;
thence N46 -28'E 463.45 feet to the South line of Section 21; thence along
said Section line S90 -48'E 749.92 feet to the point of beginning and
containing 121.14 acres more or less.
PARCEL 4A
All that tract or parcel of land situated lying and being in Section 28,
Township 14 North, Range 30 East, Russell County, Alabama, and being more
particularly described as follows: To find the point of beginning, commence
at the northwest corner of Section 28, Township 14 North, Range 30 East,
which corner is marked by a concrete monument and, from said point, thence
running South 89 degrees 33 minutes 20 seconds East, along the North line
of said Section 28, a distance of 1,250.03 feet to an iron pin, said iron
pin being the beginning point of the property herein conveyed; and from
said point of beginning running thence South 89 degrees 33 minutes 20
seconds East, along the North line of said Section 28, a distance of 400.0
feet to a point; thence running South 01 degree 02 minutes 40 seconds West
a distance of 704.0 feet, more or less, to a point; thence running South 45
degrees 16 minutes 00 seconds West a distance of 560.0 feet, more or less,
to an iron pin; thence running North 01 degree 02 minutes 40 seconds East a
distance of 1,076.19 feet to the point of beginning. The property herein
described is bounded on the West and South by property of Grantee herein,
on the North and East by property of Grantor herein and said described
tract contains 8.2 acres, more or less.
PARCEL 4B
Commencing at the Northwest corner of Section 28 in Township 14 North,
Range 30 East, Russell County, Alabama, which corner is marked by a
concrete monument and proceeding east along the north line of said Section
28, which is the north property line of Georgia Kraft Company, a distance
of two hundred forth-nine and ninety-six hundredths (249.96) feet to the
point of intersection with the east
right-of-way line of the Central of Georgia Railroad which point is marked
by an iron pin, said iron pin being the point of beginning of the property
herein conveyed. From said point of beginning running thence over and along
the west boundary of said tract number one, which is the east right-of-way
line of the Central of Georgia Railroad which is fifty feet from and
parallel to the center line of the main line track, on a bearing of south
one degree, two minutes and forty seconds west (S 1 02' 40" W) a distance
of sixteen hundred forty-three and fifty-nine hundredths (1643.59) feet to
a point, thence along the west boundary of the said tract number one, which
is the east right-of-way line of the Central of Georgia Railroad and is
fifty (50) feet from and concentric with the center line of the main line
track, following a circular curve to the right, having a radius of eight
hundred sixty-four and forty-nine hundredths (864.49) feet for an arc
distance of three hundred seventy-two and forty-three hundredths (372.43)
feet to an iron pin marking the southwest corner of said tract number one
which is the point where the east right-of-way line of the Central of
Georgia Railroad main line terminates on the north right-of-way line of the
spur track serving the Georgia Kraft Company mill, said point being fifty
(50) feet from the center line of the main line track and twenty-five (25)
feet from the center line of the aforesaid spur track; thence along the
south boundary of said tract number one, which is the north right-of-way
line of the spur track serving the Georgia Kraft Company mill and is twenty
- five (25) feet from and parallel to the center line of the aforesaid spur
track, on a bearing of north fifty-one degrees, fifty-two minutes and ten
seconds east (N 51 52' 10" E) for a distance of thirteen-hundred fifty-nine
and ninety-three hundredths (1359.93) feet to an iron pin marking the south
- east corner of said tract number one; thence along the east line of said
tract number one on a bearing of north zero degrees and thirty-seven
minutes west (N 0 37' W) a distance of fifty-three and fifty-six hundredths
(53.56) feet to an iron pin; thence along the east boundary of said tract
number one on bearing of north forty-five degrees and sixteen minutes east
a distance of thirty-seven and eighty hundredths (37.80) feet to an iron
pin; thence along the east boundary of said tract number one on a bearing
of north one degree, two minutes and forty seconds east (N 1 02' 40" E) a
distance of one thousand seventy-six and nineteen hundredths (1076.19) feet
to an iron pin marking the north east corner of said tract number one and
being on the north line of the aforesaid Section 28; on a bearing of north
eighty-nine degrees thirty-three minutes and twenty seconds West (N 89 33'
20" W) a distance of one thousand and seven hundredths (1000.07) feet to
the point of beginning. The above described boundaries of said tract number
one enclose thirty-five and fifty-one hundredths (35.51) acres, more or
less;
excepting from the foregoing description of Parcel 4A and Parcel 4B the following described Tracts A, B and C:
TRACT A
A 200 foot wide strip of land for a road right-of-way situated in Sections 20, 28 and 29, Township 14 North, Range 30 East, in Russell County, Alabama, and being 100 feet on either side of and contiguous with the following described centerline:
Commence at the Northeast corner of Section 20, Township 14 North, Range 30 East and run North 86 degrees 56 minutes West for a distance of 751.7 feet; thence South 33 degrees 37 minutes West for a distance of 2187.0 feet; thence South 18 degrees 31 minutes West for a distance of 856.7 feet; thence South 19 degrees 29 minutes West for a distance of 507.5 feet; thence South 89 degrees 26 minutes East for a distance of 91.80 feet; thence from the last described course turn left 151 degrees 00 minutes and run Northwesterly 138.20 feet to a point in the center of Alabama Highway No. 165 and the point of beginning for said centerline; thence turn right 180 degrees 00 minutes and run Southeasterly along said centerline 230.00 feet to the point of a curve to the right; said curve having a 17 degree 32 minutes 16 seconds degree of curvature and an included angle of 62 degrees 45 minutes; thence continue along said curve an arc distance of 359.20 feet to the point of tangent to said curve; thence continue tangent to last described curve Southerly a distance of 1719.47 feet to the point of a curve to
the left; said curve having a 10 degree 00 minutes 14 seconds degree of curvature and an included angle of 27 degrees 25 minutes 40 seconds; thence continue along said curve an arc distance of 274.51 feet to the point of tangent to said curve; thence continue tangent to the last described curve Southeasterly 1097.83 feet to the point of a curve to the left; said curve having a 12 degree 30 minute degree of curvature and an included angle of 101 degrees 50 minutes 41 seconds; thence continue along said curve an arc distance of 816.38 feet to the point of tangent to said curve; thence continue tangent to last described curve Northeasterly 1351.87 feet to the point of a curve to the right; said curve having a 22 degree 31 minutes 55 seconds degree of curvature and an included angle of 37 degrees 53 minutes 10 seconds; thence continue along said curve an arc distance of 168.14 feet to the intersection of said curve and the centerline of existing railroad; said intersection being the end of said centerline of roadway description.
Said strip of land lying in Sections 20, 28 and 29, Township 14 North, Range 30 East, Russell County, Alabama and containing 27.62 acres more or less.
TRACT B
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
TRACT C
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 5
WASTE WOOD CONVEYOR TO SCALPER (C-28506) AREA AND
TRUCK DUMPER (C-28505) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
31 59' 52' E, 291.25' to the point of beginning; thence S 0 00' W,
231.00' to a point on the north side of a rectangular area (Truck Dumper)
bounded by a N 792,366.0, N 792,326.5, and E 234,642.0, and E 234,765.5,
said rectangular area being the point of ending; said land being 0.21 +
acres;
NO. 1 BARK TRANSFER CONVEYOR (C-28503) AREA,
NO. 2 BARK TRANSFER CONVEYOR (C-28504) AREA,
BARK HOG STRUCTURE (C-28534) AREA
AND REFUSE CONVEYOR SCALPER (C-28533) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
31 59' 52" E, 291.25' to the point of beginning; thence S 8 20' 17" W,
284.46' to the center
NO. 2 TURBINE AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
SANITARY PACKAGE TREATMENT PLANT AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NO. 3 BARK BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
PARCEL 6
NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511), CHIPS CONVEYOR TO
SCREEN HOUSE AREA (C-28513),
AND CHIPS SCREEN HOUSE AREA (C-28515)
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
63 51' 31" E, 790.90' to the point of beginning; thence N 90 00' W, 82.00;
thence S 0' 00" W, 8.75'; thence N 90 00' W, 232.22'; thence S 15 17' 15"
E, 479.72' to a point on the northmost side of a rectangular area (Chip
Screen House) which parallels last said course and is 75.0' north to south
(7.00' of which is west of last said
course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56+ acres;
CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
All that portion of land and structures lying 14' on each side of the following described centerline:
CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
HARDWOOD STORAGE CONVEYOR AREA (C-28537)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
CHIP CONVEYOR TO DIGESTER AREA (C-28521), CHIP CONVEYOR TO SURGE BIN AREA (C-28519), AND CHIP SILO AREA (C-28520)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
NEW WASHER FACILITY AND BATCH DIGESTER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
All that portion of and, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
TURPENTINE RECOVERY FACILITY AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523), DRUM AREA (C-28525, VIBRATING CONVEYORS AREA (C-28532), CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG. AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
AREA "B" MAINTENANCE SHOP AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NEW LIME KILN/RECAUSTICIZING
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence N 70 51' 29" E, 267.79' to the point of beginning (N 793,238.0 E 233,503.0); thence N 90 00' E, 399.23'; thence S 0 00' W, 50.00'; thence N 90 00' W, 10.00'; thence S 0 00' W, 40.00'; thence N 90 00' W, 136.23'; thence N 0 00' W, 80.00'; thence N 90 00' W, 50.00'; thence S
0 00' W, 10.00'; thence N 90 00' W, 54.00'; thence S 0 00' W, 40.00'; thence N 90 00' E, 65.00'; thence S 0 00' W, 30.00'; thence N 90 00' W, 150.00'; thence N 0 00' W, 17.00'; thence N 90 00' W, 64.00'; thence N 0 00' W, 73.00' to the point of beginning; said land being 0.657, more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
NO. 2 RECOVERY BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NEW EVAPORATORS AND NEW TANKS AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
PARCEL 7
LIME MUD WASTE DISPOSAL FACILITIES
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233, 250.02 of the West Zone of the State of Georgia Coordinate System; thence N 86 38' 59" E, 253.41' to the point of beginning (N 793,165.00 E 233,503.00); thence N 90 00' E, 64.00'; thence S 0 00' E, 17.00'; thence N 90 00' E, 150.00; thence N 0 00' E, 30.00'; thence N 90 00' W, 65.00'; thence N 0 00' E, 40.00'; thence N 90 00' E, 54.00'; thence N 0 00' E, 10.00'; thence N 90 00' E, 50.00'; thence S 0 00' E, 80.00'; thence N 90 00' E, 136.23'; thence N 0 00' E, 40.00'; thence N 90 00' E, 75.00'; thence S 0 00' E, 78.00;' thence N 90 00' W, 464.23'; thence 0 00' E, 55.00'; to the point of beginning; said land being 0.633 more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21- 3097A.
PARCEL 8A
A tract of land situated in the Northwest Quarter of the Northeast Quarter (NW 1/4 of NE 1/4) and the Southwest Quarter of the Northeast Quarter (SW 1/4 of NE 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28 Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2806.62 feet to a point; thence turn right and run due South a distance of 1210.86 feet to a point at the western end of the Bark Handling System, such point being the beginning of the tract of land herein described.
Begin at such point of beginning, turn an angle to the left and run North 45 degrees 00 minutes East a distance of 63.64 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run easterly a distance of 310.00 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run southeasterly a distance of 63.64 feet to a point; thence turn an angle to the left 45 degrees 00 minutes and run easterly a distance of 270.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 155.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 136.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 94.35 feet to a point; thence turn an angle to the right 30 degrees 00 minutes and run southwesterly a distance of 263.00 feet to a point; thence turn an angle to the left 30 degrees 00 minutes and run southerly a distance of 132.88 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 84.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 405.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 120.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 115.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 470.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 90.00 feet to the point of beginning.
PARCEL 8B
A tract of land situated in the Northeast Quarter of the Northwest Quarter (NE 1/4 of NW 1/4) and the Southeast Quarter of the Northwest Quarter (SE 1/4 of NW 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28, Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2290.86 feet to a point; thence turn right and run due South a distance of 1225.36 feet to a point at the Northeast corner of the #2 Bark Boiler Building, such point being the point of beginning of the tract of land herein described.
Being at such point of beginning, continue due South a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 67.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 15.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run northerly a distance of 40.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 34.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 40.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 18.00 feet to the point of beginning.
PARCEL 9
All that portion of land, and structures lying thereon, in Section 28,
T14N, R 30 E, County of Russell, State of Alabama, more particularly
described as follows:
Commence at a monument having grid coordinates N 794,023.97, E 232,940.10 of the West Zone of the State of Georgia Coordinate System; thence S 52 11' 16" E
(collectively, (Parcels 1 through 9) the "Other Leased Land")
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Other Leased Land in order to provide all necessary or convenient ingress or egress between the 1997 Leased Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the 1997 Leased Land and the Other Leased Land;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Other Leased Land necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the 1997 Leased Land to the Other Leased Land, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Other Leased Land, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the 1997 Leased Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Other Leased Land; and
(d) An easement and right to create and maintain upon the Other Leased Land encroachments of equipment, structures or other improvements which will be included on the 1997 Leased Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Other Leased Land;
but subject to the following easements over the 1997 Leased Land in favor of the Other Leased Land:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the 1997 Leased Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Other Leased Land and between the Other Leased Land and the 1997 Leased Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Other Leased Land;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the 1997 Leased Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Other Leased Land to another or between the Other Leased Land and the 1997 Leased Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of any facilities located on the Other Leased Land;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the 1997 Leased Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Other Leased Land, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the 1997 Leased Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Other Leased Land as encroachments upon the 1997 Leased Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the 1997 Leased Land in respect of any additional improvements constructed adjacent to the 1997 Leased Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the 1997 Leased Land.
subject in all cases to the following:
(1) Lease Agreement dated as of November 1, 1983 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1983;
(2) Lease Agreement dated as of December 1, 1983 between the Board as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Georgia Kraft Project), Series 1983;
(3) Lease Agreement dated as of December 1, 1985 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Georgia Kraft Project), Series 1985;
(4) Lease Agreement dated as of July 1, 1986 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1986;
(5) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988;
(6) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating
to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, 1989A, 1989B, 1989C, 1989D, 1989E, 1900A and 1991A;
(7) Lease Agreement dated as of June 1, 1990 between the Board, as lessor, and Industrial Warehouse Services, Inc., as lessee, as amended and supplemented from time to time, relating to the Board's First Mortgage Revenue Bonds (Industrial Warehouse Services, Inc.), Series 1990;
(8) Lease Agreement dated as of September 1, 1990 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1990A;
(9) Lease Agreement dated as of October 1, 1990 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1990B;
(10) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1993A;
(11) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A and 1995A; and
(12) Lease Agreement dated as of March 1, 1996 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1996.
THIS FIRST AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of August 1, 1998 by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board has previously issued and sold $150,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A (the "Bonds") pursuant to a Trust Indenture dated as of September 1, 1997 (the "Original Indenture") from the Board to AmSouth Bank (formerly AmSouth Bank of Alabama and AmSouth Bank, N.A.), as Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of September 1, 1997 (the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Bonds as the same becomes due and payable. In addition, the Company is required under Section 5.7 of the Agreement to make certain payments in lieu of taxes ("PILOT Payments").
The Board and the Company now wish to amend Section 5.7 to revise the provisions relating to PILOT Payments. Pursuant to Section 1502 of the Indenture, the Board and the Company are permitted to amend the Agreement so long as the Trustee and the Bondholder consent to such amendment. The Trustee and the Bondholder have consented to this Amendment.
NOW, THEREFORE, as contemplated by Section 12.5 of the Agreement and in accordance with Section 1502 of the Indenture, the parties hereto desire to amend the Agreement as follows:
Notwithstanding the foregoing, the PILOT Payments shall be reduced as set forth in this paragraph. The PILOT Payments in the aggregate due under this Agreement, combined with the payments in lieu of tax payable by the Company pursuant to Section 5.7 of the Lease Agreement dated as of June 1, 1993 (the "1993 Lease") between the Board and the Company, without giving effect to the reduction provided for in this paragraph, are herein referred to as the "Formula Payments". The total payments due under this Section 5.7 and under Section 5.7 of the 1993 Lease are herein referred to as the "Aggregate Payments". The Aggregate Payments due to the Phenix City Board of Education in August, 1998 shall be $139,867, reflecting a reduction from the Formula Payments otherwise due to the Phenix City Board of Education. The Aggregate Payments due to the Russell County Board of Education in August, 1998 shall be $82,256, reflecting a reduction from the Formula Payments otherwise due to the Russell County Board of Education. The Aggregate Payments due to the Russell County Board of Education in August, 1999 shall be reduced by $6,551 from the Formula Payments otherwise due to the Russell County Board of Education. The Aggregate Payments due to Russell County in August, 1998 and each successive year thereafter shall be reduced from the Formula Payments otherwise due to Russell County to $61,894 until the aggregate amount of such reductions from the Formula Payment totals $135,310; provided that in the year in which such aggregate reductions would exceed $135,310, such reduction from the Formula Payment shall be in an amount equal to the amount necessary to cause the aggregate reductions to total $135,310.
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
PHENIX CITY, ALABAMA
Kenneth A. Roberts
By:--------------------------------
Chairman
MEAD COATED BOARD, INC.
Timothy R. McLevish
By: -------------------------------
Treasurer
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
SYDNEY S. SMITH
NOTARY PUBLIC
ALABAMA STATE-AT-LARGE
(SEAL)
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
Phyllis M. Crabill
In and for the State of Ohio
(SEAL)
Mead Coated Board, Inc., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A of The Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing First Amendment To Lease Agreement, dated as of August 1, 1998, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of September 1, 1997, as amended between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of August 1, 1998.
MEAD COATED BOARD, INC.
Timothy R. McLevish
By: -------------------------------
Treasurer
AMSOUTH BANK, as Trustee under the Trust Indenture dated as of September 1, 1997, as amended, from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing First Amendment To Lease Agreement, dated as of August 1, 1998, between the Board and Mead Coated Board, Inc., amending the Lease Agreement dated as of September 1, 1997 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, AmSouth Bank has caused this Consent of Trustee to be executed in its name and behalf as of August 1, 1998.
AMSOUTH BANK, as Trustee
Lyn R. Cone
By: -------------------------------
Title: Assistant Vice President
EXHIBIT "A"
to
First Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of August 1, 1998
The Project Land includes the following property:
The following real estate and premises situated in the County of Russell and State of Alabama:
Eight hundred eighty four and 47/100 (884.47) acres located in Sections 32,
33, 21, 28, and 27, Township 14 North, Range 30 East, and Section 5,
Township 13 North, Range 30 East, and beginning at the Southwest corner of
Section 32, Township 14 North, Range 30 East, Russell County, Alabama, run
thence North 00 degrees 38 minutes East a distance of 354.26 feet along a
fence line to a concrete monument, thence North 37 degrees 57 minutes 25
seconds East a distance of 2086.55 feet to a point, thence North 57 degrees
13 minutes East a distance of 4397.87 feet to a point, thence North 01
degree 38 minutes East a distance of 970.55 feet to a point, thence North
37 degrees 53 minutes East a distance of 1948.85 feet to a point, thence
North 00 degrees 37 minutes West a distance of 2783.92 feet to a point,
thence North 45 degrees 16 minutes East a distance of 1570.95 feet to a
concrete monument, thence North 00 degrees 27 minutes East a distance of
621.32 feet to a concrete monument, thence South 88 degrees 26 minutes 40
seconds East a distance of 1048.15 feet to a concrete monument, thence
South 00 degrees 41 minutes 10 seconds East a distance of 601.95 feet to a
concrete monument, thence South 89 degrees 33 minutes 20 seconds East along
the north line of Section 28, Township 14 North, Range 30 East a distance
of 1915.88 feet to a concrete monument, said monument being the northeast
corner of said Section 28, which is the northwest corner of Section 27, in
Township 14 North, Range 30 East, thence South 89 degrees 33 minutes 20
seconds East along the North line of said Section 27 to the boundary line
between the State of Georgia, and the State of Alabama; thence Southerly
and Southwesterly along said line between the State of Alabama and the
State of Georgia, as the same runs, to the northerly and southerly line
along the west side of Section 5, Township 13 North, Range 30 East, run
thence
North 00 degrees 28 minutes East along the West line of said Section 5, to a point marked by an iron pipe; thence North 00 degrees 28 minutes East along the west line of said Section 5 a distance of 2825.00 feet to the northwest corner of Section 5, and the point of beginning. (The Portion of said line from the northerly line of a public road known as the Ferry Road to the northwest corner of said Section 5, which is the southwest corner of Section 32, Township 14 North, Range 30 East, being along an old fence.)
There is hereby expressly excepted from said described lands those lands heretofore taken in fee simple by condemnation by the United States of America and subject to flowage easements taken by the United States of America by condemnation and subject to the easement rights (a) for right of way for railroad purposes and (b) for a public road over and through said described lands, such public road right of way having been conveyed by the W.C. Bradley Company, to Russell County, Alabama, by deed recorded in Deed Record 387, pages 787-788, in the office of the Judge of Probate in and for Russell County, Alabama.
Said described lands hereby conveyed contain in the aggregate according to survey made, eight hundred eighty four and 47/100ths (884.47) acres (the "1997 Leased Land");
less and except the following property:
PARCEL 1
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
PARCEL 2
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 3
At the Southwest corner of Section 22, Township 14 North, Range 30 East, Russell County, Alabama as the point of beginning, run along the South line of Section 22 N89 -50'E 976.85 feet to the property line of the United States Government; thence along said property line N2 -50'W 1296.69 feet to a branch which runs into Bluff Creek; thence along said branch the following courses;
N41 -41'W 340.67 feet; S85 -42'W 324.22 feet; S81 -08'W 330.0 feet; N25 -
48'W 145.58 feet; S76 -52'W 198.66 feet; N44 -03'W 152.62 feet; S46 -35'Q
84.21 feet; S21 -00'E 83.39 feet; N82 -27'W 94.15 feet; S7-51'E 148.82
feet; S66 -39'W 386.20 feet; S62 -55'W 237.23 feet; S65 -05'W 232.38 feet;
S74 -24'W 408.97 feet; S51 -52'W 371.60 feet; S19 -42'W 231.02 feet; S62 -
26'W 198.83 feet; N85 -48'W 229.54 feet; S89 -23'W 159.01 feet; N83 -01'W
327.29 feet; S80 -02'W 437.03 feet; thence S59 -27'W 318.79 feet; thence
S3 - 28'E 199.83 feet; thence S1 -16'E 607.22 feet; thence N87 -24'E 343.43
feet; thence N82 -04'E 516.01 feet; thence N70 -45'E 540.58 feet; thence
N89 -18'E 472.15 feet; thence N0 -01'E 400.58 feet; thence S89 -59'E 446.0
feet; thence S0 -01'W 395.0 feet; thence N89 -18'E 171.06 feet; thence
N46 - 28'E 463.45 feet to the South line of Section 21; thence along said
Section line S90 -48'E 749.92 feet to the point of beginning and containing
121.14 acres more or less.
PARCEL 4A
All that tract or parcel of land situated lying and being in Section 28, Township 14 North, Range 30 East, Russell County, Alabama, and being more particularly described as follows: To find the point of beginning, commence at the northwest corner of Section 28, Township 14 North, Range 30 East, which corner is marked by a concrete monument and, from said point, thence running South 89 degrees 33 minutes 20 seconds East, along the North line of said Section 28, a distance of 1,250.03 feet to an iron pin, said iron pin being the beginning point of the property herein conveyed; and from said point of beginning running thence South 89 degrees 33 minutes 20 seconds East, along the North line of said Section 28, a distance of 400.0 feet to a point; thence running South 01 degree 02 minutes 40 seconds West a distance of 704.0 feet, more or less, to a point; thence running South 45 degrees 16 minutes 00 seconds West a distance of 560.0 feet, more or less, to an iron pin; thence running North 01 degree 02 minutes 40 seconds East a distance of 1,076.19 feet to the point of beginning. The property herein described is bounded on the West and South by property of Grantee herein, on the North and East by property of Grantor herein and said described tract contains 8.2 acres, more or less.
PARCEL 4B
Commencing at the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument and proceeding east along the north line of said Section 28, which is the north property line of Georgia Kraft Company, a distance of two hundred forth-nine and ninety-six hundredths (249.96) feet to the point of intersection with the east right-of-way line of the Central of Georgia Railroad which point is marked by an iron pin, said iron pin being the point of beginning of the property herein conveyed. From said point of beginning running thence over and along the west boundary of said tract number one,
which is the east right-of-way line of the Central of Georgia Railroad which is fifty feet from and parallel to the center line of the main line track, on a bearing of south one degree, two minutes and forty seconds west (S 1 02' 40" W) a distance of sixteen hundred forty-three and fifty-nine hundredths (1643.59) feet to a point, thence along the west boundary of the said tract number one, which is the east right-of-way line of the Central of Georgia Railroad and is fifty (50) feet from and concentric with the center line of the main line track, following a circular curve to the right, having a radius of eight hundred sixty-four and forty-nine hundredths (864.49) feet for an arc distance of three hundred seventy-two and forty-three hundredths (372.43) feet to an iron pin marking the southwest corner of said tract number one which is the point where the east right-of-way line of the Central of Georgia Railroad main line terminates on the north right-of-way line of the spur track serving the Georgia Kraft Company mill, said point being fifty (50) feet from the center line of the main line track and twenty-five (25) feet from the center line of the aforesaid spur track; thence along the south boundary of said tract number one, which is the north right-of-way line of the spur track serving the Georgia Kraft Company mill and is twenty-five (25) feet from and parallel to the center line of the aforesaid spur track, on a bearing of north fifty-one degrees, fifty-two minutes and ten seconds east (N 51 52' 10" E) for a distance of thirteen-hundred fifty-nine and ninety-three hundredths (1359.93) feet to an iron pin marking the south-east corner of said tract number one; thence along the east line of said tract number one on a bearing of north zero degrees and thirty-seven minutes west (N 0 37' W) a distance of fifty-three and fifty-six hundredths (53.56) feet to an iron pin; thence along the east boundary of said tract number one on bearing of north forty-five degrees and sixteen minutes east a distance of thirty- seven and eighty hundredths (37.80) feet to an iron pin; thence along the east boundary of said tract number one on a bearing of north one degree, two minutes and forty seconds east (N 1 02' 40" E) a distance of one thousand seventy-six and nineteen hundredths (1076.19) feet to an iron pin marking the north east corner of said tract number one and being on the north line of the aforesaid Section 28; on a bearing of north eighty-nine degrees thirty-three minutes and twenty seconds West (N 89 33' 20" W) a distance of one thousand and seven hundredths (1000.07) feet to the point of beginning. The above described boundaries of said tract number one enclose thirty-five and fifty-one hundredths (35.51) acres, more or less;
excepting from the foregoing description of Parcel 4A and Parcel 4B the following described Tracts A, B and C:
TRACT A
A 200 foot wide strip of land for a road right-of-way situated in Sections 20, 28 and 29, Township 14 North, Range 30 East, in Russell County, Alabama, and being 100 feet on either side of and contiguous with the following described centerline:
Commence at the Northeast corner of Section 20, Township 14 North, Range 30 East and run North 86 degrees 56 minutes West for a distance of 751.7 feet; thence South 33 degrees 37 minutes West for a distance of 2187.0 feet; thence South 18 degrees 31 minutes West for a distance of 856.7 feet; thence South 19 degrees 29 minutes West for a distance of 507.5 feet; thence South 89 degrees 26 minutes East for a distance of 91.80 feet; thence from the last described course turn left 151 degrees 00 minutes and run Northwesterly 138.20 feet to a point in the center of Alabama Highway No. 165 and the point of beginning for said centerline; thence turn right 180 degrees 00 minutes and run Southeasterly along said centerline 230.00 feet to the point of a curve to the right; said curve having a 17 degree 32 minutes 16 seconds degree of curvature and an included angle of 62 degrees 45 minutes; thence continue along said curve an arc distance of 359.20 feet to the point of tangent to said curve; thence continue tangent to last described curve Southerly a distance of 1719.47 feet to the point of a curve to the left; said curve having a 10 degree 00 minutes 14 seconds degree of curvature and an included angle of 27 degrees 25 minutes 40 seconds; thence continue along said curve an arc distance of 274.51 feet to the point of tangent to said curve; thence continue tangent to the last described curve Southeasterly 1097.83 feet to the point of a curve to the left; said curve having a 12 degree 30 minute degree of curvature and an included angle of 101 degrees 50 minutes 41 seconds; thence continue along said curve an arc distance of 816.38 feet to the point of tangent to said curve; thence continue tangent to last described curve Northeasterly 1351.87 feet to the point of a curve to the right; said curve having a 22 degree 31 minutes 55 seconds degree of curvature and an included angle of 37 degrees 53 minutes 10 seconds; thence continue along said curve an arc distance of 168.14 feet to the intersection of said curve and the centerline of existing railroad; said intersection being the end of said centerline of roadway description.
Said strip of land lying in Sections 20, 28 and 29, Township 14 North, Range 30 East, Russell County, Alabama and containing 27.62 acres more or less.
TRACT B
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to
be
conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
TRACT C
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 5
WASTE WOOD CONVEYOR TO SCALPER (C-28506) AREA AND
TRUCK DUMPER (C-28505) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
NO. 1 BARK TRANSFER CONVEYOR (C-28503) AREA,
NO. 2 BARK TRANSFER CONVEYOR (C-28504) AREA,
BARK HOG STRUCTURE (C-28534) AREA
AND REFUSE CONVEYOR SCALPER (C-28533) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
31 59' 52" E, 291.25' to the point of beginning; thence S 8 20' 17" W,
284.46' to the center of a rectangular area which is parallel to the last
said course 22' north to south by 15' east to west; thence S 81 39' 40" E,
843.58' to a parallel rectangular area (Bark Hog Structure) 26.00' north to
south (10.00' lying south of last said course) by 37.50'; thence continue
along last said
course 27.00'; thence N 45 07' 38" E, 350.71' to the point of ending; said land being 0.63 + acres;
NO. 2 TURBINE AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
SANITARY PACKAGE TREATMENT PLANT AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NO. 3 BARK BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
PARCEL 6
NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511), CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513), AND CHIPS SCREEN HOUSE AREA (C-28515)
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
63 51' 31" E, 790.90' to the point of beginning; thence N 90 00' W,
82.00; thence S 0' 00" W, 8.75'; thence N 90 00' W, 232.22'; thence S 15
17' 15" E, 479.72' to a point on the northmost side of a rectangular area
(Chip Screen House) which parallels last said course and is 75.0' north to
south (7.00' of which is west of last said course) by 49.0' east to west;
said rectangular area being the point of ending; said land being 0.56+
acres;
CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
All that portion of land and structures lying 14' on each side of the following described centerline:
CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
HARDWOOD STORAGE CONVEYOR AREA (C-28537)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
CHIP CONVEYOR TO DIGESTER AREA (C-28521), CHIP CONVEYOR TO SURGE BIN AREA (C-28519), AND CHIP SILO AREA (C-28520)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
NEW WASHER FACILITY AND BATCH DIGESTER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
All that portion of and, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48 46' 07" W, 591.71' to the point of beginning (N 791, 960.0 E 234,055.0); thence S 0
TURPENTINE RECOVERY FACILITY AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523), DRUM AREA (C-28525, VIBRATING CONVEYORS AREA (C-28532), CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG. AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
AREA "B" MAINTENANCE SHOP AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NEW LIME KILN/RECAUSTICIZING
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence N 70 51' 29" E, 267.79' to the point of beginning (N 793,238.0 E 233,503.0); thence N 90 00' E, 399.23'; thence S 0 00' W, 50.00'; thence N 90 00' W, 10.00'; thence S 0 00' W, 40.00'; thence N 90 00' W, 136.23'; thence N 0 00' W, 80.00'; thence N 90 00' W, 50.00'; thence S 0 00' W, 10.00'; thence N 90 00' W, 54.00'; thence S 0 00' W, 40.00'; thence N 90 00' E, 65.00'; thence S 0 00' W, 30.00'; thence N 90 00' W, 150.00'; thence N 0 00' W, 17.00'; thence N 90 00' W, 64.00'; thence N 0 00' W, 73.00' to the point of beginning; said land being 0.657, more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
NO. 2 RECOVERY BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NEW EVAPORATORS AND NEW TANKS AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19; E 233,250.02, of the West Zone of the State of Georgia Coordinate System; thence S 62 01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence N 90 00' E, 246.67'; thence along an arc South and East 53.41' having a radius of 34.00' with a central angle of 90 00'; thence S 0 00' W, 135.33'; thence along an arc South and West 53.41' having a radius of
PARCEL 7
LIME MUD WASTE DISPOSAL FACILITIES
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233, 250.02 of the West Zone of the State of Georgia Coordinate System; thence N 86 38' 59" E, 253.41' to the point of beginning (N 793,165.00 E 233,503.00); thence N 90 00' E, 64.00'; thence S 0 00' E, 17.00'; thence N 90 00' E, 150.00; thence N 0 00' E, 30.00'; thence N 90 00' W, 65.00'; thence N 0 00' E, 40.00'; thence N 90 00' E, 54.00'; thence N 0 00' E, 10.00'; thence N 90 00' E, 50.00'; thence S 0 00' E, 80.00'; thence N 90 00' E, 136.23'; thence N 0 00' E, 40.00'; thence N 90 00' E, 75.00'; thence S 0 00' E, 78.00;' thence N 90 00' W, 464.23'; thence 0 00' E, 55.00'; to the point of beginning; said land being 0.633 more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21- 3097A.
PARCEL 8A
A tract of land situated in the Northwest Quarter of the Northeast Quarter (NW 1/4 of NE 1/4) and the Southwest Quarter of the Northeast Quarter (SW 1/4 of NE 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28 Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2806.62 feet to a point; thence turn right and run due South a distance of 1210.86 feet to a point at the western end of the Bark Handling System, such point being the beginning of the tract of land herein described.
Begin at such point of beginning, turn an angle to the left and run North 45 degrees 00 minutes East a distance of 63.64 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run easterly a distance of 310.00 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run southeasterly a distance of 63.64 feet to a point; thence turn an angle to the left 45 degrees 00 minutes and run easterly a distance of 270.00 feet to a
point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 155.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 136.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 94.35 feet to a point; thence turn an angle to the right 30 degrees 00 minutes and run southwesterly a distance of 263.00 feet to a point; thence turn an angle to the left 30 degrees 00 minutes and run southerly a distance of 132.88 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 84.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 405.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 120.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 115.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 470.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 90.00 feet to the point of beginning.
PARCEL 8B
A tract of land situated in the Northeast Quarter of the Northwest Quarter (NE 1/4 of NW 1/4) and the Southeast Quarter of the Northwest Quarter (SE 1/4 of NW 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28, Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2290.86 feet to a point; thence turn right and run due South a distance of 1225.36 feet to a point at the Northeast corner of the #2 Bark Boiler Building, such point being the point of beginning of the tract of land herein described.
Being at such point of beginning, continue due South a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 67.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 15.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run northerly a distance of 40.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 34.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 40.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 18.00 feet to the point of beginning.
PARCEL 9
All that portion of land, and structures lying thereon, in Section 28, T14N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
(collectively, (Parcels 1 through 9) the "Other Leased Land")
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Other Leased Land in order to provide all necessary or convenient ingress or egress between the 1997 Leased Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the 1997 Leased Land and the Other Leased Land;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Other Leased Land necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the 1997 Leased Land to the Other Leased Land, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Other Leased Land, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the 1997 Leased Land and the Project including,
without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Other Leased Land; and
(d) An easement and right to create and maintain upon the Other Leased Land encroachments of equipment, structures or other improvements which will be included on the 1997 Leased Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Other Leased Land;
but subject to the following easements over the 1997 Leased Land in favor of the Other Leased Land:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the 1997 Leased Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Other Leased Land and between the Other Leased Land and the 1997 Leased Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Other Leased Land;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the 1997 Leased Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Other Leased Land to another or between the Other Leased Land and the 1997 Leased Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of any facilities located on the Other Leased Land;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the 1997 Leased Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications,
instrumentation and control, and other similar facilities to the Other Leased Land, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the 1997 Leased Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Other Leased Land as encroachments upon the 1997 Leased Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the 1997 Leased Land in respect of any additional improvements constructed adjacent to the 1997 Leased Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the 1997 Leased Land.
subject in all cases to the following:
(1) Lease Agreement dated as of November 1, 1983 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1983;
(2) Lease Agreement dated as of December 1, 1983 between the Board as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Georgia Kraft Project), Series 1983;
(3) Lease Agreement dated as of December 1, 1985 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Georgia Kraft Project), Series 1985;
(4) Lease Agreement dated as of July 1, 1986 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1986;
(5) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988;
(6) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, 1989A, 1989B, 1989C, 1989D, 1989E, 1900A and 1991A;
(7) Lease Agreement dated as of June 1, 1990 between the Board, as lessor, and Industrial Warehouse Services, Inc., as lessee, as amended and supplemented from time to time, relating to the Board's First Mortgage Revenue Bonds (Industrial Warehouse Services, Inc.), Series 1990;
(8) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1993A;
(9) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A and 1995A;
(10) Lease Agreement dated as of March 1, 1996 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1996;
(11) Lease Agreement dated as of September 1, 1997 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A;
(12) Lease Agreement dated as of February 1, 1998 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1998A; and
(13) Lease Agreement dated as of February 1, 1998 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1998B.
THIS SECOND AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of September 30, 1998 by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board previously issued and sold (i) $150,000,000 in aggregate principal amount of The Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A (the "Series 1997A Bonds") pursuant to a Trust Indenture dated as of September 1, 1997 (the "Original Indenture") from the Board to AmSouth Bank, formerly AmSouth Bank of Alabama, as Trustee (the "Prior Trustee").
Pursuant to the First Supplemental Indenture dated as of September 15, 1998 (the "First Supplemental Indenture") and a resolution of the Board of even date, The First National Bank of Chicago has been appointed as successor trustee under the Original Indenture (the "Trustee").
The Board has used the proceeds of the sale of the Series 1997A Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of September 1, 1997, as amended by a First Amendment to Lease Agreement dated as of August 1, 1998 (the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1997A Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in connection with the Project. In that connection, the Board is issuing $85,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1998A (the "Series 1998A Bonds"), pursuant to the Original Indenture as supplemented by a Second Supplemental Trust Indenture dated as of September 30, 1998 (the "Second Supplemental Indenture") from the Board to the Trustee. The Original Indenture as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
supplements thereto or the Agreement, shall apply with full force and effect to the Series 1998A Bonds. Without limiting the foregoing, all references in the Agreement to the "Bonds" shall be deemed to mean the Series 1997A Bonds and the Series 1998A Bonds, including without limitation the provisions of Section 5.3 of the Agreement relating to the payment of rents.
recording of this Amendment, the Second Supplemental Indenture and any
financing statements covering the security interests created hereunder and
under the Indenture. The Board has filed the notification referred to in
(i) of the preceding sentence and the Director of the Alabama Securities
Commission has issued a Certificate of Notification applicable to the
Series 1998A Bonds, which Certificate of Notification has not been revoked
or rescinded and is in full force and effect.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (iii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1998A Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
Kenneth A. Roberts
By:--------------------------------
Chairman
MEAD COATED BOARD, INC.
Timothy R. McLevish
By:-------------------------------
Treasurer
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
SYDNEY S. SMITH
NOTARY PUBLIC
ALABAMA STATE-AT-LARGE
(SEAL)
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
Phyllis M. Crabill
In and for the State of Ohio
(SEAL)
Mead Coated Board, Inc., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A of The Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Second Amendment To Lease Agreement, dated as of September 30, 1998, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of September 1, 1997 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of Bondholder to be executed in its name and behalf as of September 30, 1998.
MEAD COATED BOARD, INC.
By: /s/ Timothy R. McLevish ------------------------------- Treasurer |
THE FIRST NATIONAL BANK OF CHICAGO, as successor Trustee under the Trust Indenture dated as of September 1, 1997, as supplemented from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Second Amendment To Lease Agreement, dated as of September 30, 1998, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of September 1, 1997 between the Board and Mead Coated Board, Inc.
IN WITNESS WHEREOF, The First National Bank of Chicago has caused this Consent of Trustee to be executed in its name and behalf as of September 30, 1998.
THE FIRST NATIONAL BANK OF CHICAGO as Trustee
By: /s/ Sandra L. Caruba ------------------------------- Title: Vice President ---------------------------- |
EXHIBIT "A"
to
Second Amendment To Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of September 30, 1998
The Project Land includes the following property:
The following real estate and premises situated in the County of Russell and State of Alabama:
Eight hundred eighty four and 47/100 (884.47) acres located in Sections 32,
33, 21, 28, and 27, Township 14 North, Range 30 East, and Section 5,
Township 13 North, Range 30 East, and beginning at the Southwest corner of
Section 32, Township 14 North, Range 30 East, Russell County, Alabama, run
thence North 00 degrees 38 minutes East a distance of 354.26 feet along a
fence line to a concrete monument, thence North 37 degrees 57 minutes 25
seconds East a distance of 2086.55 feet to a point, thence North 57 degrees
13 minutes East a distance of 4397.87 feet to a point, thence North 01
degree 38 minutes East a distance of 970.55 feet to a point, thence North
37 degrees 53 minutes East a distance of 1948.85 feet to a point, thence
North 00 degrees 37 minutes West a distance of 2783.92 feet to a point,
thence North 45 degrees 16 minutes East a distance of 1570.95 feet to a
concrete monument, thence North 00 degrees 27 minutes East a distance of
621.32 feet to a concrete monument, thence South 88 degrees 26 minutes 40
seconds East a distance of 1048.15 feet to a concrete monument, thence
South 00 degrees 41 minutes 10 seconds East a distance of 601.95 feet to a
concrete monument, thence South 89 degrees 33 minutes 20 seconds East along
the north line of Section 28, Township 14 North, Range 30 East a distance
of 1915.88 feet to a concrete monument, said monument being the northeast
corner of said Section 28, which is the northwest corner of Section 27, in
Township 14 North, Range 30 East, thence South 89 degrees 33 minutes 20
seconds East along the North line of said Section 27 to the boundary line
between the State of Georgia, and the State of Alabama; thence Southerly
and Southwesterly along said line between the State of Alabama and the
State of Georgia, as the same runs, to the northerly and southerly line
along the west side of Section 5, Township 13 North, Range 30 East, run
thence North 00 degrees 28 minutes East along the West line of said Section
5, to a point marked by an iron pipe; thence North 00 degrees 28 minutes
East along the west line of said Section 5 a distance of 2825.00 feet to
the northwest corner of Section 5, and the point of beginning. (The
Portion of said line from the northerly line of a public road known as the
Ferry Road to the northwest corner of said Section 5, which is the
southwest corner of Section 32, Township 14 North, Range 30 East, being
along an old fence.)
There is hereby expressly excepted from said described lands those lands heretofore taken in fee simple by condemnation by the United States of America and subject to flowage easements taken by the United States of America by condemnation and subject to the easement rights (a) for right of way for railroad purposes and (b) for a public road over and through said described lands, such public road right of way having been conveyed by the W.C. Bradley Company, to Russell County, Alabama, by deed recorded in Deed Record 387, pages 787-788, in the office of the Judge of Probate in and for Russell County, Alabama.
Said described lands hereby conveyed contain in the aggregate according to survey made, eight hundred eighty four and 47/100ths (884.47) acres (the "1997 Leased Land");
less and except the following property:
PARCEL 1
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
PARCEL 2
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 3
At the Southwest corner of Section 22, Township 14 North, Range 30 East, Russell County, Alabama as the point of beginning, run along the South line of Section 22 N89 -50'E 976.85 feet to the property line of the United States Government; thence along said property line N2 -50'W 1296.69 feet to a branch which runs into Bluff Creek; thence along said branch the following courses; N41 -41'W 340.67 feet; S85 -42'W 324.22 feet; S81 -08'W 330.0 feet; N25 -48'W 145.58 feet; S76 -52'W 198.66 feet; N44 -03'W 152.62 feet; S46 -35'Q 84.21 feet; S21 -00'E 83.39 feet; N82 -27'W 94.15 feet; S7 -51'E 148.82 feet; S66 -39'W 386.20 feet; S62 -55'W 237.23 feet; S65 -05'W 232.38 feet; S74 -24'W 408.97 feet; S51 -52'W 371.60 feet; S19 -42'W 231.02 feet; S62 -26'W 198.83 feet; N85 -48'W 229.54 feet; S89 -23'W 159.01 feet; N83 -01'W 327.29 feet; S80 -02'W 437.03 feet; thence S59 -27'W 318.79 feet; thence S3 -28'E 199.83 feet; thence S1 -16'E 607.22 feet; thence N87 -24'E 343.43 feet; thence N82 -04'E 516.01 feet; thence N70 -45'E 540.58 feet; thence N89 -18'E 472.15 feet; thence N0 -01'E 400.58 feet; thence S89 -59'E 446.0 feet; thence S0 -01'W 395.0 feet; thence N89 -18'E 171.06 feet; thence N46 -28'E 463.45 feet to the South line of Section 21; thence along said Section line S90 -48'E 749.92 feet to the point of beginning and containing 121.14 acres more or less.
PARCEL 4A
All that tract or parcel of land situated lying and being in Section 28, Township 14 North, Range 30 East, Russell County, Alabama, and being more particularly described as follows: To find the point of beginning, commence at the northwest corner of Section 28, Township 14 North, Range 30 East, which corner is marked by a concrete monument and, from said point, thence running South 89 degrees 33 minutes 20 seconds East, along the North line of said Section 28, a distance of 1,250.03 feet to an iron pin, said iron pin being the beginning point of the property herein conveyed; and from said point of beginning running thence South 89 degrees 33 minutes 20 seconds East, along the North line of said Section 28, a distance of 400.0 feet to a point; thence running South 01 degree 02 minutes 40 seconds West a distance of 704.0 feet, more or less, to a point; thence running South 45 degrees 16 minutes 00 seconds West a distance of 560.0 feet, more or less, to an iron pin; thence running North 01 degree 02 minutes 40 seconds East a distance of 1,076.19 feet to the point of beginning. The property herein described is bounded on the West and South by property of Grantee herein, on the North and East by property of Grantor herein and said described tract contains 8.2 acres, more or less.
PARCEL 4B
Commencing at the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument and proceeding east along the north line of said Section 28, which is the north property line of Georgia Kraft Company, a distance of two hundred forth-nine and ninety-six hundredths (249.96) feet to the point of intersection with the east right-of-way line of the Central of Georgia Railroad which point is marked by an iron pin, said iron pin being the point of beginning of the property herein conveyed. From said point of beginning running thence over and along the west
boundary of said tract number one, which is the east right-of-way line of
the Central of Georgia Railroad which is fifty feet from and parallel to
the center line of the main line track, on a bearing of south one degree,
two minutes and forty seconds west (S 1 02' 40" W) a distance of sixteen
hundred forty-three and fifty-nine hundredths (1643.59) feet to a point,
thence along the west boundary of the said tract number one, which is the
east right-of-way line of the Central of Georgia Railroad and is fifty (50)
feet from and concentric with the center line of the main line track,
following a circular curve to the right, having a radius of eight hundred
sixty-four and forty-nine hundredths (864.49) feet for an arc distance of
three hundred seventy-two and forty-three hundredths (372.43) feet to an
iron pin marking the southwest corner of said tract number one which is the
point where the east right-of-way line of the Central of Georgia Railroad
main line terminates on the north right-of-way line of the spur track
serving the Georgia Kraft Company mill, said point being fifty (50) feet
from the center line of the main line track and twenty-five (25) feet from
the center line of the aforesaid spur track; thence along the south
boundary of said tract number one, which is the north right-of-way line of
the spur track serving the Georgia Kraft Company mill and is twenty-five
(25) feet from and parallel to the center line of the aforesaid spur track,
on a bearing of north fifty-one degrees, fifty-two minutes and ten seconds
east (N 51 52' 10" E) for a distance of thirteen-hundred fifty-nine and
ninety-three hundredths (1359.93) feet to an iron pin marking the south-
east corner of said tract number one; thence along the east line of said
tract number one on a bearing of north zero degrees and thirty-seven
minutes west (N 0 37' W) a distance of fifty-three and fifty-six hundredths
(53.56) feet to an iron pin; thence along the east boundary of said tract
number one on bearing of north forty-five degrees and sixteen minutes east
a distance of thirty-seven and eighty hundredths (37.80) feet to an iron
pin; thence along the east boundary of said tract number one on a bearing
of north one degree, two minutes and forty seconds east (N 1 02' 40" E) a
distance of one thousand seventy-six and nineteen hundredths (1076.19) feet
to an iron pin marking the north east corner of said tract number one and
being on the north line of the aforesaid Section 28; on a bearing of north
eighty-nine degrees thirty-three minutes and twenty seconds West (N 89 33'
20" W) a distance of one thousand and seven hundredths (1000.07) feet to
the point of beginning. The above described boundaries of said tract number
one enclose thirty-five and fifty-one hundredths (35.51) acres, more or
less;
excepting from the foregoing description of Parcel 4A and Parcel 4B the following described Tracts A, B and C:
TRACT A
A 200 foot wide strip of land for a road right-of-way situated in Sections 20, 28 and 29, Township 14 North, Range 30 East, in Russell County, Alabama, and being 100 feet on either side of and contiguous with the following described centerline:
Commence at the Northeast corner of Section 20, Township 14 North, Range 30 East and run North 86 degrees 56 minutes West for a distance of 751.7 feet; thence South 33 degrees 37 minutes West for a distance of 2187.0 feet; thence South 18 degrees 31 minutes West for a distance of 856.7 feet; thence South 19 degrees 29 minutes West for a distance of 507.5 feet; thence South 89 degrees 26 minutes East for a distance of 91.80 feet; thence from the last described course turn left 151 degrees 00 minutes and run Northwesterly 138.20 feet to a point in the center of Alabama Highway No. 165 and the point of beginning for said centerline; thence turn right 180 degrees 00 minutes and run Southeasterly along said centerline 230.00 feet to the point of a curve to the right; said curve having a 17 degree 32 minutes 16 seconds degree of curvature and an included angle of 62 degrees 45 minutes; thence continue along said curve an arc distance of 359.20 feet to the point of tangent to said curve; thence continue tangent to last described curve Southerly a distance of 1719.47 feet to the point of a curve to the left; said curve having a 10 degree 00 minutes 14 seconds degree of curvature and an included angle of 27 degrees 25 minutes 40 seconds; thence continue along said curve an arc distance of 274.51 feet to the point of tangent to said curve; thence continue tangent to the last described curve Southeasterly 1097.83 feet
to the point of a curve to the left; said curve having a 12 degree 30 minute degree of curvature and an included angle of 101 degrees 50 minutes 41 seconds; thence continue along said curve an arc distance of 816.38 feet to the point of tangent to said curve; thence continue tangent to last described curve Northeasterly 1351.87 feet to the point of a curve to the right; said curve having a 22 degree 31 minutes 55 seconds degree of curvature and an included angle of 37 degrees 53 minutes 10 seconds; thence continue along said curve an arc distance of 168.14 feet to the intersection of said curve and the centerline of existing railroad; said intersection being the end of said centerline of roadway description.
Said strip of land lying in Sections 20, 28 and 29, Township 14 North, Range 30 East, Russell County, Alabama and containing 27.62 acres more or less.
TRACT B
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
TRACT C
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 5
WASTE WOOD CONVEYOR TO SCALPER (C-28506) AREA AND
TRUCK DUMPER (C-28505) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
NO. 1 BARK TRANSFER CONVEYOR (C-28503) AREA,
NO. 2 BARK TRANSFER CONVEYOR (C-28504) AREA,
BARK HOG STRUCTURE (C-28534) AREA
AND REFUSE CONVEYOR SCALPER (C-28533) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
31 59' 52" E, 291.25' to the point of beginning; thence S 8 20' 17" W,
284.46' to the center of a rectangular area which is parallel to the last
said course 22' north to south by 15' east to west; thence S 81 39' 40" E,
843.58' to a parallel rectangular area (Bark Hog Structure) 26.00' north to
south (10.00' lying south of last said course) by 37.50'; thence continue
along last said course 27.00';
thence N 45 07' 38" E, 350.71' to the point of ending; said land being 0.63
+ acres;
NO. 2 TURBINE AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
SANITARY PACKAGE TREATMENT PLANT AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NO. 3 BARK BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
PARCEL 6
NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511), CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513), AND CHIPS SCREEN HOUSE AREA (C-28515)
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State Georgia Coordinate System; and lying in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N
63 51' 31" E, 790.90' to the point of beginning; thence N 90 00' W,
82.00; thence S 0' 00" W, 8.75'; thence N 90 00' W, 232.22'; thence S 15
17' 15" E, 479.72' to a point on the northmost side of a rectangular area
(Chip Screen House) which parallels last said course and is 75.0' north to
south (7.00' of which is west of last said course) by 49.0' east to west;
said rectangular area being the point of ending; said land being 0.56+
acres;
CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
All that portion of land and structures lying 14' on each side of the following described centerline:
CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
HARDWOOD STORAGE CONVEYOR AREA (C-28537)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
CHIP CONVEYOR TO DIGESTER AREA (C-28521), CHIP CONVEYOR TO SURGE BIN AREA (C-28519), AND CHIP SILO AREA (C-28520)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
NEW WASHER FACILITY AND BATCH DIGESTER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
All that portion of and, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; thence S 48 46' 07" W,
TURPENTINE RECOVERY FACILITY AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523), DRUM AREA (C-28525, VIBRATING CONVEYORS AREA (C-28532), CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG. AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
AREA "B" MAINTENANCE SHOP AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NEW LIME KILN/RECAUSTICIZING
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence N 70 51' 29" E, 267.79' to the point of beginning (N 793,238.0 E 233,503.0); thence N 90 00' E, 399.23'; thence S 0 00' W, 50.00'; thence N 90 00' W, 10.00'; thence S 0 00' W, 40.00'; thence N 90 00' W, 136.23'; thence N 0 00' W, 80.00'; thence N 90 00' W, 50.00'; thence S 0 00' W, 10.00'; thence N 90 00' W, 54.00'; thence S 0 00' W, 40.00'; thence N 90 00' E, 65.00'; thence S 0 00' W, 30.00'; thence N 90 00' W, 150.00'; thence N 0 00' W, 17.00'; thence N 90 00' W, 64.00'; thence N 0 00' W, 73.00' to the point of beginning; said land being 0.657, more
or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
NO. 2 RECOVERY BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NEW EVAPORATORS AND NEW TANKS AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
PARCEL 7
LIME MUD WASTE DISPOSAL FACILITIES
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233, 250.02 of the West Zone of the State of Georgia Coordinate System; thence N 86 38' 59" E, 253.41' to the point of beginning (N 793,165.00 E 233,503.00); thence N 90 00' E, 64.00'; thence S 0 00' E, 17.00'; thence N 90 00' E, 150.00; thence N 0 00' E, 30.00'; thence N 90 00' W, 65.00'; thence N 0 00' E, 40.00'; thence N 90 00' E, 54.00'; thence N 0 00' E, 10.00'; thence N 90 00' E, 50.00'; thence S 0 00' E, 80.00'; thence N 90 00' E, 136.23'; thence N 0 00' E, 40.00'; thence N 90 00' E, 75.00'; thence S 0 00' E, 78.00;' thence N 90 00' W, 464.23'; thence 0 00' E, 55.00'; to the point of beginning; said land being 0.633 more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21- 3097A.
PARCEL 8A
A tract of land situated in the Northwest Quarter of the Northeast Quarter (NW 1/4 of NE 1/4) and the Southwest Quarter of the Northeast Quarter (SW 1/4 of NE 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28 Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2806.62 feet to a point; thence turn right and run due South a distance of 1210.86 feet to a point at the western end of the Bark Handling System, such point being the beginning of the tract of land herein described.
Begin at such point of beginning, turn an angle to the left and run North 45 degrees 00 minutes East a distance of 63.64 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run easterly a distance of 310.00 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run southeasterly a distance of 63.64 feet to a point; thence turn an angle to the left 45 degrees 00 minutes and run easterly a distance of 270.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 155.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 136.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 94.35 feet to a point; thence turn an angle to the right 30 degrees 00 minutes and run southwesterly a distance of 263.00 feet to a point; thence turn an angle to the left 30 degrees 00 minutes and run southerly a distance of 132.88 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 84.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 405.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 120.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 115.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 470.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 90.00 feet to the point of beginning.
PARCEL 8B
A tract of land situated in the Northeast Quarter of the Northwest Quarter (NE 1/4 of NW 1/4) and the Southeast Quarter of the Northwest Quarter (SE 1/4 of NW 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28, Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2290.86 feet to a point; thence turn right and run due South a distance of 1225.36 feet to a point at the Northeast corner of the #2 Bark Boiler Building, such point being the point of beginning of the tract of land herein described.
Being at such point of beginning, continue due South a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 67.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 15.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run northerly a distance of 40.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 34.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 40.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 18.00 feet to the point of beginning.
PARCEL 9
All that portion of land, and structures lying thereon, in Section 28, T14N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
(collectively, (Parcels 1 through 9) the "Other Leased Land")
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Other Leased Land in order to provide all necessary or convenient ingress or egress between the 1997 Leased Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the 1997 Leased Land and the Other Leased Land;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Other Leased Land necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the 1997 Leased Land to the Other Leased Land, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Other Leased Land, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the 1997 Leased Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Other Leased Land; and
(d) An easement and right to create and maintain upon the Other Leased Land encroachments of equipment, structures or other improvements which will be included on the 1997 Leased Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Other Leased Land;
but subject to the following easements over the 1997 Leased Land in favor of the Other Leased Land:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the 1997 Leased Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Other Leased Land and between the Other Leased Land and the 1997 Leased Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Other Leased Land;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement and use of material conveyance systems, including without limitation, pipelines, through any part of the 1997 Leased Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Other Leased Land to another or between the Other Leased Land and the 1997 Leased Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of any facilities located on the Other Leased Land;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the 1997 Leased Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Other Leased Land, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the 1997 Leased Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Other Leased Land as encroachments upon the 1997 Leased Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the 1997 Leased Land in respect of any additional improvements constructed adjacent to the 1997 Leased Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the 1997 Leased Land.
subject in all cases to the following:
(1) Lease Agreement dated as of November 1, 1983 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1983;
(2) Lease Agreement dated as of December 1, 1983 between the Board as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Georgia Kraft Project), Series 1983;
(3) Lease Agreement dated as of December 1, 1985 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Georgia Kraft Project), Series 1985;
(4) Lease Agreement dated as of July 1, 1986 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1986;
(5) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988;
(6) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, 1989A, 1989B, 1989C, 1989D, 1989E, 1900A and 1991A;
(7) Lease Agreement dated as of June 1, 1990 between the Board, as lessor, and Industrial Warehouse Services, Inc., as lessee, as amended and supplemented from time to time, relating to the Board's First Mortgage Revenue Bonds (Industrial Warehouse Services, Inc.), Series 1990;
(8) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1993A;
(9) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A and 1995A;
(10) Lease Agreement dated as of March 1, 1996 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1996;
(11) Lease Agreement dated as of September 1, 1997 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A and 1998A;
(12) Lease Agreement dated as of February 1, 1998 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1998A; and
(13) Lease Agreement dated as of February 1, 1998 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1998B.
THIS THIRD AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and entered into as of August 1, 1999 by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and politic duly organized and existing under the Constitution and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").
The Board previously issued and sold (i) $150,000,000 in aggregate principal amount of the Industrial Development Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A (the "Series 1997A Bonds"), and (ii) $85,000,000 in aggregate principal amount of the Industrial Development Board of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1998A (the "Series 1998A Bonds") pursuant to a Trust Indenture dated as of September 1, 1997 (the "Original Indenture" as amended and supplemented to date, the "Indenture") from the Board to The First National Bank of Chicago, as successor Trustee (the "Trustee").
The Board has used the proceeds of the sale of the Series 1997A Bonds for the payment of outstanding industrial development temporary borrowing notes (the "Notes") issued by the Board for the purpose of funding the acquisition, construction and installation of a coated natural kraft mill and related facilities (the "Project") in connection with certain industrial facilities located near Phenix City, Alabama. The Project is owned by the Board and leased to the Company pursuant to a Lease Agreement dated as of September 1, 1997, as amended by a First Amendment to Lease Agreement dated as of August 1, 1998 and a Second Amendment to Lease Agreement dated as of September 30, 1998 (the "Agreement"). The Agreement obligates the Company to make rental payments in such amounts and at such times as will provide for the payment of the principal and interest on the Series 1997A Bonds and the Series 1998A Bonds as the same becomes due and payable.
Under Article IV of the Original Indenture, the Board is permitted to issue Additional Bonds (as defined in the Original Indenture) in order to pay additional Notes issued by the Board in furtherance of the Project. In that connection, the Board is issuing $30,000,000 in aggregate principal amount of Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1999A (the "Series 1999A Bonds"), pursuant to the Original Indenture as supplemented by a Third Supplemental Trust Indenture dated as of August 1, 1999 (the "Third Supplemental Indenture") from the Board to the Trustee. The Original Indenture as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture is hereinafter referred to as the "Indenture".
NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in accordance with Section 1501 of the Original Indenture, the parties hereto desire to amend the Agreement as follows:
ARTICLE I
Series 1997A Bonds and the Series 1998A Bonds and not specifically otherwise provided for in the Indenture, any supplements thereto or the Agreement, shall apply with full force and effect to the Series 1999A Bonds. Without limiting the foregoing, all references in the Agreement to the "Bonds" shall be deemed to mean the Series 1997A Bonds, the Series 1998A Bonds and the Series 1999A Bonds including without limitation the provisions of Section 5.3 of the Agreement relating to the payment of rents.
enacted at the 1978 Regular Session of the Legislature of the State and the issuance by the Director of the Alabama Securities Commission of such Certificate of Notification as may be required by said Act, and (ii) the due filing and recording of Third Supplemental Indenture and any financing statements covering the security interests created hereunder and under the Indenture. The Board has filed the notification referred to in (i) of the preceding sentence and the Director of the Alabama Securities Commission has issued a Certificate of Notification applicable to the Series 1999A Bonds, which Certificate of Notification has not been revoked or rescinded and is in full force and effect.
(a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite corporate power and authority to carry on its business as now being conducted and as presently proposed to be conducted, and (iii) has duly qualified and is authorized to do business and is in good standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been duly authorized to enter into this Amendment and to perform all of its obligations hereunder.
(c) The willingness of the Board to issue the Series 1999A Bonds for purposes of financing costs of acquiring, constructing, and installing the Project, and to lease the Project to the Company, has induced the Company to locate the Project within the State of Alabama and, more particularly, within 25 miles of the City.
(d) The Company is not subject to any contractual or other limitation or provision of any nature whatsoever which in any material way limits, restricts or prevents the Company from entering into this Amendment, or performing any of its obligations hereunder; and the execution and delivery of consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Amendment will not conflict with or result in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the Company is a party or by which it is bound, or constitute a default under any of the foregoing.
(e) No event has occurred and no condition exists that would constitute an "Event of Default" under the Agreement or this Amendment which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Agreement or this Amendment.
(f) To the best of its knowledge and belief, the Company is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject and has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain would reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Amendment.
ARTICLE II
IN WITNESS WHEREOF, the Board and the Company have caused this Amendment to be executed in their respective corporate names as of the date first written above.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
By: /s/ Kenneth A. Roberts -------------------------------- Chairman |
MEAD COATED BOARD, INC.
By: /s/ Timothy R. McLevish -------------------------------- Treasurer |
ACKNOWLEDGMENT OF BOARD
STATE OF ALABAMA
COUNTY OF RUSSELL
SYDNEY S. SMITH
NOTARY PUBLIC
ALABAMA STATE-AT-LARGE
(SEAL)
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO
COUNTY OF MONTGOMERY
DENISE L. WILLIAMS, Notary Public
In and for the State of Ohio
My Commission Expires May 1, 2002
(SEAL)
Mead Coated Board, Inc., as holder of all of the outstanding Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A and Series 1998A of The Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Third Amendment To Lease Agreement, dated as of August 1, 1999, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of September 1, 1997 between the Board and Mead Coated Board, Inc.
MEAD COATED BOARD, INC.
Timothy R. McLevish
By:-------------------------------
Treasurer
THE FIRST NATIONAL BANK OF CHICAGO, as successor Trustee under the Trust Indenture dated as of September 1, 1997, as supplemented from the Industrial Development Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the execution and delivery of the foregoing Third Amendment To Lease Agreement, dated as of August 1, 1999, between the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of September 1, 1997 between the Board and Mead Coated Board, Inc.
THE FIRST NATIONAL BANK OF CHICAGO as Trustee
Amy Movitz
By: -------------------------------
Assistant Vice President
Title: -----------------------------
EXHIBIT "A"
to
The Project Land includes the following property:
The following real estate and premises situated in the County of Russell and State of Alabama:
Eight hundred eighty four and 47/100 (884.47) acres located in Sections 32,
33, 21, 28, and 27, Township 14 North, Range 30 East, and Section 5,
Township 13 North, Range 30 East, and beginning at the Southwest corner of
Section 32, Township 14 North, Range 30 East, Russell County, Alabama, run
thence North 00 degrees 38 minutes East a distance of 354.26 feet along a
fence line to a concrete monument, thence North 37 degrees 57 minutes 25
seconds East a distance of 2086.55 feet to a point, thence North 57 degrees
13 minutes East a distance of 4397.87 feet to a point, thence North 01
degree 38 minutes East a distance of 970.55 feet to a point, thence North
37 degrees 53 minutes East a distance of 1948.85 feet to a point, thence
North 00 degrees 37 minutes West a distance of 2783.92 feet to a point,
thence North 45 degrees 16 minutes East a distance of 1570.95 feet to a
concrete monument, thence North 00 degrees 27 minutes East a distance of
621.32 feet to a concrete monument, thence South 88 degrees 26 minutes 40
seconds East a distance of 1048.15 feet to a concrete monument, thence
South 00 degrees 41 minutes 10 seconds East a distance of 601.95 feet to a
concrete monument, thence South 89 degrees 33 minutes 20 seconds East along
the north line of Section 28, Township 14 North, Range 30 East a distance
of 1915.88 feet to a concrete monument, said monument being the northeast
corner of said Section 28, which is the northwest corner of Section 27, in
Township 14 North, Range 30 East, thence South 89 degrees 33 minutes 20
seconds East along the North line of said Section 27 to the boundary line
between the State of Georgia, and the State of Alabama; thence Southerly
and Southwesterly along said line between the State of Alabama and the
State of Georgia, as the same runs, to the northerly and southerly line
along the west side of Section 5, Township 13 North, Range 30 East, run
thence North 00 degrees 28 minutes East along the West line of said Section
5, to a point marked by an iron pipe; thence North 00 degrees 28 minutes
East along the west line of said Section 5 a distance of 2825.00 feet to
the northwest corner of Section 5, and the point of beginning. (The
Portion of said line from the northerly line of a public road known as the
Ferry Road to the northwest corner of said Section 5, which is the
southwest corner of Section 32, Township 14 North, Range 30 East, being
along an old fence.)
There is hereby expressly excepted from said described lands those
lands heretofore taken in fee simple by condemnation by the United States
of America and subject to flowage easements taken by the United States of
America by condemnation and subject to the easement rights (a) for right of
way for railroad purposes and (b) for a public road over and through said
described lands, such public road right of way having been conveyed by the
W.C. Bradley Company, to Russell County, Alabama, by deed recorded in Deed
Record 387, pages 787-788, in the office of the Judge of Probate in and for
Russell County, Alabama.
Said described lands hereby conveyed contain in the aggregate
according to survey made, eight hundred eighty four and 47/100ths (884.47)
acres (the "1997 Leased Land");
less and except the following property:
PARCEL 1
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
PARCEL 2
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 3
At the Southwest corner of Section 22, Township 14 North, Range 30 East, Russell County, Alabama as the point of beginning, run along the South line of Section 22 N89 -50'E 976.85 feet to the property line of the United States Government; thence along said property line N2 -50'W 1296.69 feet to a branch which runs into Bluff Creek; thence along said branch the following courses; N41 -41'W 340.67 feet; S85 -42'W 324.22 feet; S81 -08'W 330.0 feet; N25 -48'W 145.58 feet; S76 -52'W 198.66 feet; N44 -03'W 152.62 feet; S46 -35'Q 84.21 feet; S21 -00'E 83.39 feet; N82 -27'W 94.15 feet; S7-51'E 148.82 feet; S66 -39'W 386.20 feet; S62 -55'W 237.23 feet; S65 -05'W 232.38 feet; S74 -24'W 408.97 feet; S51 -52'W 371.60 feet; S19 -42'W 231.02 feet; S62 -26'W 198.83 feet; N85 -48'W 229.54 feet; S89 -23'W 159.01 feet; N83 -01'W 327.29 feet; S80 -02'W 437.03 feet; thence S59 -27'W 318.79 feet; thence S3 -28'E 199.83 feet; thence S1 -16'E 607.22 feet; thence N87 - 24'E 343.43 feet; thence N82 -04'E 516.01 feet; thence N70 -45'E 540.58 feet; thence N89 -18'E 472.15 feet; thence N0 -01'E 400.58 feet; thence S89 -59'E 446.0 feet; thence S0 -01'W 395.0 feet; thence N89 -18'E 171.06 feet; thence N46 -28'E 463.45 feet to the South line of Section 21; thence along said Section line S90 -48'E 749.92 feet to the point of beginning and containing 121.14 acres more or less.
PARCEL 4A
All that tract or parcel of land situated lying and being in Section 28, Township 14 North, Range 30 East, Russell County, Alabama, and being more particularly described as follows: To find the point of beginning, commence at the northwest corner of Section 28, Township 14 North, Range 30 East, which corner is marked by a concrete monument and, from said point, thence running South 89 degrees 33 minutes 20 seconds East, along the North line of said Section 28, a distance of 1,250.03 feet to an iron pin, said iron pin being the beginning point of the property herein conveyed; and from said point of beginning running thence South 89 degrees 33 minutes 20 seconds East, along the North line of said Section 28, a distance of 400.0 feet to a point; thence running South 01 degree 02 minutes 40 seconds West a distance of 704.0 feet, more or less, to a point; thence running South 45 degrees 16 minutes 00 seconds West a distance of 560.0 feet, more or less, to an iron pin; thence running North 01 degree 02 minutes 40 seconds East a distance of 1,076.19 feet to the point of beginning. The property herein described is bounded on the West and South by property of Grantee herein, on the North and East by property of Grantor herein and said described tract contains 8.2 acres, more or less.
PARCEL 4B
Commencing at the Northwest corner of Section 28 in Township 14 North,
Range 30 East, Russell County, Alabama, which corner is marked by a
concrete monument and proceeding east along the north line of said
Section 28, which is the north property line of Georgia Kraft Company,
a distance of two hundred forth-nine and
ninety-six hundredths (249.96) feet to the point of intersection with
the east right-of-way line of the Central of Georgia Railroad which
point is marked by an iron pin, said iron pin being the point of
beginning of the property herein conveyed. From said point of
beginning running thence over and along the west boundary of said
tract number one, which is the east right-of-way line of the Central
of Georgia Railroad which is fifty feet from and parallel to the
center line of the main line track, on a bearing of south one degree,
two minutes and forty seconds west (S 1 02' 40" W) a distance of
sixteen hundred forty-three and fifty-nine hundredths (1643.59) feet
to a point, thence along the west boundary of the said tract number
one, which is the east right-of-way line of the Central of Georgia
Railroad and is fifty (50) feet from and concentric with the center
line of the main line track, following a circular curve to the right,
having a radius of eight hundred sixty-four and forty-nine hundredths
(864.49) feet for an arc distance of three hundred seventy-two and
forty-three hundredths (372.43) feet to an iron pin marking the
southwest corner of said tract number one which is the point where the
east right-of-way line of the Central of Georgia Railroad main line
terminates on the north right-of-way line of the spur track serving
the Georgia Kraft Company mill, said point being fifty (50) feet from
the center line of the main line track and twenty-five (25) feet from
the center line of the aforesaid spur track; thence along the south
boundary of said tract number one, which is the north right-of-way
line of the spur track serving the Georgia Kraft Company mill and is
twenty-five (25) feet from and parallel to the center line of the
aforesaid spur track, on a bearing of north fifty-one degrees, fifty-
two minutes and ten seconds east (N 51 52' 10" E) for a distance of
thirteen-hundred fifty-nine and ninety-three hundredths (1359.93) feet
to an iron pin marking the south-east corner of said tract number one;
thence along the east line of said tract number one on a bearing of
north zero degrees and thirty-seven minutes west (N 0 37' W) a
distance of fifty-three and fifty-six hundredths (53.56) feet to an
iron pin; thence along the east boundary of said tract number one on
bearing of north forty-five degrees and sixteen minutes east a
distance of thirty-seven and eighty hundredths (37.80) feet to an iron
pin; thence along the east boundary of said tract number one on a
bearing of north one degree, two minutes and forty seconds east (N 1
02' 40" E) a distance of one thousand seventy-six and nineteen
hundredths (1076.19) feet to an iron pin marking the north east corner
of said tract number one and being on the north line of the aforesaid
Section 28; on a bearing of north eighty-nine degrees thirty-three
minutes and twenty seconds West (N 89 33' 20" W) a distance of one
thousand and seven hundredths (1000.07) feet to the point of
beginning. The above described boundaries of said tract number one
enclose thirty-five and fifty-one hundredths (35.51) acres, more or
less;
excepting from the foregoing description of Parcel 4A and Parcel 4B the following described Tracts A, B and C:
TRACT A
A 200 foot wide strip of land for a road right-of-way situated in Sections 20, 28 and 29, Township 14 North, Range 30 East, in Russell County, Alabama, and being 100 feet on either side of and contiguous with the following described centerline:
Commence at the Northeast corner of Section 20, Township 14 North, Range 30 East and run North 86 degrees 56 minutes West for a distance of 751.7 feet; thence South 33 degrees 37 minutes West for a distance of 2187.0 feet; thence South 18 degrees 31 minutes West for a distance of 856.7 feet; thence South 19 degrees 29 minutes West for a distance of 507.5 feet; thence South 89 degrees 26 minutes East for a distance of 91.80 feet; thence from the last described course turn left 151 degrees 00 minutes and run Northwesterly 138.20 feet to a point in the center of Alabama Highway No. 165 and the point of beginning for said centerline; thence turn right 180 degrees 00 minutes and run Southeasterly along said centerline 230.00 feet to the point of a curve to the right; said curve having a 17 degree 32 minutes 16 seconds degree of curvature and an included angle of 62 degrees 45 minutes; thence continue along said curve an arc distance of 359.20 feet to the point of tangent to said curve; thence continue tangent to last described curve Southerly a distance of 1719.47 feet to the point of a curve to
the left; said curve having a 10 degree 00 minutes 14 seconds degree of curvature and an included angle of 27 degrees 25 minutes 40 seconds; thence continue along said curve an arc distance of 274.51 feet to the point of tangent to said curve; thence continue tangent to the last described curve Southeasterly 1097.83 feet to the point of a curve to the left; said curve having a 12 degree 30 minute degree of curvature and an included angle of 101 degrees 50 minutes 41 seconds; thence continue along said curve an arc distance of 816.38 feet to the point of tangent to said curve; thence continue tangent to last described curve Northeasterly 1351.87 feet to the point of a curve to the right; said curve having a 22 degree 31 minutes 55 seconds degree of curvature and an included angle of 37 degrees 53 minutes 10 seconds; thence continue along said curve an arc distance of 168.14 feet to the intersection of said curve and the centerline of existing railroad; said intersection being the end of said centerline of roadway description.
Said strip of land lying in Sections 20, 28 and 29, Township 14 North, Range 30 East, Russell County, Alabama and containing 27.62 acres more or less.
TRACT B
Beginning at a point which is 743.81 feet east and 477.58 feet south of the northwest corner of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, which section corner is marked by a concrete monument, this point thus determined, being the northwest corner of the property to be conveyed, then proceeding south 128.84 feet, then east 85.0 feet, then north 128.84 feet, then west 85.0 feet to the point of beginning.
TRACT C
Beginning at a point which is 928.0 feet South and 1479.0 feet East of the Northwest corner of Section 28 in Township 14 North, Range 30 East, Russell County, Alabama, which corner is marked by a concrete monument, then proceeding North a distance of 120.0 feet, then West 100.0 feet, then South 120.0 feet, then East 100.0 feet to the point of beginning.
PARCEL 5
WASTE WOOD CONVEYOR TO SCALPER (C-28506) AREA AND
TRUCK DUMPER (C-28505) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
NO. 1 BARK TRANSFER CONVEYOR (C-28503) AREA, NO. 2 BARK TRANSFER CONVEYOR (C-28504) AREA, BARK HOG STRUCTURE (C-28534) AREA AND REFUSE CONVEYOR SCALPER (C-28533) AREA
All that portion of land and structures lying 9' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State of Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 31 59' 52" E, 291.25' to the point of beginning; thence S 8 20' 17" W, 284.46' to the center of a rectangular area which is parallel to the last said course 22' north
to
south by 15' east to west; thence S 81 39' 40" E, 843.58' to a parallel rectangular area (Bark Hog Structure) 26.00' north to south (10.00' lying south of last said course) by 37.50'; thence continue along last said course 27.00'; thence N 45 07' 38" E, 350.71' to the point of ending; said land being 0.63 + acres;
NO. 2 TURBINE AREA
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
SANITARY PACKAGE TREATMENT PLANT AREA
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
NO. 3 BARK BOILER AREA
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
PARCEL 6
NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511), CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513), AND CHIPS SCREEN HOUSE AREA (C-28515)
All that portion of land and structures lying 13' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00, E 234,500.00, of the West Zone of the State Georgia Coordinate System; and lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63 51' 31" E, 790.90' to the point of beginning; thence N 90 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90 00' W, 232.22'; thence S 15 17' 15" E, 479.72' to a point on the northmost side of a rectangular area (Chip Screen House) which parallels last said course and is 75.0' north to south (7.00' of which is west of last said course) by 49.0' east to west; said rectangular area being the point of ending; said land being 0.56+ acres;
CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
All that portion of land and structures lying 14' on each side of the following described centerline:
CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
HARDWOOD STORAGE CONVEYOR AREA (C-28537)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
CHIP CONVEYOR TO DIGESTER AREA (C-28521), CHIP CONVEYOR TO SURGE BIN AREA (C-28519), AND CHIP SILO AREA (C-28520)
All that portion of land and structures lying 14' on each side of the following described centerline and also including any specifically noted areas which extend beyond said centerline strip:
NEW WASHER FACILITY AND BATCH DIGESTER AREA
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
All that portion of and, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
TURPENTINE RECOVERY FACILITY AREA
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523), DRUM AREA (C-28525, VIBRATING CONVEYORS AREA (C-28532), CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG. AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
AREA "B" MAINTENANCE SHOP AREA
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
NEW LIME KILN/RECAUSTICIZING
All that portion of land, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233,250.02 of the West Zone of the State of Georgia Coordinate System; thence N 70 51' 29" E, 267.79' to the point of beginning (N 793,238.0 E 233,503.0); thence N 90 00' E, 399.23'; thence S 0 00' W, 50.00'; thence N 90 00' W, 10.00'; thence S 0 00' W, 40.00'; thence N 90 00' W, 136.23'; thence N 0 00' W, 80.00'; thence N 90 00' W, 50.00'; thence S 0 00' W, 10.00'; thence N 90 00' W, 54.00'; thence S 0 00' W, 40.00'; thence N 90 00' E, 65.00'; thence S 0 00' W, 30.00'; thence N 90 00' W, 150.00'; thence N 0 00' W, 17.00'; thence N 90 00' W, 64.00';
thence N 0 00' W, 73.00' to the point of beginning; said land being 0.657, more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21-3097A.
NO. 2 RECOVERY BOILER AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
NEW EVAPORATORS AND NEW TANKS AREA
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
PARCEL 7
LIME MUD WASTE DISPOSAL FACILITIES
All that portion of land, and structures lying thereon, in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19, E 233, 250.02 of the West Zone of the State of Georgia Coordinate System; thence N 86 38' 59" E, 253.41' to the point of beginning (N 793,165.00 E 233,503.00); thence N 90 00' E, 64.00'; thence S 0 00' E, 17.00'; thence N 90 00' E, 150.00; thence N 0 00' E, 30.00'; thence N 90 00' W, 65.00'; thence N 0 00' E, 40.00'; thence N 90 00' E, 54.00'; thence N 0 00' E, 10.00'; thence N 90 00' E, 50.00'; thence S 0 00' E, 80.00'; thence N 90 00' E, 136.23'; thence N 0 00' E, 40.00'; thence N 90 00' E, 75.00'; thence S 0 00' E, 78.00;' thence N 90 00' W, 464.23'; thence 0 00' E, 55.00'; to the point of beginning; said land being 0.633 more or less acres, less than and except all structures not included in the Mead Corporation Contract No. 21- 3097A.
PARCEL 8A
A tract of land situated in the Northwest Quarter of the Northeast Quarter (NW 1/4 of NE 1/4) and the Southwest Quarter of the Northeast Quarter (SW 1/4 of NE 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28 Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2806.62 feet to a point; thence turn right and run due South a distance of 1210.86 feet to a point at the western end of the Bark Handling System, such point being the beginning of the tract of land herein described.
Begin at such point of beginning, turn an angle to the left and run North 45 degrees 00 minutes East a distance of 63.64 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run easterly a distance of 310.00 feet to a point; thence turn an angle to the right 45 degrees 00 minutes and run southeasterly a distance of 63.64 feet to a point; thence turn an angle to the left 45 degrees 00 minutes and run easterly a distance of 270.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 155.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 136.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 94.35 feet to a point; thence turn an angle to the right 30 degrees 00 minutes and run southwesterly a distance of 263.00 feet to a point; thence turn an angle to the left 30 degrees 00 minutes and run southerly a distance of 132.88 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 84.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 405.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 120.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 115.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run westerly a distance of 470.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 90.00 feet to the point of beginning.
PARCEL 8B
A tract of land situated in the Northeast Quarter of the Northwest Quarter (NE 1/4 of NW 1/4) and the Southeast Quarter of the Northwest Quarter (SE 1/4 of NW 1/4) of Section 28, Township 14 North, Range 30 East, Russell County, Alabama, being more particularly described as follows:
Commence at the Northwest corner of Section 28, Township 14 North, Range 30 East; thence run South 89 degrees 33 minutes 20 seconds East along the North Boundary of such Section 28 a distance of 2290.86 feet to a point; thence turn right and run due South a distance of 1225.36 feet to a point at the Northeast corner of the #2 Bark Boiler Building, such point being the point of beginning of the tract of land herein described.
Being at such point of beginning, continue due South a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run westerly a distance of 67.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run northerly a distance of 95.75 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 15.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run northerly a distance of 40.00 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run easterly a distance of 34.50 feet to a point; thence turn an angle to the right 90 degrees 00 minutes and run southerly a distance of 40.00 feet to a point; thence turn an angle to the left 90 degrees 00 minutes and run easterly a distance of 18.00 feet to the point of beginning.
PARCEL 9
All that portion of land, and structures lying thereon, in Section 28, T14N, R 30 E, County of Russell, State of Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 794,023.97, E 232,940.10 of the West Zone of the State of Georgia Coordinate System; thence S 52 11' 16" E
(collectively, (Parcels 1 through 9) the "Other Leased Land")
together with the following easements:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the Other Leased Land in order to provide all necessary or convenient ingress or egress between the 1997 Leased Land and railroads, public roads and highways and the Chattahoochee River and to permit passage between the 1997 Leased Land and the Other Leased Land;
(b) An easement and right for the passage of pedestrians and vehicles and for the construction, erection, installation, operation, maintenance, renewal, replacement and use of material conveying systems, including without limitation pipelines, through any part of the Other Leased Land necessary or convenient in order to assure the passage of equipment, raw materials, items in the process of manufacture, and finished products from the 1997 Leased Land to the Other Leased Land, including without limitation such rights and easements as are necessary for the movement of personnel, vehicles and materials among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of the Project;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the Other Leased Land, such pipes, conduits, and wires as are necessary or convenient to insure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the 1997 Leased Land and the Project including, without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the Other Leased Land; and
(d) An easement and right to create and maintain upon the Other Leased Land encroachments of equipment, structures or other improvements which will be included on the 1997 Leased Land and within the Project as presently planned, and any similar replacements or substitutions of portions of the Project for as long as any such equipment, structures or other improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect any such equipment, structure or other improvements to any structure or improvement on the Other Leased Land;
but subject to the following easements over the 1997 Leased Land in favor of the Other Leased Land:
(a) An easement and right for pedestrian and vehicular traffic to use all present and future walks, railroads, roads, driveways and docks upon the 1997 Leased Land in order to provide all necessary or convenient ingress and egress among and between all portions of the Other Leased Land and between the Other Leased Land and the 1997 Leased Land, including without limitation portions on which additional improvements may be erected, and railroads, public works and highways and the Chattahoochee River and to permit passage among and between the various parcels of land comprising the Other Leased Land;
(b) An easement and right for the passage of pedestrians, vehicles, and for the construction, installation, operation, maintenance, renewal, replacement
and use of material conveyance systems, including without limitation, pipelines, through any part of the 1997 Leased Land necessary or convenient in order to assure the passage of equipment, and finished products from one portion of the Other Leased Land to another or between the Other Leased Land and the 1997 Leased Land, including, without limitation such rights and easements as are necessary for the movement of personnel, vehicles and material among and between the various parcels of land comprising the Other Leased Land in order to permit and facilitate the operation of any facilities located on the Other Leased Land;
(c) An easement and right to erect, install, construct, maintain, renew, replace and use on, over and under any part of the 1997 Leased Land, such pipes, conduits, and wires and appurtenances as are necessary or convenient to assure access to and an adequate system for or supply of gas, oil, steam, compressed air, process and space heat, water, fire protection, sewage and industrial waste disposal, electricity, communications, instrumentation and control, and other similar facilities to the Other Leased Land, including without limitation, the right to make connections with machinery, equipment, pipes, conduits and wires, structures and other improvements and appurtenances thereto, on the 1997 Leased Land; and
(d) An easement and right to maintain any present equipment, structures or other improvements included within the facilities presently located on the Other Leased Land as encroachments upon the 1997 Leased Land as long as any such equipment, structures or other improvements remain standing, and to construct and maintain similar encroachments on the 1997 Leased Land in respect of any additional improvements constructed adjacent to the 1997 Leased Land, as long as any such additional improvements remain standing, including without limitation the rights of lateral or party wall support, and to connect such additional improvements to any structure or any improvements on the 1997 Leased Land.
subject in all cases to the following:
(1) Lease Agreement dated as of November 1, 1983 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1983;
(2) Lease Agreement dated as of December 1, 1983 between the Board as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Georgia Kraft Project), Series 1983;
(3) Lease Agreement dated as of December 1, 1985 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Georgia Kraft Project), Series 1985;
(4) Lease Agreement dated as of July 1, 1986 between the Board, as lessor, and the Company (as assignee of Georgia Kraft Company), as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Georgia Kraft Project), Series 1986;
(5) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1988;
(6) Lease Agreement dated as of December 1, 1988 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A, 1989A, 1989B, 1989C, 1989D, 1989E, 1900A and 1991A;
(7) Lease Agreement dated as of June 1, 1990 between the Board, as lessor, and Industrial Warehouse Services, Inc., as lessee, as amended and supplemented from time to time, relating to the Board's First Mortgage Revenue Bonds (Industrial Warehouse Services, Inc.), Series 1990;
(8) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1993A;
(9) Lease Agreement dated as of June 1, 1993 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1993A and 1995A;
(10) Lease Agreement dated as of March 1, 1996 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Bonds (Mead Coated Board Project), Series 1996;
(11) Lease Agreement dated as of September 1, 1997 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1997A and 1998A;
(12) Lease Agreement dated as of February 1, 1998 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1998A; and
(13) Lease Agreement dated as of February 1, 1998 between the Board, as lessor, and the Company, as lessee, as amended and supplemented from time to time, relating to the Board's Environmental Improvement Revenue Refunding Bonds (Mead Coated Board Project), Series 1998B.
Exhibit 10.xxvi
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF STEVENSON
and
THE MEAD CORPORATION
LEASE AGREEMENT
Dated as of March 1, 1998
Relating to Environmental Improvement Revenue Bonds (The Mead Corporation Project) of The Industrial Development Board of the City of Stevenson
TABLE OF CONTENTS
(The Table of Contents for this Lease Agreement is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of this Lease Agreement.)
Page ---- ARTICLE I - DEFINITIONS.................................................................................................. 1 Section 1.1 Definitions........................................................................................... 1 Section 1.2 Certain Rules of Interpretation....................................................................... 8 ARTICLE II - REPRESENTATIONS............................................................................................. 8 Section 2.1 Representations by the Issuer......................................................................... 8 Section 2.2 Representations by the Company........................................................................ 10 ARTICLE III - LEASING CLAUSES AND TITLE TO PROJECT....................................................................... 11 Section 3.1 Lease of the Project.................................................................................. 11 Section 3.2 Title to Project...................................................................................... 11 Section 3.3 Quiet Enjoyment....................................................................................... 11 ARTICLE IV - ACQUISITION, CONSTRUCTION, INSTALLATION,EQUIPPING AND COMPLETION OF THE PROJECT;ISSUANCE OF THE BONDS....... 11 Section 4.1 Acquisition, Construction, Installation, Equipping and Completion of the Project...................... 11 Section 4.2 Issuance of Bonds; Disbursements from the Project Funds............................................... 13 Section 4.3 Establishment of Completion Date; Excess Proceeds..................................................... 13 Section 4.4 Insufficiency of Project Funds........................................................................ 14 Section 4.5 Issuer to Pursue Remedies Against Suppliers, Contractors and Subcontractors and Their Sureties........ 14 ARTICLE V - EFFECTIVE DATE OF THIS AGREEMENT;DURATION OF LEASE TERM; RENTAL PROVISIONS................................... 15 Section 5.1 Effective Date of This Agreement; Duration of Lease Term.............................................. 15 Section 5.2 Delivery and Acceptance of Possession................................................................. 15 Section 5.3 Rental Payments....................................................................................... 15 Section 5.4 Obligation of the Company Unconditional............................................................... 16 Section 5.5 Assignment and Pledge of Rental Payments and the Agreement............................................ 17 Section 5.6 Purchase of Bonds..................................................................................... 17 Section 5.7 Mandatory Purchase of Bonds........................................................................... 17 Section 5.8 Determination of Interest Rate Periods................................................................ 18 ARTICLE VI - SPECIAL COVENANTS........................................................................................... 18 Section 6.1 Use of Project........................................................................................ 18 Section 6.2 Use of Proceeds....................................................................................... 18 Section 6.3 Indemnity Against Claims.............................................................................. 18 Section 6.4 Inspection of the Project............................................................................. 19 Section 6.5 Company to Maintain Its Corporate Existence; Conditions Under Which Exceptions Permitted.............. 19 Section 6.6 Ownership; Further Assurances and Corrective Instruments.............................................. 19 Section 6.7 Maintenance of Project by Company..................................................................... 19 Section 6.8 Redemption or Purchase of Bonds....................................................................... 20 Section 6.9 Investment of Bond Fund and Project Fund Moneys Permitted............................................. 21 Section 6.10 Non-Arbitrage Covenant................................................................................ 21 Section 6.11 Removal and Substitution of Portions of Project....................................................... 22 Section 6.12 Taxes, Other Governmental Charges and Utility Charges................................................. 23 Section 6.13 Insurance Required.................................................................................... 24 Section 6.14 Application of Net Proceeds of Insurance.............................................................. 24 Section 6.15 Additional Provisions Respecting Insurance............................................................ 24 Section 6.16 Granting of Easements................................................................................. 24 Section 6.17 Release of Certain Land............................................................................... 25 ARTICLE VII - DAMAGE, DESTRUCTION AND CONDEMNATION....................................................................... 26 Section 7.1 Damage and Destruction................................................................................ 26 |
Section 7.2 Condemnation........................................................................ 26 Section 7.3 Condemnation of Company-Owned Property.............................................. 27 ARTICLE VIII - ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING; REDEMPTION; RENT PREPAYMENT AND ABATEMENT; OPTION AND OBLIGATION TO PURCHASE PROJECT; OPTION TO EXTEND TERM OF AGREEMENT.......... 28 Section 8.1 Assignment and Subleasing........................................................... 28 Section 8.2 Pledge Under Indenture.............................................................. 28 Section 8.3 Restrictions on Sale of Project by Issuer........................................... 28 Section 8.4 Prepayment of Rents; Option to Purchase Project; Obligation to Purchase Project..... 29 Section 8.5 Rent Abatements If Bonds Paid Prior to Maturity..................................... 30 Section 8.6 References to Bonds Ineffective After Bonds Paid.................................... 30 Section 8.7 Option to Extend.................................................................... 31 ARTICLE IX - AMENDMENTS AND SUPPLEMENTS................................................................ 31 Section 9.1 Additional Bonds.................................................................... 31 Section 9.2 Conveyance of Project............................................................... 31 Section 9.3 No Other Amendments................................................................. 31 ARTICLE X - EVENTS OF DEFAULT AND REMEDIES............................................................. 32 Section 10.1 Events of Default................................................................... 32 Section 10.2 Remedies on Default................................................................. 33 Section 10.3 Agreement to Pay Attorneys' Fees and Expenses....................................... 34 Section 10.4 No Additional Waiver Implied by One Waiver.......................................... 34 Section 10.5 Notice of Default................................................................... 34 ARTICLE XI - MISCELLANEOUS............................................................................. 34 Section 11.1 Notices............................................................................. 34 Section 11.2 Binding Effect...................................................................... 35 Section 11.3 Severability........................................................................ 35 Section 11.4 Amounts Remaining in the Bond Fund.................................................. 35 Section 11.5 Termination......................................................................... 35 Section 11.6 Execution in Counterparts........................................................... 35 Section 11.7 Applicable Law...................................................................... 35 Section 11.8 Captions............................................................................ 35 Section 11.9 Recording of Agreement.............................................................. 35 Section 11.10 Net Lease........................................................................... 35 Exhibit A Project Land............................................................................... A-1 Exhibit B Description of Project..................................................................... B-1 Exhibit C Form of Requisition........................................................................ C-1 |
THIS LEASE AGREEMENT, dated as of March 1, 1998, between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF STEVENSON, a public corporation duly organized and existing under the laws of the State of Alabama, as lessor (the "Issuer"), and THE MEAD CORPORATION, a corporation organized and existing under the laws of the State of Ohio (the "Company"), evidencing the agreement of the parties hereto.
In consideration of the respective representations and agreements hereinafter contained, the parties hereto agree as follows (provided that in the performance of the agreements of the Issuer herein contained, any obligation the Issuer may thereby incur for the payment of money shall not be a general debt, liability or obligation of the Issuer, or of the State or any political subdivision thereof, but shall be payable solely out of the rents, revenues and proceeds derived from this Agreement (hereinafter defined) and the sale of the Bonds referred to herein:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. In addition to the words and terms elsewhere defined herein, the following words and terms as used herein have the following meanings unless the context or use clearly indicates another or different meaning or intent, and any other words and terms not defined herein and defined in the Series 1998A Indenture have the same meanings as assigned to them in the Series 1998A Indenture when used herein unless the context or use clearly indicates another or different meaning or intent:
"Act" means the statutes codified as Code of Alabama 1975, Title 11, Chapter 54, Article 4, as amended and supplemented and at the time in force and effect.
"Additional Bonds" means bonds that may be issued under any Subsequent Indenture and that are provided for in this Agreement or one or more Supplemental Leases as provided in Section 9.1 of this Agreement.
"Agreement" means this Lease Agreement and any amendments and supplements hereto.
"Authorized Company Representative" means any person or persons designated to act on behalf of the Company by a certificate filed with the Issuer and a Trustee containing the specimen signature of each such person and signed by the President, Vice President or Treasurer of the Company.
"Authorized Issuer Representative" means any person or persons designated to act on behalf of the Issuer by a certificate filed with the Issuer and a Trustee containing the specimen signature of each such person and signed by the Chairman or Secretary of the Issuer.
"Bond Counsel" means an attorney-at-law or a firm of attorneys of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States of America, selected by the Company and acceptable to the applicable Trustee.
"Bond Funds" means the Series 1998A Bond Fund and any similar funds created under Subsequent Indentures for payment of principal and interest on Additional Bonds.
"Bonds" means the Series 1998A Bonds and any Additional Bonds.
"Business Day" means any day other than (i) a Saturday or Sunday or legal holiday or a day on which banking institutions in the city or cities (A) in which the principal offices of any Trustee, Tender Agent or Remarketing Agent are located or (B) in which drawings under any Credit Facility are required to be made, are authorized by law to close or (ii) a day on which the New York Stock Exchange is closed.
"Code" means the United States Internal Revenue Code of 1986, as amended. References to the Code and to Sections of the Code shall include relevant final, temporary or proposed regulations thereunder.
"Completion Date" means the date of completion of the acquisition, construction, installation and equipping of the Project (hereinafter defined) as such date shall be certified as provided in Section 4.3 hereof.
"Cost of Construction" with respect to the Project means the following:
(a) obligations incurred for labor and materials (including reimbursements payable to the Company or the Issuer and payments on contracts in the name of the Company or the Issuer) in connection with the acquisition, construction, installation and equipping of the Project;
(b) the cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of construction of the Project;
(c) all costs of engineering services, including the costs for test borings, surveys, estimates, plans and specifications and preliminary investigation therefor, and for supervising construction, as well as for the performance of all other duties required by or consequent upon the proper construction of the Project;
(d) overhead of the Company, to the extent not included in subparagraph (c) above, allocable to the Project by the Company in accordance with generally accepted accounting principles;
(e) interest to accrue in respect of the Bonds and costs of any Credit Facilities to the Completion Date;
(f) amounts paid to the United States Treasury pursuant to regulations promulgated pursuant to Section 148(f) of the Code;
(g) subject to the limitations of Section 147(g) of the Code, all expenses incurred in connection with the issuance of the Bonds or Additional Bonds, including without limitation initial compensation and expenses of the Trustee, legal expenses and fees, costs of printing and engraving, recording and filing fees, compensation of the underwriters, if any, and rating agency fees;
(h) all other costs which may properly be paid or accrued for the acquisition, construction, installation, equipping or financing of the Project; and
(i) any sums required to reimburse the Company for advances made for any of the above items or for any other costs incurred or for work done which are properly chargeable to the Project.
"Event of Default" means any of the occurrences enumerated in Section 10.1 of this Agreement.
"Exempt Costs" means Cost of Construction of the Project to the extent that the payment thereof would constitute, within the meaning of Sections 142(a)(5) or 142(a)(6) of the Code, the payment of costs to provide facilities that are sewage or solid waste disposal facilities within the meaning of such sections of the Code or facilities functionally related and subordinate thereto, excluding amounts paid as costs of issuance of the Bonds but including fees paid to any issuer of a Credit Facility during the construction of the Project.
"Extraordinary Services" and "Extraordinary Expenses" means all services rendered and all expenses incurred by the Trustees under the Indentures other than Ordinary Services and Ordinary Expenses.
"Government Obligations" has the meaning set forth in Article I of the Series 1998A Indenture.
"Guarantee" means the Guarantee Agreement dated as of March 1, 1998 by and between the Company and the Series 1998A Trustee with respect to the Series 1998A Bonds, and with respect to any issue or series of Additional Bonds, any guarantee agreement between the Company and a Trustee under the Indenture applicable to such issue or series of Additional Bonds.
"Indentures" means the Series 1998A Indenture and any Subsequent Indentures.
"Issuer" means The Industrial Development Board of the City of Stevenson, a public corporation of the State created and existing pursuant to the Act by a Certificate of Incorporation duly filed for record in the office of the Judge of Probate of Jackson County, Alabama on June 11, 1962, as amended, on March 13, 1973, and its successors and assigns.
"Lease Term" means the duration of the leasehold interest created hereby as specified in Section 5.1.
"Mill" means the corrugating medium mill operated by the Company and located near Stevenson, Alabama.
"Net Proceeds" means, with respect to the Bonds, the amount of the proceeds of the sale of the Bonds deposited into the Project Funds less the amount paid or to be paid out from such proceeds for the payment of costs of issuance of the Bonds plus any investment income earned on moneys in the Project Funds.
"Net Proceeds" means, with respect to any insurance or condemnation awards, the gross proceeds from the insurance or condemnation award with respect to which that term is used remaining after the payment of all expenses (including, without limitation, attorneys' fees and any Extraordinary Expenses of the Trustees) incurred in the collection of such gross proceeds.
"Ordinary Services" and "Ordinary Expenses" mean those services normally rendered and those expenses normally incurred by a trustee under instruments comparable to the Indentures, including but not limited to reasonable fees of its counsel.
"Paying Agent" means the paying agent appointed by the Issuer pursuant to
Section 9.01 of the Series 1998A Indenture and any paying agents appointed
pursuant to the applicable provisions of any Subsequent Indentures.
"Permitted Encumbrances" means, as of any particular time,
(a) liens for ad valorem taxes, special assessments or other governmental charges not then delinquent or permitted to exist as provided in Section 6.12;
(b) this Agreement;
(c) such utility, access or other easements and rights-of-way, restrictions, reservations, reversions and exceptions as the Authorized Company Representative certifies will not materially interfere with or impair the operation of the Project (or, if it is not being operated, the operations for which it was designed or last modified);
(d) unfiled and inchoate mechanics' and materialmen's liens for construction work in progress;
(e) mechanics', materialmen's, suppliers' and vendors' liens or other
similar liens not then payable, and those permitted to exist as provided in
Section 6.7;
(f) such minor defects, irregularities, encumbrances, easements, rights-of-way and clouds on title as the Authorized Company Representative certifies do not, in the aggregate, materially impair the property affected thereby for the purpose for which it was acquired or is held by the Issuer or the Company;
(g) that certain Lease Agreement dated as of September 1, 1974 between the Company and the Issuer;
(h) that certain Mortgage and Indenture of Trust dated as of September 1, 1974 between the Issuer and First National Bank of Birmingham, as trustee;
(i) that certain Lease Agreement dated as of December 1, 1974 between the Company and the Issuer;
(j) that certain Mortgage and Indenture of Trust dated as of December 1, 1974 between the Issuer and First National Bank of Birmingham, as trustee;
(k) that certain Lease Agreement dated as of February 1, 1975 between the Company and the Issuer;
(l) that certain Mortgage and Indenture of Trust dated as of February 1, 1975 between the Issuer and First National Bank of Birmingham, as trustee;
(m) that certain Lease Agreement dated as of June 1, 1978 between the Company and the Issuer;
(n) that certain Mortgage and Indenture of Trust dated as of June 1, 1978 between the Issuer and The First National Bank of Birmingham, as trustee;
(o) that certain Lease Agreement dated as of April 1, 1979 between the Company and the Issuer;
(p) that certain Mortgage and Indenture of Trust dated as of April 1, 1979 between the Issuer and The First National Bank of Birmingham, as trustee;
(q) that certain Lease Agreement dated as of November 1, 1986 between the Company and the Issuer;
(r) that certain Mortgage and Trust Indenture dated as of November 1, 1986 between the Issuer and Irving Trust Company, as trustee;
(s) that certain Lease Agreement dated as of April 1, 1991, as amended, between the Company and the Issuer;
(t) that certain Lease Agreement dated as of December 1, 1993, as amended, between the Company and the Issuer;
(u) that certain Lease Agreement dated as of February 1, 1996 between the Company and the Issuer; and
(v) that certain Lease Agreement dated as of June 1, 1997 between the Company and the Issuer.
"Permitted Investments" has the meaning set forth in Article I of the Series 1998A Indenture.
"Plans" means the plans and specifications prepared by or on behalf of the Company for the Project, as the same may be revised from time to time by the Company in accordance with the second paragraph of Section 4.1 hereof, which are on file with the Company and accessible to the Issuer.
"Project" means the acquisition, construction and installation of sewage and solid waste disposal facilities, including sewage collection, treatment and disposal facilities and a chemical recovery and recycling system, including a recovery boiler and a woodwaste boiler and related wood waste handling systems, as described in Exhibit "B" hereto.
"Project Land" means the real property described in Exhibit "A" hereto less
such real property as may be released from this Agreement pursuant to Section
6.17 or taken by the exercise of the power of eminent domain as provided in
Section 7.2.
"Project Funds" means the Series 1998A Project Fund and the Series 1998B Project Fund.
"Project Site" means the site of the Mill.
"Remarketing Agent" means the remarketing agent appointed in accordance with Section 12.01 of the Series 1998A Indenture and any additional remarketing agents appointed in accordance with the applicable provisions of any Subsequent Indentures.
"Series 1998A Bonds" means The Industrial Development Board of the City of Stevenson Environmental Improvement Revenue Bonds (The Mead Corporation Project), Series 1998A (Taxable) issued in the aggregate principal amount of $82,500,000.
"Series 1998A Bond Fund" means the fund created by Section 5.02 of the Series 1998A Indenture for payment of principal and interest on the Series 1998A Bonds.
"Series 1998A Indenture" means the Trust Indenture dated as of March 1, 1998 between the Issuer and the Series 1998A Trustee with respect to the Series 1998A Bonds, pursuant to which the Series 1998A Bonds are authorized to be issued, as amended or supplemented from time to time.
"Series 1998A Project Fund" means the fund created pursuant to Section 5.04 of the Series 1998A Indenture.
"Series 1998A Tender Agent" means the initial and any successor tender agent appointed in accordance with Section 12.02 of the Series 1998A Indenture.
"Series 1998A Trustee" means Citibank, N.A., New York, New York, and its successors and assigns and any other entity that may be serving as successor trustee or co-trustee under the Series 1998A Indenture.
"Series 1998B Bonds" means The Industrial Development Board of the City of Stevenson Environmental Improvement Revenue Bonds (The Mead Corporation Project), Series 1998B to be issued in the aggregate principal amount of $25,000,000.
"Series 1998B Indenture" means the Trust Indenture to be dated as of April 1, 1998 between the Issuer and a Trustee with respect to the Series 1998B Bonds, pursuant to which the Series 1998B Bonds are authorized to be issued, as amended or supplemented from time to time.
"Series 1998B Project Fund" means the fund to be created under the Series 1998B Indenture for the disbursement of proceeds of the Series 1998B Bonds to pay costs of the Project.
"State" means the State of Alabama.
"Subsequent Indenture" means any one or more Indentures, other than the Series 1998A Indenture, between the Issuer and a Trustee with respect to any issue or series of Additional Bonds, which provides for the financing of additional costs of the Project or the refunding of all or any portion of the Series 1998A Bonds or any Additional Bonds in accordance with the terms of the Series 1998A Indenture or any Subsequent Indenture relating to the refunded Additional Bonds.
"Supplemental Lease" means any supplement to or amendment of this Agreement
entered into by the Issuer and the Company pursuant to and in accordance with
Section 9.1 hereof.
"Taxable Bonds" means the Series 1998A Bonds and any Additional Bonds that are not Tax-Exempt Bonds.
"Tax-Exempt Bonds" means any Additional Bonds issued by the Issuer under the Act, the interest on which is excludable from the gross income of the holders thereof for federal income tax purposes under Section 103 of the Code.
"Tender Agents" means the Series 1998A Tender Agent and any additional tender agents appointed in accordance with the applicable provisions of any Subsequent Indentures.
"Trust Estate" means, with respect to each Indenture, the property described in the granting clauses of such Indenture.
"Trustees" means the Series 1998A Trustee and all other entities, if any, serving as trustees under any Subsequent Indentures.
Section 1.2 Certain Rules of Interpretation. The definitions set forth in
Section 1.1 shall be equally applicable to both the singular and plural forms of
the words and terms therein defined and shall cover all genders.
"Herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this Agreement and not solely to the particular Article, Section or subdivision in which such word is used.
Reference herein to an Article number (e.g., Article IV) or a Section number (e.g., Section 3.2) shall be construed to be a reference to the designated Article number or Section number hereof unless the context or use clearly indicates another or different meaning or intent.
ARTICLE II
REPRESENTATIONS
Section 2.1 Representations by the Issuer. The Issuer makes the following representations as the basis for the undertakings on its part herein contained:
Securities Commission notification of the Issuer's intention to issue the Series 1998A Bonds as required by Code of Alabama, Section 8-6-110 et seq., as amended, and the Director of the Alabama Securities Commission has issued a Certificate of Notification with respect to the Series 1998A Bonds pursuant to the aforesaid act and said Certificate of Notification has not been revoked or rescinded and is in full force and effect;
Section 2.2 Representations by the Company. The Company makes the following representations as the basis for the undertakings on its part herein contained:
and (iii) have been duly authorized by all necessary action on the part of the Company;
ARTICLE III
LEASING CLAUSES AND TITLE TO PROJECT
Section 3.1 Lease of the Project. The Issuer hereby leases to the Company, and the Company hereby leases from the Issuer, the Project at the rent set forth in Section 5.3 and in accordance with the provisions hereof.
Section 3.2 Title to Project. Upon the execution and delivery hereof, the Issuer agrees that it will furnish to the Company and the Trustee an opinion of the Issuer's Counsel or other evidence satisfactory to the Company demonstrating that the Issuer has good fee simple title and/or a leasehold interest in and to the Project subject only to Permitted Encumbrances.
Section 3.3 Quiet Enjoyment. The Issuer warrants and agrees that it will defend the Company in the quiet enjoyment and peaceable possession of the Project, free from all claims of all persons claiming by, through or under the Issuer, throughout the Lease Term, so long as the Company performs the agreements to be performed by it hereunder, or so long as the period for remedying any failure in such performance has not expired.
ARTICLE IV
ACQUISITION, CONSTRUCTION, INSTALLATION,
EQUIPPING AND COMPLETION OF THE PROJECT;
ISSUANCE OF THE BONDS
Section 4.1 Acquisition, Construction, Installation, Equipping and Completion of the Project. Not later than the delivery hereof the Issuer will have acquired fee simple title in and to the Project, and subject to the provisions of Section 4.4, the Issuer agrees that:
(a) It will acquire, construct, install and equip facilities necessary for the Project. The aforesaid acquisition, construction, installation and equipping shall be substantially in accordance with the Plans. The Project shall be the property of the Issuer and subject to the terms hereof.
(b) Subject to the provisions of the following paragraphs, it will cause to be acquired, constructed, installed and equipped such additional machinery, equipment and related property described in the attached Exhibit "B" and such other items of machinery, equipment and related property as in the Company's judgment may be necessary for the operation of the Project. Such additional machinery, equipment and related property shall become a part of the Project and shall be the property of the Issuer and subject to the terms hereof.
The Issuer and the Company agree that the Company from time to time may supplement or amend the Plans (including additions thereto or omissions therefrom), provided that no such amendment may provide for a material addition to, deletion from or modification of the Plans unless there has been filed with the Issuer and the Trustee (i) a revised Exhibit "B" containing a description of the Project as revised by such amendment or modification, the accuracy of which has been certified by an Authorized Company Representative, and (ii) the written opinion of a firm of nationally recognized Bond Counsel experienced in the financing of sewage and solid waste disposal facilities stating that (a) the Project as provided for in such modified or amended Plans will constitute a "project" within the meaning of the Act, and (b) the expenditure of moneys from the Project Fund to pay the Cost of Construction in accordance with such amended or modified Plans will not impair the exclusion from gross income of interest on the Tax-Exempt Bonds for purposes of federal income taxation.
The Issuer hereby makes, constitutes and appoints the Company as its true, lawful and exclusive agent for the acquisition, construction, installation and equipping of the Project, and the Company hereby accepts such agency to act and do all things on behalf of the Issuer, to perform all acts and agreements of the Issuer hereinabove provided in this Section 4.1, and to bring any actions or proceedings against any person which the Issuer might bring with respect thereto as the Company shall deem proper. The Issuer hereby ratifies and confirms all actions of, and assumes and adopts all contracts entered into by, the Company with respect to the Project prior to the date hereof. This appointment of the Company to act as agent and all authority hereby conferred or granted is conferred and granted irrevocably until all activities in connection with the acquisition, construction, installation and equipping of the Project have been completed, and shall not be terminated prior thereto by act of the Issuer or of the Company. So long as the Company is not in default hereunder, upon the Completion Date (or at any time prior thereto upon the request of the Company) the Issuer will assign to the Company all warranties and guarantees of all contractors, subcontractors, suppliers, architects and engineers for the furnishing of labor, materials or equipment or supervision or design in connection with the Project and any rights or causes of action arising from or against any of the foregoing.
The Issuer agrees to complete the acquisition, construction, installation and equipping of the Project as promptly as practicable after receipt of the proceeds from the sale of the Series 1998A Bonds, to continue said acquisition, construction, equipping and installation with all reasonable dispatch and to use its best efforts to cause said acquisition, construction, equipping and installation to be completed as soon as practicable, delays incident to strikes, riots, acts of God or the public enemy beyond the reasonable control of the Issuer only excepted, but if said acquisition, construction and installation is not completed within the time herein contemplated there shall be no resulting liability on the part of the Issuer
and no diminution in or postponement or abatement of the rents and other payments required by Section 5.3 to be paid by the Company.
Section 4.2 Issuance of Bonds; Disbursements from the Project Funds. In order to provide funds to finance the Cost of Construction, the Issuer agrees that it initially will issue and deliver the Series 1998A Bonds to the purchasers thereof and apply and deposit the proceeds thereof in accordance with the terms of the Series 1998A Indenture. The Company has approved the Series 1998A Indenture in form and substance, approves the issuance of the Series 1998A Bonds in accordance with the Series 1998A Indenture and approves the manner and purposes for which proceeds of the Series 1998A Bonds may be used and invested pursuant to the Series 1998A Indenture. The Issuer has authorized and directed the Series 1998A Trustee to disburse moneys from the Series 1998A Project Fund for payment or reimbursement of the Cost of Construction.
Each disbursement from a Project Fund shall be made only upon receipt by the applicable Trustee of a written requisition signed by the Authorized Company Representative in substantially the form of Exhibit "C" attached hereto, stating with respect to each payment to be made: (a) the requisition number, (b) the name and address (or wire transfer instructions) of the person, firm or corporation to whom payment is due, (c) the amount to be paid, (d) identifying the applicable Project Fund and certifying that each obligation mentioned therein has been properly incurred and is a proper charge against such Project Fund, specifying in reasonable detail the purpose and circumstances of such obligation and certifying that such obligation has not been the basis of any previous withdrawal from any Project Fund, and (e) with respect to requisitions for the payment of costs other than Exempt Costs, certifying that, except with respect to amounts requested for the payment of the costs of issuance of the Bonds, payment of such requisition will not result in less than 95% of the total proceeds of the sale of the Bonds expended at that time having been used to pay Exempt Costs.
In approving or certifying any requisition under this Section 4.2 the Issuer and the applicable Trustee may rely as to the completeness and accuracy of all statements in such requisition upon the approval of or certification to such requisition by the Authorized Company Representative, and the Company hereby agrees to indemnify and save harmless the Issuer and the Trustees, and each of their directors, officers, members, agents and employees from any liability incurred in connection with any requisition so approved or certified.
Section 4.3 Establishment of Completion Date; Excess Proceeds. The Completion Date shall be evidenced to the Trustees by a certificate of the Authorized Company Representative: (i) stating that the Project has been completed substantially in accordance with the Plans, (ii) stating that, except for amounts retained by any Trustee at the Company's direction for any Cost of Construction of the Project not then due and payable or which is in dispute, the entire Cost of Construction of the Project has been paid, and (iii) stating that not less than 95% of the total proceeds of the sale of the Bonds have been used to pay Exempt Costs. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties which exist at the date of such certificates or which may subsequently come into being.
If moneys remain in either Project Fund after payment of all of the Cost of Construction of the Project, such moneys, at the direction of the Company, shall be used (i) for the redemption of Bonds for which such Project Fund was established in the largest amount possible at the earliest date permitted by the applicable Indenture at which the redemption price for such Bonds to be redeemed is 100% of the principal amount thereof plus accrued interest to the redemption date, or for the purchase of such Bonds upon completion of the Project as provided in the applicable Indenture or otherwise for the purpose of cancellation at any time prior to the earliest date permitted by the
applicable Indenture for the redemption of such Bonds, (ii) paid into the Bond
Fund established for such Bonds to pay interest on such Bonds, or (iii) a
combination of (i) and (ii) above; provided, however, that if any Tax-Exempt
Bonds are outstanding such moneys shall not be used as described in (i), (ii) or
(iii) above unless the Company supplies the applicable Trustees with an opinion
of Bond Counsel to the effect that such use will not adversely affect the
exclusion from gross income of the interest on the Tax-Exempt Bonds for federal
income tax purposes. The Company agrees that any investments it may direct of
any such amounts that are held in one or more Project Funds or Bond Funds
established for the deposit of proceeds of Tax-Exempt Bonds shall result in a
yield on such investments, computed in accordance with the applicable provisions
of (S)(S) 1.148-0 to 1.148-11 of the Treasury Regulations, not in excess of the
yield (computed in the same manner) on such Tax-Exempt Bonds.
Section 4.4 Insufficiency of Project Funds. The Issuer does not make any warranty, either express or implied, that the amounts in the Project Funds and available for payment of the Cost of Construction of the Project will be sufficient to pay all of the Cost of Construction. The Company agrees that in the event that moneys in the Project Funds are insufficient to pay all of the Cost of Construction, the Company shall complete the acquisition, construction, installation and equipping of the Project, and shall pay or make funds available to the Issuer to pay that portion of the Cost of Construction in excess of the moneys available therefor in the Project Funds. The Company agrees that, if after exhaustion of the amounts of the Project Funds, it should pay any portion of the Cost of Construction, it shall not be entitled to any diminution of the amounts payable under as provided in Section 5.3 hereof.
Section 4.5 Issuer to Pursue Remedies Against Suppliers, Contractors and Subcontractors and Their Sureties. At the direction and sole cost of the Company (to the extent that such cost is not payable and actually paid from the Project Funds), the Issuer will promptly proceed, either separately or in conjunction with others, to exhaust the remedies of the Issuer against any defaulting supplier, contractor or subcontractor and against any surety therefor, for the performance of any contract made in connection with the Project. If the Company so notifies the Issuer, the Company may, in its own name or in the name of the Issuer, prosecute or defend any action or proceeding or take any other action involving any such supplier, contractor, subcontractor or surety which the Company deems reasonably necessary, and in such event the Issuer agrees to cooperate fully with the Company and to take all action necessary, to the extent it might lawfully do so, to effect the substitution of the Company for the Issuer in any such action or proceeding. Any moneys recovered by way of damages, refunds, adjustments or otherwise in connection with the foregoing prior to the Completion Date shall be paid into the Project Funds and after the Completion Date shall be used as authorized by Section 4.3.
ARTICLE V
EFFECTIVE DATE OF THIS AGREEMENT;
DURATION OF LEASE TERM; RENTAL PROVISIONS
Section 5.1 Effective Date of This Agreement; Duration of Lease Term. This Agreement shall become effective upon its execution and delivery and the leasehold interest created hereby with respect to the Project shall then begin, and, subject to the other provisions hereof, shall expire at midnight, March 1, 2033, or sooner upon payment or redemption of the Bonds as hereinafter provided subject to extension as provided in Section 8.7.
Section 5.2 Delivery and Acceptance of Possession. The Issuer agrees to deliver to the Company sole and exclusive possession of the Project (subject to the right of the Issuer and the Trustees to inspect the same pursuant to Section 6.4) on the Completion Date and the Company agrees to accept possession of the Project upon such delivery; provided, however, that
the Company shall be permitted such possession of the Project prior to the Completion Date as shall not interfere with the acquisition, construction, installation and equipping of the Project.
Section 5.3 Rental Payments.
(a) As rent for the Project, the Company agrees to pay to each Trustee, as assignee and pledgee of and for the account of the Issuer, for deposit in the respective Bond Fund, amounts sufficient, together with other moneys held by such Trustee under the related Indenture and available therefor, to pay the principal of, and the redemption premium (if any) and the interest on, the Bonds issued under such Indenture as the same become due pursuant to the terms of such Indenture, as follows:
(i) On or prior to each date upon which interest on any of the Bonds is payable under the Indenture relating to such Bonds, a sum that will be equal to the interest on such Bonds coming due on such dates;
(ii) On or prior to any redemption date, or any date on which payment is accelerated, for any of the Bonds, a sum equal to the principal of, and the redemption premium (if any) and the interest on, the Bonds that are to be redeemed or accelerated on such date; and
(iii) On or prior to the date or dates on which principal of outstanding Bonds issued under any Indenture is due and payable, a sum that will be equal to the principal amount of such Bonds coming due on such date.
If the Company defaults in any payment required by this paragraph (a), the Company will pay interest (to the extent allowed by law) on such amount until paid at the rate provided for in the Bonds on which such amount is payable.
(b) In furtherance of the foregoing, so long as any Bonds are outstanding the Company will pay all amounts required to prevent any deficiency by an act or failure to act by any Trustee, the Company, the Issuer, any Tender Agent or any other person.
(c) The Company will also pay: (i) the fees of the Trustees for
rendering Ordinary Services and the Ordinary Expenses of the Trustees and
any Paying Agents under the Indentures, such fees and expenses to be paid
directly to the Trustees or Paying Agents for their respective accounts as
and when such fees and expenses become due and payable, (ii) any fees for
Extraordinary Services and the Extraordinary Expenses of the Trustees and
(iii) any expenses in connection with any redemption of Bonds. The Company
may, without constituting grounds for an Event of Default hereunder,
withhold payment of any fees for Ordinary Services and Extraordinary
Services and Ordinary Expenses and Extraordinary Expenses to contest in
good faith the necessity of the same or to contest in good faith the
necessity for any services performed and expenses paid or incurred by any
Paying Agent.
(d) In addition to the payments required to be made by the Company pursuant to paragraph (a) above, the Company shall pay to the Trustees amounts sufficient to pay, on or prior to each day on which a payment of purchase price of a Bond that has been tendered shall become due, an amount that will enable the applicable Trustee or Tender Agent, as the case may be, to make such payment in full in a timely manner. All such payments shall be made to such Trustee at its principal corporate trust office or to such Tender Agent at its principal office, as the case may be, in lawful money of the United States of America.
(e) The Company need not pay any amount paid to Bondholders from the proceeds of a draw on any Credit Facility.
(f) The Company need not pay any amount required to be paid by paragraph (d) above to the extent of any amount paid to Bondholders from the proceeds of a remarketing of Bonds in accordance with the applicable provisions of the Indentures.
Section 5.4 Obligation of the Company Unconditional. The obligation of the Company to make the rental payments and payments of purchase price as provided in Section 5.3 and to perform and observe the other agreements on its part contained herein shall be absolute and unconditional notwithstanding any change in the tax or other laws of the United States of America or of the State or any political subdivision of either thereof or any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement. Nothing contained in this Section 5.4 shall be construed to release the Issuer from the performance of any of the agreements on its part herein contained; and, in the event the Issuer should fail to perform any such agreement on its part, the Company may institute such action against the Issuer as the Company may deem necessary to compel performance or recover its damages for nonperformance so long as such action does not violate the agreements on the part of the Company contained in the preceding sentence, but in no event shall the Company be entitled to any diminution of the amounts payable as provided in Section 5.3 hereof.
Section 5.5 Assignment and Pledge of Rental Payments and the Agreement. Under each Indenture the Issuer shall assign to the applicable Trustee as security for the Bonds issued under such Indenture all rights, title and interest of the Issuer in and to (i) "Revenues" (as defined in such Indenture) relating to the Bonds issued under such Indenture, (ii) this Agreement insofar as it relates to all Bonds issued and outstanding under such Indenture (except for the Issuer's rights providing that notices, approvals, consent, requests and other communications be given to the Issuer and the Issuer's rights under Sections 6.3, 6.4 and 10.3 hereof) and (iii) all amounts on deposit from time to time in the applicable Project Fund and the applicable Bond Fund. The Company assents to such assignment and hereby agrees that, as to the Trustee, its obligations to make such payments shall be absolute and shall not be subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach by the Issuer or the Trustee of any obligation to the Company, whether hereunder or otherwise, or out of any indebtedness or liability at any time owing to the Company by the Issuer or the Trustee.
Section 5.6 Purchase of Bonds. The Issuer, with the consent of the Company, has set forth in Section 3.01 of the Series 1998A Indenture the terms and conditions relating to the purchase of Series 1998A Bonds and has set forth in Article XII of the Series 1998A Indenture the duties and responsibilities of the Series 1998A Tender Agent with respect to the purchase of Series 1998A Bonds and of the Series 1998A Remarketing Agent with respect to the remarketing of Series 1998A Bonds. The Company approves the appointment by the Issuer of J.P. Morgan Securities Inc. as the initial Series 1998A Remarketing Agent and Citibank, N.A. as the initial Series 1998A Tender Agent and hereby authorizes and directs the Series 1998A Tender Agent and the Series 1998A Remarketing Agent to purchase, offer, sell and deliver Series 1998A Bonds in accordance with the provisions of Section 3.01 and Article XII of the Series 1998A Indenture. The Issuer acknowledges that the Series 1998A Remarketing Agent, in undertaking its duties set forth in the Series 1998A Indenture with respect to the determination of the interest rates borne by the Series 1998A Bonds, will be acting as agent for and on behalf of the Issuer. The Issuer shall have no obligation or responsibility, financial or otherwise, with respect to the purchase or remarketing of Series 1998A Bonds or the making or continuation of arrangements therefor, except that the Issuer shall generally cooperate with the Company, the Series 1998A Trustee, the Series
1998A Tender Agent and the Series 1998A Remarketing Agent as contemplated in Article XII of the Series 1998A Indenture.
Section 5.7 Mandatory Purchase of Bonds. The Company, at any time and from time to time, shall furnish moneys to the Series 1998A Tender Agent accompanied by a notice directing that such moneys be applied to the purchase of Series 1998A Bonds to be purchased upon mandatory tender for purchase pursuant to Section 3.03 of the Series 1998A Indenture. Series 1998A Bonds so purchased shall be delivered in accordance with Section 3.06 of the Series 1998A Indenture.
Section 5.8 Determination of Interest Rate Periods. The Company may determine the duration and type of the Interest Rate Periods (as defined in the Series 1998A Indenture) as, and to the extent, set forth in Section 2.02 of the Series 1998A Indenture.
ARTICLE VI
SPECIAL COVENANTS
Section 6.1 Use of Project. The Issuer hereby acknowledges that the Company shall have singular and exclusive right to the use of the Project. The Company hereby agrees that so long as the Project is operated, it shall be operated as sewage or solid waste disposal facilities within the meaning of Sections 142(a)(5) and 142(a)(6) of the Code. The Issuer makes no warranty, either express or implied, as to the Project or that the Project will be suitable for the Company's purposes.
Section 6.2 Use of Proceeds. The Company hereby covenants that at least 95% of the total proceeds of the sale of the Bonds will be used to pay Costs of Construction of the Project which constitute Exempt Costs and that all of the Net Proceeds of the Bonds deposited within the Project Funds pursuant to the Indentures will be used to pay the Cost of Construction of the Project.
In addition, the Company covenants with the Issuer, for the benefit of the Tax-Exempt Bondholders, that the proceeds of the Bonds will not be used in any manner that would result in the loss of the exclusion from gross income of the interest on the Tax-Exempt Bonds for federal income tax purposes.
Section 6.3 Indemnity Against Claims. The Company also will pay and
discharge and will indemnify and hold harmless the Issuer and the members,
officers, agents and employees of the Issuer from (a) any condition of the
Project caused by the Company, (b) any liens, taxes, assessments, impositions
and other charges upon payments by the Company to the Issuer hereunder, (c) any
breach or default on the part of the Company in the performance of any of its
obligations hereunder, (d) any act of negligence of the Company or of its
agents, contractors, servants, employees or licensees, (e) any act of negligence
of any assignee or sublessee of the Company, or of any agents, contractors,
servants, employees or licensees of any assignee or sublessee of the Company and
(f) any and all liability, damages, costs and expenses arising out of or
resulting from the acquisition, construction and installation of the Project or
the use or operation of the Project or any other activity carried out thereon or
in connection therewith or the transactions contemplated by this Agreement and
the Indentures, including the reasonable fees and expenses of counsel, except as
the same may arise out of the negligence or misconduct on the part of the
Issuer. If any such lien or charge is sought to be imposed upon payments, or
any such taxes, assessments, impositions or other charges are sought to be
imposed, or any such liability, damages, costs and expenses are sought to be
imposed, the Issuer will give prompt notice to the Company, and the Company
shall have the sole right and duty to assume, and will assume, the defense
thereof, with full power to litigate, compromise or settle the same in its sole
discretion. The indemnification provided by this Section 6.3 shall survive the
termination of this Agreement.
The Company agrees to indemnify each Trustee, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the Indenture to which such Trustee is a party, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties thereunder or hereunder.
Section 6.4 Inspection of the Project. The Company agrees that the Issuer and its duly authorized agents at reasonable times, and with the written consent of the Company which shall not be unreasonably withheld, may enter upon the Project Site and examine and inspect the Project and the books and records of the Company with respect to the Project.
Section 6.5 Company to Maintain Its Corporate Existence; Conditions Under Which Exceptions Permitted. The Company will maintain its corporate existence, will continue to be a corporation in good standing under the laws of the State, will not dissolve or otherwise dispose of all or substantially all of its assets and will consolidate with or merge into another legal entity or permit one or more other legal entities (other than one or more subsidiaries of the Company) to consolidate with or merge into it, or sell or otherwise transfer to another legal entity all or substantially all its assets as an entirety and dissolve, only if (a) the surviving, resulting or transferee legal entity is organized and existing under the laws of the United States, a state thereof or the District of Columbia, is solvent, is qualified to do business in the State as a foreign corporation and (if not the Company) assumes in writing all the obligations of the Company under this Agreement and (b) the Company or the surviving entity is not immediately after such merger, consolidation or transfer in default in any material respect under this Agreement.
Section 6.6 Ownership; Further Assurances and Corrective Instruments. The Issuer covenants that it lawfully owns and is lawfully possessed of the Project Land, that it has good and marketable fee simple title therein and thereto and that it has or will acquire good and marketable fee simple title to the Project and that it will defend said title and every part thereof against the claims of all persons whomsoever. The Issuer and the Company agree that they will, from time to time execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project and for carrying out the intention or facilitating the performance of this Agreement.
Section 6.7 Maintenance of Project by Company.
(a) The Company agrees that during the Lease Term, it will pay all costs of operating, maintaining and repairing the Project; provided, that nothing in this Section 6.7 will require the Company to maintain, operate or repair the Project if, in the sole judgment of the Company, the Company determines that operation of the Project or the manufacturing facilities the Project is designed to serve is impossible, impracticable or uneconomic.
(b) The Company may, from time to time, in its sole discretion and at its own expense, make any additions, modifications or improvements to the Project, including installation of additional machinery, equipment, and related property, which it may deem desirable for its business purposes; provided that all such additions, modifications and improvements do not adversely affect the use of the Project as sewage or solid waste disposal facilities. All machinery, equipment and related personal property so installed by the Company shall not be subject to this Agreement or the liens of the Indentures but shall be subject to the landlord's lien created under the Code of
Alabama, 1975, Section 35-9-60. All such machinery, equipment and related property so installed by the Company may be modified or removed at any time while there exists no Event of Default hereunder; provided, that any damage to the Project occasioned by such modification or removal shall be repaired by the Company at its own expense.
(c) The Company shall not permit any mechanics', materialmen's, suppliers', vendors' or other similar lien to be established or remain against the Project for labor or materials furnished or services rendered in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that if the Company shall first notify the Trustee of its intention so to do, the Company may in good faith contest any mechanics', materialmen's, suppliers', vendors' or other similar lien filed or established against the Project, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the Issuer or the Trustees notify the Company that by nonpayment of any such items, the lien or security interests afforded by this Agreement or as to any part of the Project or the payments to be made pursuant to the Agreement or the Revenues will be materially endangered or the Project or any part thereof or the payments to be made pursuant to the Agreement or the Revenues will be subject to loss or forfeiture, in which event the Company shall promptly pay and cause to be satisfied and discharged all such unpaid items. The Issuer will cooperate fully with the Company in any such contest.
Section 6.8 Redemption or Purchase of Bonds. The Issuer shall not cause the redemption or purchase of any Bonds except upon the direction of the Company. The Issuer shall take all steps then necessary under the applicable provisions of the applicable Indentures for the redemption or purchase of Bonds upon receipt by the Issuer and the applicable Trustee from the Company of a written notice specifying:
(a) the principal amount of Bonds to be redeemed or purchased;
(b) the date of such redemption or purchase; and
(c) in the case of a redemption of Bonds, directions to mail a notice of redemption in accordance with Section 8.04 of the Series 1998A Indenture or the applicable provisions of the appropriate Subsequent Indentures or in the case of a purchase of Bonds, directions to mail a notice of mandatory tender for purchase in accordance with Section 3.03(g) of the Series 1998A Indenture or the applicable provisions of the appropriate Subsequent Indentures.
Section 6.9 Investment of Bond Fund and Project Fund Moneys Permitted. Any moneys held in the Bond Funds or the Project Funds shall be invested or reinvested by the Trustee upon the request and direction of the Company in Government Obligations and Permitted Investments, respectively. All such directions by the Company shall be in compliance with applicable laws of the State. All investments of moneys in the Bond Funds and the Project Funds shall be made upon telephonic direction of an Authorized Company Representative which shall be promptly confirmed in writing and shall mature in such amounts and at such times as may be necessary to provide funds when needed to make payments from the Bond Funds or the Project Funds. The Trustee may make any and all such investments through its own bond department. Any interest or gain received from such investments shall be credited to and held in the applicable Bond Fund or Project Fund, respectively, and any loss from such investments shall be charged against the applicable Bond Fund or Project Fund, respectively.
Section 6.10 Non-Arbitrage Covenant.
(a) The Company and the Issuer each covenants to the owners of the Tax-Exempt Bonds that, notwithstanding any other provision of this Agreement or any other instruments, it shall take no action, nor shall the Company direct any Trustee to take or approve any Trustee taking any action or direct any Trustee to make or approve any Trustee making any investment or use of proceeds of the Tax-Exempt Bonds or any other moneys which may arise out of or in connection with, this Agreement, the Indentures or the Project, which would cause the Tax-Exempt Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Code. In addition, the Company covenants and agrees to comply with the requirements of Section 148(f) of the Code as it may be applicable to the Tax-Exempt Bonds or the proceeds derived from the sale of the Tax-Exempt Bonds or any other moneys which may arise out of or in connection with this Agreement, the Indentures or the Project throughout the term of the Tax-Exempt Bonds.
(b) The Company will determine the amount of the required arbitrage rebate, if any, payable to the United States Government under Section 148 of the Code should gross proceeds (within the meaning of Section 148(f) of the Code) arise; unless the required payment is to be paid directly by the Company to the United States Government, the Company shall deposit the amount of any such required arbitrage rebate into the appropriate account established for the deposit of such rebate under the applicable Indenture and shall make any required payment, in the amounts and at the times required by Section 148(f) of the Code and applicable Treasury Regulations, regardless of whether there are any remaining proceeds or other funds attributable to the Tax-Exempt Bonds that are available for the purpose of the Tax-Exempt Bonds. The Company will not permit the amount of gross proceeds invested in any Bond year applicable to any Tax-Exempt Bonds at a yield materially higher than the Bond yield on such Tax-Exempt Bonds to exceed the limits set forth in Section 148 of the Code.
(c) No provision of this Agreement shall be construed to impose upon the Trustees any obligation or responsibility for compliance with arbitrage regulations.
Section 6.11 Removal and Substitution of Portions of Project. The Issuer shall not be under any obligation to renew, repair or replace any inadequate, obsolete, worn out, unsuitable, undesirable, inappropriate or unnecessary items comprising the Project. If the Company, in its sole discretion, determines that any such items have become inadequate, obsolete, worn out, unsuitable, undesirable, inappropriate or unnecessary for its purposes at such time, the Company may, without any responsibility or accountability to the Issuer or the Trustees therefor, remove such items from the Project Site and (on behalf of the Issuer) sell, trade in, or otherwise dispose of them (as a whole or in part) provided that the Company shall either:
(a) substitute (either by direct payment of the costs thereof or by advancing to the Issuer the moneys necessary therefor) and install other machinery, equipment or related property having equal or greater utility (but not necessarily having the same function or value) in the operation of the Project as a sewage or solid waste disposal facility (provided such removal and substitution shall not impair operating unity), all of which substituted machinery, equipment or related property shall become a part of the Project; or
(b) not make any such substitution and installation, provided that
(i) in the case of the sale of any such machinery, equipment or related
property to anyone other than itself or in the case of the scrapping
thereof, the Company shall pay into the Bond Funds the greater
of the proceeds from such sale, the scrap value thereof or the original cost thereof less depreciation in accordance with generally accepted accounting principles, as the case may be, (ii) in the case of the trade-in of such machinery, equipment or related property for other machinery, equipment or related property not to be installed as a part of the Project, the Company shall pay into the Bond Funds the amount of the greater of the credit received by it in such trade-in or the original cost thereof less depreciation in accordance with generally accepted accounting principles, and (iii) in the case of the sale of any such machinery, equipment or related property to the Company or in the case of any other disposition thereof, the Company shall pay into the Bond Funds an amount equal to the original cost thereof less depreciation at rates calculated in accordance with generally accepted accounting principles.
The removal of any portion of the Project pursuant to the provisions of this
Section 6.11 shall not entitle the Company to any diminution in or postponement
or abatement of the rents payable under Section 5.3.
The Company promptly shall report to the Trustees each such removal,
substitution, sale, trade-in or other disposition which, together with other
prior unreported dispositions, in the aggregate results in proceeds under this
Section 6.11 of $5,000,000 or more and shall pay to the Trustees such amounts as
are required by the provisions of the preceding subsection (b) of this Section
6.11 to be paid into the Bond Funds promptly after the sale, trade-in or other
disposition requiring such payment. The Company shall not remove or permit the
removal of any item constituting the Project except in accordance with the
provisions of this Section 6.11.
The Company shall deliver to the Issuer appropriate documents conveying to the Issuer title to any machinery, equipment or related property installed or placed at the Project Site pursuant to this Section 6.11, and upon the request of the Company, the Issuer shall deliver, and cause or direct the Trustee to deliver, to the Company appropriate documents conveying to the Company title to any property removed from the Project Site pursuant to this Section 6.11.
Section 6.12 Taxes, Other Governmental Charges and Utility Charges. The Company agrees to pay and discharge all lawful real estate taxes, personal property taxes, water charges, sewer charges, assessments (including, but not limited to, special assessments for public improvements or benefits for which the Company would have otherwise have been liable had it in fact been the owner of the Project) and all other lawful governmental taxes, impositions and charges of every kind and nature, ordinary and extraordinary, general or special, foreseen or unforeseen, whether similar or dissimilar to any of the foregoing, and all applicable interest and penalties thereon, if any, which at any time during the term of this Agreement shall be or become due and payable by the Issuer or the Company and which shall be lawfully levied, assessed or imposed:
(a) upon or with respect to, or shall be or become liens upon, the Project or any portion thereof or any interest of the Issuer or the Company therein or under this Agreement;
(b) upon or with respect to the income or profits of the Issuer from the Project or under this Agreement;
(c) upon or with respect to the possession, operation, management, maintenance, alterations, repair, rebuilding, use or occupancy of the Project or any portion thereof; or
(d) upon this transaction or any document to which the Issuer or the Company is a party creating or transferring an interest or an estate in the Project;
under or by virtue of any present or future law, statute, ordinance, regulation or other requirement of any governmental authority, whether federal, state, county, city, municipal, school or otherwise.
The Company shall, at its sole cost and expense, procure or cause to be procured any and all necessary building permits, other permits, licenses and other authorizations required for the lawful and proper construction, use, occupation, operation and management of the Project. The Company also agrees to pay or cause to be paid all lawful charges (subject to the right of the Company to contest any such charges) for gas, water, sewer, electricity, light, heat, power, telephone and other utility and service used, rendered or supplied to, upon or in connection with the Project and the Issuer will cooperate with the Company in securing such permits, licenses and authorizations.
The Company may, at its own expense and in its own name and behalf or in the name and behalf of the Issuer, in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assessments and other charges so contested to remain unpaid during the period of such contest and any appeal therefrom. The Issuer shall cooperate fully with the Company in any such contest. If the Company fails to pay any of the foregoing items required by this Section 6.12 to be paid by the Company, the Issuer or any Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by the Issuer or any Trustee shall become an additional obligation of the Company to the one making the advancement, which amounts, together with interest thereon at the lowest rate of interest borne by the Bonds from the date thereof, the Company agrees to pay.
Section 6.13 Insurance Required. Throughout the Lease Term the Company shall keep the Project continuously insured against such risks as are customarily insured against by businesses of like size and type (other than business interruption insurance), paying as the same become due all premiums in respect thereto. Notwithstanding the foregoing, the Company may elect to self- insure.
Section 6.14 Application of Net Proceeds of Insurance. The Net Proceeds of the insurance carried pursuant to the provisions of Section 6.13 shall be applied as follows: (i) Net Proceeds of property and casualty insurance shall be applied as provided in Section 7.1, and (ii) Net Proceeds of liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds may be paid.
Section 6.15 Additional Provisions Respecting Insurance. All insurance, if any, required in Section 6.13 shall be taken out and maintained in insurance companies selected by the Company and may be written with deductible amounts comparable to those on similar policies carried by other companies engaged in businesses similar in size and type and other respects as the Company. The insurance hereby required, if any, may be contained in blanket policies now or hereafter maintained by the Company.
Section 6.16 Granting of Easements. If no Event of Default has occurred and is continuing, the Company at any time or times may cause to be granted easements (including party wall agreements), licenses, rights-of-way (temporary or perpetual and including the dedication of public highways) and other rights or privileges in the nature of easements with respect to any property included in the Project and such grant will be free from any lien or security interest created by this Agreement, or the Company may cause to be released existing easements, licenses, rights-of-way and other rights or privileges in the nature of easements, held with respect to any property included in the Project with or without consideration and the Issuer agrees that it shall execute and deliver and will cause and direct the Trustees to execute and deliver any instrument necessary or appropriate to confirm and
grant or release any such easement, license, right-of-way or other right or privilege upon receipt of:
(a) a copy of the instrument of grant or release, and
(b) a written application signed by the president or any vice president of the Company requesting the execution and delivery of such instrument and stating
(i) that such grant or release is not detrimental to the proper conduct of the business of the Company, and
(ii) that such grant or release will not impair the effective use or interfere with the operation of the Project.
Section 6.17 Release of Certain Land. Notwithstanding any other provision hereof, the parties hereto reserve the right to amend this Agreement at any time and from time to time by mutual agreement for the purpose of effecting the release of and removal of:
(a) any unimproved part of the Project Land (on which none of the components comprising the Project is located but on which parking, transportation or utility facilities may be located) on which the Issuer proposes to construct improvements for lease or sale under another and different agreement, or
(b) any part of the Project Land with respect to which the Issuer proposes to grant an easement or convey a fee, interest or other title to a railroad or other public or private carrier or to any public utility or public body in order that transportation facilities or services by rail, water, road or other means or utility services for the Project may be provided, increased or improved;
provided that if at the time any such amendment is made any of the Bonds are outstanding, there shall be deposited with the Trustees the following:
(i) a copy of such amendment as executed;
(ii) a resolution of the Issuer (A) stating that the Issuer is not in default under any of the provisions hereof or any of the Indentures and that the Company is not to the knowledge of the Issuer in default under any of the provisions hereof, (B) giving an adequate legal description of that portion of the Project Land to be released, (C) stating the purpose for which the Issuer desires the release, (D) stating that the improvements which will be constructed or the facilities and service which will be provided, increased or improved will be such as will promote at least one of the public purposes of the Issuer and (E) requesting such release;
(iii) a certificate of any officer of the Company approving such amendment together with an officer's certificate stating that the Company is not in default under any of the provisions hereof;
(iv) a copy of the agreement between the Issuer and such person wherein the Issuer agrees to construct improvements on the portion of the Project Land so requested to be released and agrees to lease or sell the same to such person, and wherein such person agrees to lease or purchase the same from the Issuer, or a copy of the instrument granting the easement or conveying the title or other interest to a railroad, public utility or public body; and
(v) a certificate of an Authorized Company Representative dated not more than 60 days prior to the date of such amendment and stating
that, in the opinion of the person signing such certificate, (A) the portion of the Project Land so proposed to be released is necessary or desirable for railroad, utility services or roads to benefit the Project or is not otherwise needed for the operation of the Project for the purposes hereinabove stated, and (B) the release so proposed to be made will not impair the usefulness of the Project as a facility of a type which the Issuer is authorized to acquire under the laws pursuant to which the Issuer then exists, and will not destroy the means of ingress thereto and egress therefrom.
No release effected under this Section 6.17 shall entitle the Company to any diminution in or postponement or abatement of the rents payable under Section 5.3.
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 Damage and Destruction. Unless the Company has elected to exercise its option to prepay all rentals or purchase the Project pursuant to the provisions of Section 8.4, if prior to payment in full of the Bonds the Project is destroyed (in whole or in part) or is damaged by fire or other casualty, the Company, or the Issuer at the Company's direction, (i) shall promptly replace, repair, rebuild or restore the property damaged or destroyed in a manner that provides facilities generally comparable to the facilities as existed prior to the event causing such damage or destruction, with such changes, alterations and modifications (including the substitution and addition of other property) as may be desired by the Company and as will not impair the operation of the Project as sewage and solid waste disposal facilities, and (ii) shall apply for such purpose so much as may be necessary of any Net Proceeds of insurance resulting from claims for such losses, as well as any additional moneys of the Company necessary therefor. All Net Proceeds of insurance resulting from claims for such losses shall be paid to the Company. If such Net Proceeds are not sufficient to pay in full the costs of such replacement, repair, rebuilding or restoration, the Company nonetheless shall complete the work thereof and shall pay that portion of the costs thereof in excess of the amount of such Net Proceeds. The Company shall not, by reason of the payment of such excess costs, be entitled to any reimbursement from the Issuer or any abatement, diminution or postponement of the amounts payable under Section 5.3.
Section 7.2 Condemnation. Unless the Company exercises its option to prepay all rentals or purchase the Project pursuant to the provisions of Section 8.4, if the title in and to, or the temporary use of, the Project or any part thereof is taken under the exercise of the power of eminent domain by any governmental body or by any other person acting under governmental authority, the Company shall be obligated to continue to pay the rents specified in Section 5.3. The Issuer and the Company shall cause the Net Proceeds received by them or any of them, from any award made in such eminent domain proceeding, to be paid to and held by the Company and applied in one or more of the following ways:
(a) the restoration of the Project to substantially the same condition as existed prior to the exercise of such power of eminent domain;
(b) the acquisition, by construction or otherwise, of other sewage or solid waste disposal facilities suitable for the Company's operations at the Project Site (which sewage or solid waste disposal facilities will be deemed a part of the Project and available for use by the Company and will be leased to the Company hereunder without the payment of any rents other than herein provided to the same extent as if such other improvements were specifically described herein); provided, that such sewage or solid waste disposal facilities will be acquired
subject to no liens, security interests or encumbrances prior to the liens or security interests afforded by this Agreement and the Indentures, other than Permitted Encumbrances;
(c) redemption of the Bonds in accordance with the provisions of Article VIII of the Series 1998A Indenture or the applicable provisions of any Subsequent Indenture; provided, that no part of any such condemnation award may be applied for such redemption unless (1) all of the Bonds are to be redeemed in accordance with the Indentures upon exercise of the option to purchase the Project pursuant to the provisions of Section 8.01(a) of the Series 1998A Indenture and the applicable provisions of the Subsequent Indentures, if any, or (2) if less than all of the Bonds are to be redeemed as directed by the Company, the Company furnishes to the Issuer and the Trustees a certificate of the Authorized Company Representative stating (i) that the property forming a part of the Project that was taken in such eminent domain proceeding is not essential to the Company's use or occupancy of the Project, (ii) that the Project has been restored to a condition substantially equivalent to its condition prior to the taking in such eminent domain proceeding, or (iii) that sewage or solid waste disposal facilities have been acquired that are suitable for the Company's operations at the Project as contemplated by the foregoing subsection (b) of this Section 7.2; or
(d) payment into the Bond Funds of an amount sufficient to provide for payment in full of the Bonds.
The Issuer shall cooperate fully with the Company in the handling and conduct of any prospective or pending eminent domain proceeding with respect to the Project or any part thereof and shall, to the extent it may lawfully do so, permit the Company to litigate in any such proceeding in the name and on behalf of the Issuer. In no event will the Issuer voluntarily settle, or consent to the settlement of, any prospective or pending eminent domain proceeding with respect to the Project or any part thereof without the written consent of the Company.
Section 7.3 Condemnation of Company-Owned Property. The Company shall be entitled to the proceeds of any condemnation award or portion thereof made for damages to or taking of its own property or for damages on account of the taking of or interference with the Company's rights to possession, use or occupancy of the Project.
ARTICLE VIII
ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT;
OPTION AND OBLIGATION TO PURCHASE PROJECT;
OPTION TO EXTEND TERM OF AGREEMENT
Section 8.1 Assignment and Subleasing. This Agreement may be assigned by the Company and the Project may be subleased by the Company without the necessity of obtaining the consent of the Issuer or the Trustees, subject, however, to the following conditions:
(a) no assignment (other than pursuant to Section 6.5) or sublease shall relieve the Company from primary liability for any of its obligations hereunder, and if any such assignment occurs, the Company shall continue to remain primarily liable for the payment of the rents specified in Section 5.3 and for performance and observance of the other agreements on its part herein provided to be performed and observed by it; and
(b) the Company shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Issuer and to the Trustees a
true and complete copy of each such assignment or sublease, as the case may be, together with any instrument of assumption.
Section 8.2 Pledge Under Indenture. Under the terms of each Indenture, the Issuer shall assign and create a security interest with respect to its interest in, and pledge all rents, revenues and receipts arising out of or in connection with its ownership of, the Project to the Trustee under that Indenture, all as security for the payment of the principal of and interest on the Bonds issued under such Indenture, but each Indenture and such assignment and pledge shall be subject and subordinate to this Agreement.
Section 8.3 Restrictions on Sale of Project by Issuer. The Issuer agrees that, except as set forth in Section 8.2, it shall not (a) sell, assign, transfer or convey the Project during the Lease Term, (b) create or suffer to be created any assignment, pledge, charge, lien or encumbrance on any Trust Estate, or (c) take any other action which might reasonably be construed as tending to cause or induce the levy or assessment of ad valorem taxes on the Project or on its title in and to the Project. If the laws of the State at the time permit such action to be taken, nothing contained in this Section 8.3 shall prevent the consolidation of the Issuer with, or the merger of the Issuer into, or the transfer of the Project as an entirety to, any public corporation whose property and income are not subject to taxation and which has corporate authority to carry on the business of owning and leasing the Project; provided (i) that no such action shall be taken without the prior written consent of the Company, unless such action shall be required by law, and (ii) that upon any such consolidation, merger or transfer, the due and punctual payment of the principal of and the interest on the Bonds, and the due and punctual performance and observance of all the agreements hereof to be kept and performed by the Issuer, shall be expressly assumed in writing by the corporation resulting from such consolidation or surviving such merger or to which the Project shall be transferred as an entirety.
Section 8.4 Prepayment of Rents; Option to Purchase Project; Obligation to Purchase Project.
(a) The Company shall have the option to prepay any part of the rents payable under Section 5.3, and the Issuer agrees that the Trustees may accept such prepayment when the same is tendered by the Company, upon giving written notice to the Trustees at least four Business Days prior to the thirtieth day before the date set for redemption, to the extent that the Bonds are subject to optional redemption in part pursuant to Section 8.01(a) of the Series 1998A Indenture or the applicable provisions of any Subsequent Indenture.
(b) The Company shall have the option to purchase the Project by prepaying all of the rents payable under Section 5.3, and the Issuer agrees that the Trustees may accept such prepayment when the same is tendered by the Company, upon giving written notice to the Trustees at least four Business Days prior to the thirtieth day before the date set for redemption, to the extent that the Bonds are subject to optional redemption in whole pursuant to Section 8.01(a) of the Series 1998A Indenture and the applicable provisions of any Subsequent Indenture.
(c) The Company shall be obligated to prepay a portion of the rentals payable under Section 5.3, and the Issuer agrees that the Trustees may accept such prepayment when the same is tendered by the Company, to the extent that the Bonds are subject to mandatory redemption in part pursuant to the applicable provisions of any Subsequent Indenture following the receipt by the Company of written notice by a Bondholder or a former Bondholder or from the Internal Revenue Service or the applicable Trustee of a final determination of the Internal Revenue Service or of a court of competent jurisdiction to the effect that, as a result of a failure by the Company to observe or perform any covenant, agreement, representation or warranty in this
Agreement the interest paid or payable on any Bond to other than a "Substantial User" of the Project or a "related person" (within the meaning of Section 147(a) of the Code) is or was includable in the gross income of the owner thereof for federal income tax purposes under the Code.
(d) The Company shall be obligated to purchase the Project by prepaying all of the rents payable under Section 5.3, or to prepay all of the rents payable under Section 5.3 without purchasing the Project, and the Issuer agrees that the Trustees may accept such prepayment when the same is tendered by the Company, to the extent that the Bonds are subject to mandatory redemption in whole pursuant to the applicable provisions of any Subsequent Indenture following the receipt by the Company of written notice by a Bondholder or a former Bondholder or from the Internal Revenue Service or the applicable Trustee of a final determination of the Internal Revenue Service or of a court of competent jurisdiction to the effect that, as a result of a failure by the Company to observe or perform any covenant, agreement, representation or warranty in this Agreement the interest paid or payable on any Bond to other than a "Substantial User" of the Project or a "related person" (within the meaning of Section 147(a) of the Code) is or was includable in the gross income of the owner thereof for federal income tax purposes under the Code.
(e) The Company shall have the option to purchase the Project by providing for payment of the Bonds pursuant to Article XV of the Series 1998A Indenture and the applicable provisions of any Subsequent Indenture.
(f) The Company shall be obligated to purchase, and the Issuer agrees to sell, the Project for $10.00 at the expiration of the Lease Term, following payment in full of the Bonds.
All prepaid rents shall be used for the redemption or purchase of Bonds in the
manner and to the extent provided in the Indentures. The options granted to the
Company pursuant to this Section 8.4 shall be and remain prior and superior to
the Indentures and may be exercised whether or not there exists an Event of
Default hereunder, provided that the existence of such Event of Default will not
result in nonfulfillment of any condition to the exercise of any such option.
Upon the expiration of the Lease Term, or the sooner termination of the Lease
Term, the Issuer will, upon receipt of evidence provided by the Trustees
satisfactory to it that none of the Bonds remain outstanding under the
Indentures, deliver to the Company documents conveying to the Company good and
marketable fee simple title in and to the Project, as the Project then exists,
subject to the following: (a) those liens, security interests and encumbrances
(if any) to which said title in and to the Project was subject when conveyed to
the Issuer, (b) those liens, security interests and encumbrances created by the
Company or to the creation or suffering to which the Company consented, (c)
those liens, security interests and encumbrances resulting from the failure of
the Company to perform or observe any of its agreements contained herein, and
(d) any right and title of any condemning authority.
Section 8.5 Rent Abatements If Bonds Paid Prior to Maturity. If at any time the moneys in the Bond Fund are sufficient to retire, in accordance with the terms of the Indentures, all of the outstanding Bonds and to pay all fees and charges of the Trustee due or to become due through the date on which the last of the Bonds is to be retired, under circumstances not resulting in termination of the Lease Term, and if the Company is not at the time otherwise in default hereunder, the Company shall be entitled to use and occupy the Project from the date on which such moneys are in the Bond Funds until expiration of the Agreement as set forth in Section 5.1 hereof, without the payment of rent during that interval (but otherwise on the terms and conditions hereof).
Section 8.6 References to Bonds Ineffective After Bonds Paid. Upon payment in full of the Bonds, or any issue of Bonds, and all fees and charges of the Trustees, or any Trustee for such issue of Bonds, as the case may be, all references herein to the Bonds and the Trustees, or such Trustee, shall be ineffective and neither the Trustees nor the holders of any of the Bonds, or the applicable Trustee and the holders of such issue of Bonds, as the case may be, shall thereafter have any rights hereunder saving and excepting those that have theretofore vested. Reference is hereby made to Section 15.01 of the Series 1998A Indenture and the applicable provisions of the Subsequent Indentures which set forth the conditions upon the existence or occurrence of which payment in full of the Bonds shall be deemed to have been made.
Section 8.7 Option to Extend. The Company shall have, and is hereby granted, the option to extend the term of this Agreement for an additional term ending on March 1, 2038; provided, however, that such option shall not be exercisable at any time an Event of Default has occurred and is continuing. If at the end of the Lease Term provided for in Section 5.1 hereof, no Event of Default has occurred and is continuing, the Company shall be deemed to have exercised such option to extend the term of this Agreement unless it notifies the Issuer and the Trustee in writing to the contrary at least 30 days prior to the end of such Lease Term. For and during such additional term, the Company will pay to the Issuer an annual rent of $100, payable in advance on March 1, 2033 and on each March 1 thereafter (except March 1, 2038 on which date such additional term shall end as aforesaid), but otherwise all the terms and conditions of this Agreement shall apply during such additional term; except that the provisions of Sections 7.1 and 7.2 shall not apply and except further that the Company shall not be required to carry any insurance for the benefit of the Trustees, but shall be required to carry insurance under Section 6.13 for the benefit of the Issuer as its interest may appear. In the event the Company exercises the option to extend the Lease Term granted in this Section 8.7, at any time after commencement of such additional term, it shall have the right to terminate this Agreement upon giving to the Issuer notice in writing not less than 10 days prior to the date of termination. At any time during, or at the end of, the extended Lease Term provided for in this Section 8.7, the Company may purchase the Project for $100.
ARTICLE IX
AMENDMENTS AND SUPPLEMENTS
Section 9.1 Additional Bonds. This Agreement may be amended or supplemented at any time and from time to time, without the consent of the Series 1998A Bondholders or any holders of Additional Bonds, by a Supplemental Lease authorized by a resolution of the Issuer and by the Company, to provide for the issuance of Additional Bonds issued under a Subsequent Indenture.
Section 9.2 Conveyance of Project. This Agreement may be amended at any time and from time to time, without the consent of the Series 1998A Bondholders or any holders of Additional Bonds, by an amendment authorized by a resolution of the Issuer and by the Company, to provide for the conveyance or transfer by the Issuer of all or any portion of its interest in the Project, subject to the limitations set forth in Article XIV of the Series 1998A Indenture and the applicable provisions of any Subsequent Indentures.
Section 9.3 No Other Amendments. Except as otherwise provided in Section 9.1 or 9.2, this Agreement may not be amended or supplemented except by a written agreement signed by the parties hereto, in accordance with Article XIV of the Series 1998A Indenture and the applicable provisions of any Subsequent Indentures to the extent Bondholders under each such Indenture would be affected by the proposed amendment or supplement.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default. Each of the following shall be an "Event of Default" under this Agreement:
(a) An "Event of Default" occurs and is continuing under any Indenture or under any Guarantee.
(b) Failure by the Company to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder, for a period of 90 days after written notice, specifying such failure and requesting that it be remedied, is given to the Company by the Issuer or any Trustee; provided, however, if the failure stated in the notice cannot be remedied within such period, it shall not constitute an "Event of Default" if corrective action is instituted by the Company within the applicable period and diligently pursued until the default is corrected.
(c) The Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of it or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally unable, to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, (vi) fail to controvert in a timely or appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under said Federal Bankruptcy Code, or (vii) take any action for the purpose of effecting any of the foregoing.
(d) A proceeding or case shall be commenced, without the application
or consent of the Company, in any court of competent jurisdiction, seeking
(i) the liquidation, reorganization, dissolution, winding-up, or
composition or adjustment of debts, of the Company, (ii) the appointment of
a trustee, receiver, custodian, liquidator or the like of the Company or of
all or any substantial part of any of its assets, or (iii) similar relief
in respect of the Company under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or any order, judgment or
decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 days from commencement
of such proceeding or case or the date of such order, judgment or decree,
or an order the Company shall be entered in an involuntary case under the
Federal Bankruptcy Code.
(e) The dissolution or liquidation of the Company except as may be permitted by the terms of Section 6.5.
The foregoing provisions of Section 10.1(b) are subject to the limitation that, if by reason of force majeure the Company is unable in whole or in part to carry out its agreements herein contained other than those set forth in Section 5.3 hereof, an Event of Default shall not be deemed to have occurred during the continuance of such inability. The term "force majeure" as used herein shall mean the following: acts of God; strikes; lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States or of the State or any of their departments, agencies or officials or of any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; fire; hurricanes; tornadoes; storms; floods; washouts; droughts; arrests; restraints of government and people; civil disturbances; explosions; breakage or accident to
machinery, transmission lines, pipes or canals; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Company. The Company agrees, however, to remedy to the extent practicable with all reasonable dispatch the effects of any force majeure preventing the Company from carrying out its agreements; provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Company, and the Company shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Company unfavorable to the Company.
Section 10.2 Remedies on Default. Whenever any Event of Default under
Section 10.1(a) has occurred and is continuing, the Issuer may, in addition to
any other remedy now or hereafter existing at law, in equity or by statute, take
either or both of the following remedial steps:
(a) By written notice to the Company, the Issuer may declare all amounts payable hereunder with respect to the Indenture or Guarantee under which such Event of Default has occurred to be immediately due and payable (to the extent permitted under such Indenture), whereupon the same shall become immediately due and payable;
(b) The Issuer may take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due, or, if such Event of Default applies to all Indentures or all Guarantees, to enforce performance and observance of any obligation, agreement or covenant of the Company under this Agreement.
Whenever any Event of Default under Section 10.1(b) through (e) has occurred and is continuing, the Issuer may, in addition to any other remedy now or hereafter existing at law, in equity or by statute, take either or both of the following remedial steps:
(a) By written notice to the Company, the Issuer may declare all amounts payable hereunder to be immediately due and payable (to the extent permitted under the related Indenture), whereupon the same shall become immediately due and payable;
(b) The Issuer may take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Company under this Agreement.
Any amounts collected pursuant to action taken under this Section 10.2 shall be paid into the appropriate Bond Funds and applied in accordance with the provisions of the applicable Indentures or, if the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the provisions of the Indentures) and the fees and expenses of the Trustees and the Paying Agents and all other amounts required to be paid under the Indentures have been paid, to the Company.
Section 10.3 Agreement to Pay Attorneys' Fees and Expenses. If the Company breaches any of the provisions of this Agreement and the Issuer or any Trustee employs attorneys or incurs other expenses for the collection of amounts payable hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Company herein contained, the Company agrees that on demand therefor it will pay to the Issuer or such Trustee (as the case may be) the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Issuer.
Section 10.4 No Additional Waiver Implied by One Waiver. If any agreement contained in this Agreement is breached by either party and
thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.
Section 10.5 Notice of Default. The Company shall notify the Trustees and the Issuer of any Event of Default hereunder or under the Indentures or the Guarantees promptly upon its acquiring knowledge thereof.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices. All notices, certificates or communications
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed by registered or certified mail, postage prepaid, addressed as
follows: if to the Issuer, The Industrial Development Board of the City of
Stevenson, Stevenson, Alabama 35772, Attention: Chairman; if to the Company, The
Mead Corporation, Mead World Headquarters, Courthouse Plaza Northeast, Dayton,
Ohio 45463, Attention: Treasurer; if to the Series 1998A Trustee, Citibank,
N.A., 111 Wall Street, 5/th/ Floor, New York, New York, 10043, Attention:
Corporate Agency & Trust; and if to any other Trustee, the address designated in
any Supplemental Lease as the address to which notices, certificates or other
communications given to such Trustee shall be sent. A duplicate copy of each
notice, certificate or other communication given hereunder by either the Issuer
or the Company to the other shall also be given to the Series 1998A Trustee. The
Issuer, the Company and the Series 1998A Trustee may, by notice given hereunder,
designate any further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
Section 11.2 Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon the Issuer, the Company and their respective
successors and assigns, subject, however, to the limitations contained in
Section 6.5 hereof.
Section 11.3 Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
Section 11.4 Amounts Remaining in the Bond Fund. Any amounts remaining in any Bond Fund upon termination of this Agreement, to the extent provided in the related Indenture, shall belong to and be paid to the Company by the appropriate Trustee.
Section 11.5 Termination. This Agreement may not be terminated except in accordance with the provisions hereof.
Section 11.6 Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and same instrument.
Section 11.7 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State.
Section 11.8 Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement.
Section 11.9 Recording of Agreement. This Agreement and every assignment and modification hereof shall be recorded in the Office of the Judge of Probate of Jackson County, Alabama, or in such other office as may be at the time provided by law as the proper place for such recordation.
Section 11.10 Net Lease. This Agreement shall be deemed a "net lease," and the Company shall pay absolutely net during the Lease Term the rents specified herein, without abatement, deduction or set-off other than those herein expressly provided.
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement to be executed in their respective corporate names and their respective corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the date first above written.
THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF STEVENSON
(Seal)
THE MEAD CORPORATION
(Seal)
Attest:
STATE OF ALABAMA )
): SS
COUNTY OF JACKSON )
On this 18th day of March, 1998, before me appeared Leo Smith, to me personally known, who being by me duly sworn, did say that he is Chairman of The Industrial Development Board of the City of Stevenson and that the seal affixed to the foregoing Lease Agreement is the seal of The Industrial Development Board of the City of Stevenson and that the foregoing Lease Agreement was signed and sealed on behalf of The Industrial Development Board of the City of Stevenson and the said Chairman acknowledges the execution of the foregoing Lease Agreement as the free act and deed of The Industrial Development Board of the City of Stevenson.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public
My Commission Expires: 9/12/98
[NOTARIAL SEAL]
STATE OF OHIO ) ): SS COUNTY OF MONTGOMERY ) |
On this 23rd day of March, 1998, before me appeared William B. Plummer, to me personally known, who, being by me duly sworn, did say that he is Treasurer of The Mead Corporation, an Ohio corporation, qualified to do business in the State of Alabama, and that the seal affixed to the foregoing Lease Agreement is the seal of The Mead Corporation, and that the foregoing Lease Agreement was signed and sealed on behalf of The Mead Corporation by authority of its board of directors, and the said Treasurer acknowledges the execution of the foregoing Lease Agreement as the free act and deed of The Mead Corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Mary Elizabeth Milburn ---------------------------------- Notary Public My Commission Expires: [NOTARIAL SEAL] Mary Elizabeth Milburn, Notary Public In and for the State of Ohio My Commission Expires April 10, 1998 |
EXHIBIT A
PROJECT LAND
All said portion of land and structures lying thereon, in Section 15, T2S, R8E, County of Jackson, State of Alabama, more particularly described as follows:
NO. 2 RECOVERY BOILER AREA AND CHEMICAL CONVERSION AREA
Commence at the plant grid coordinates N 10,000.00, E 10,000.00, thence S 35(degrees) 05' 22" E 482.73' to the point of beginning (N 9605.00, E 10,277.50); thence S 0(degrees) 00' 00" E 305.00', thence S 90(degrees) 00' 00" E 197.50'; thence N 0(degrees) 00' 00" E 365.00; thence N 90(degrees) 00' 00" W 105.00'; thence S 0(degrees) 00' 00" W 60.00'; thence N 90(degrees) 00' 00" W 92.50', to the point of beginning; said land being 1.53 acres; except any structures not included in Mead Corporation Contract No. 21-6817; less and except the following:
NO. 2 RECOVERY BOILER - Commence at the plant grid coordinates N 10,000.00, E 10,000.00, thence S 35(degrees) 41' 06" E 557.69' to the point of beginning (N 9,547.02 E 10,325.32); thence N 90(degrees) 00' 00" E 21.36', thence S 0(degrees) 00' 00" E 19.98', thence N 90(degrees) 00' 00" W 21.36', thence N 0(degrees) 00' 00" W 19.98', to the point of beginning; said land being 0.01 acres more or less; except any structures not included in the Mead Corporation Contract No. 21-6817.
PRECIPITATOR - Commence at the plant grid coordinates N 10,000.00, E 10,000.00; thence S 33(degrees) 14' 18" E 603.46' to the point of beginning (N 9,495.27 E 10,330.77); thence S 0(degrees) 00' 00" W 9.63', thence N 90(degrees) 00' 00" W 10.01', thence S 0(degrees) 00' 00" W 68.51', thence S 49(degrees) 30' 06" E 14.70', thence S 0(degrees) 00' 00" W 8.56', thence S 90 (degrees) 00' 00" W 10.44', thence S 0(degrees) 00' 00" W 31.00', thence N 90(degrees) 00' 00" E 22.00', thence N 0(degrees) 00' 00" E 16.87', thence N 90(degrees) 00' 00" E 31.85', thence N 0(degrees) 00' 00" E 88.61', thence N 90(degrees) 00' 00" E 4.16', thence N 0(degrees) 00' 00" E 20.00', thence N 90(degrees) 00' 00" W 20.00', thence S 0(degrees) 00' 00" W 20.00', thence S 90(degrees) 00' 00" E 4.16', thence S 0(degrees) 00' 00" W 79.35', thence S 90(degrees) 00' 00" W 20.15', thence N 0(degrees) 00' 00" W 4.87', thence N 90(degrees) 00' 00" W 3.75', thence N 0(degrees) 00' 00" W 8.30', thence N 49(degrees) 30' 37" E 15.11', thence N 0(degrees) 00' 00" E 68.51', thence N 90(degrees) 00' 00" W 10.05', thence N 0(degrees) 00' 00" E 9.66', thence N 90(degrees) 00' 00" W 10.42' to the point of beginning; said land being 0.11 acres more or less; except any structures not included in the Mead Corporation Contract No. 21-6817.
CHEMICAL CONVERSION COOLING TOWER - Commence at the plant grid coordinates N 10,000.00, E 10,000.00; thence S 49(degrees) 13' 41" E 570.43' to the point of beginning (N 9,627.48 E 10,432.00); thence S 0(degrees) 00' 00" W 41.15', thence N 90(degrees) 00' 00" E 20.17', thence N 0(degrees) 00' 00" E 41.15', thence N 90(degrees) 00' 00" W 20.17' to the point of beginning; said land being 0.02 acres more or less; except any structures not included in the Mead Corporation Contract No. 21-6817.
NO. 2 WASTE FUEL BOILER
Commence at the plant grid coordinates N 10,000.00, E 10,000.00, thence S 35(degrees) 05' 22" E 482.73' to the point of beginning (N 9605.00, E 10,277.50); thence S 0(degrees) 00' 00" W 265.00'; thence S 90(degrees) 00' 00" W 182.50'; thence N 0(degrees) 00' 00" E 248.34'; thence N 88(degrees) 35' 31" W 86.85'; thence S 73(degrees) 00' 00" W 71.00'; thence N 17(degrees) 00' 00" W 13.00'; thence N 73(degrees) 00' 00" E 73.11'; thence S 88', 35' 31" E 88.64'; thence N 0(degrees) 00' 00" E 3.65'; thence N 90(degrees) 00' 00" E 182.50', to the point of beginning; said land being 1.16 acres more or less; except any structures not included in Mead Corporation Contract No. 21-6817.
NO. 6 FUEL OIL SYSTEM
Commence at the plant grid coordinates N 10,000.00, E 10,000.00, thence S 6(degrees) 28' 59" E 664.25'; to the point of beginning (N 9,340.00, E 10,075.00); thence S 0(degrees) 00' 00" E 60.00'; thence S 90(degrees) 00' 00" E 202.50'; thence N 0(degrees) 00' 00" E 60.00'; thence N 90(degrees) 00' 00" W 202.50'; to the point of beginning; said land being 0.28 acres more or less; except any structures not included in Mead Corporation Contract No. 21-6817.
NO. 2 PRIMARY CLARIFIER
Commence at the plant grid coordinates N 10,000.00, E 10,000.00, thence S 21(degrees) 37' 29" E 753.00' to the point of beginning (N 9,300.00, E 10,277.50); thence S 0(degrees) 00' 00" E 210.00'; thence S 90(degrees) 00' 00" E 177.50'; thence N 0(degrees) 00' 00" E 210.00'; thence N 90(degrees) 00' 00" W 177.50' to the point of beginning; said land being 0.86 acres more or less; except any structures not included in Mead Corporation Contract No. 21-6817.
SECONDARY WASTE TREATMENT
Commence at the plant grid coordinates N 10,000.00, E 10,000.00, thence S 10(degrees) 47' 55" E 1868.08' to the point of beginning (N 8,165.00, E 10,350.00); thence S 0(degrees) 00' 00" E 267.00'; thence S 45(degrees) 00' 00" E 138.59'; thence S 90(degrees) 00' 00" E 247.50'; thence N 45(degrees) 00' 00" E 169.71'; thence N 90(degrees) 00' 00" E 104.50'; thence N 0(degrees) 00' 00" E 245.00'; thence N 90(degrees) 00' 00" W 570.27', to the point of beginning; said land being 4.21 acres more or less; except any structures not included in Mead Corporation Contract No. 21-6817.
CONCENTRATOR
Commence at the plant grid coordinates N 10,000.00, E 10,000.00, thence S 38(degrees) 03' 12" E 464.80' to the point of beginning (N 9,634.00, E 10,286.50); thence S 0(degrees) 00' 00" E 29.00'; thence S 90(degrees) 00' 00" E 73.78'; thence N 0(degrees) 00' 00" E 29.00'; thence N 90(degrees) 00' 00" W 74.00', to the point of beginning; said land being 0.05 acres more or less; except any structures not included in Mead Corporation Contract No. 21-6817.
WASTE FUEL STORAGE, CONVEYORS, AND TRUCK DUMPER
Commence at the plant grid coordinates N 10,000.00, E 10,000.00, thence S 49(degrees) 34' 49" W 1100.73' to the point of beginning (N 9,286.31, E 9,162.00); thence S 0(degrees) 00' 00" E 176.31'; thence 644.03', 180 degrees along an arc with a radius point at N 9,110.00, E 9,367.00; thence N 0(degrees) 00' 00" E 25.00'; thence N 90(degrees) 00' 00" E 483.00'; thence N 00 00' 00" E 160.00'; thence N 90(degrees) 00' 00" W
286.50'; thence N 26(degrees) 56' 58" E 183.57'; thence N 63(degrees) 03' 02" W 13.00'; thence S 26(degrees) 56' 58" W 199.92'; thence N 90(degrees) 00' 00" W 149.34'; thence N 2(degrees) 03' 00" W 283.87'; thence N 0(degrees) 00' 00" W 18.00'; thence N 90(degrees) 00' 00" W 20.00'; thence S 0(degrees) 00' 00" W 18.00'; thence S 2(degrees) 03' 00" E 62.04'; thence S 90(degrees) 00' 00" W 32.22'; thence S 0(degrees) 00' 00" W 23.00'; thence S 90(degrees) 00' 00" E 24.67'; thence S 2(degrees) 58' 35" E 198.96'; thence S 90(degrees) 00' 00" W 413.00', to the point of beginning; said land being 5.16 acres more or less; except any structures not included in Mead Corporation Contract No. 21-6817.
EXHIBIT B
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF STEVENSON
and
THE MEAD CORPORATION
dated as of March 1, 1998
The Bonds are being issued for the purpose of paying the costs of acquiring, constructing and installing certain sewage and solid waste disposal facilities and related facilities (the "Project"), being constructed at the corrugating medium mill (the "Mill") of The Mead Corporation (the "Company") located in Jackson County, Alabama, near the City of Stevenson.
The Project consists generally of sewage and solid waste disposal facilities, including sewage collection, treatment and disposal facilities and a chemical recovery and recycling system, including a recovery boiler, a woodwaste boiler and related wood waste handling systems.
Specific components of the Project include the following:
Chemical Recovery and Recycling System
Sitework
Recovery Boiler
Boiler feedwater, fuel oil and power
distribution systems and pipe bridges
Chemical conversion and recovery
Concentrator
Modifications to Existing Boiler
New Boiler
Sitework
Boiler
Boiler feedwater, M&A and power
distribution systems and
pipe bridges
Woodwaste Handling System
Waste Treatment System
Sitework
Primary waste treatment
Secondary waste treatment
Sludge disposal and other systems
Sludge press
EXHIBIT C
REQUISITION AND CERTIFICATION
Request No. _____ Date: ____________
TO: Citibank, N.A., as Trustee
111 Wall Street, 5/th/ Floor
New York, New York 10043
Attention: Corporate Agency & Trust
The undersigned Authorized Company Representative designated pursuant to the terms of a Lease Agreement, dated as of March 1, 1998 (the "Agreement"), by and between The Industrial Development Board of the City of Stevenson, a public corporation created and existing under the laws of the State of Alabama (the "Issuer") and The Mead Corporation, an Ohio corporation (the "Company"), hereby requests that there be paid from the "Project Fund" (herein below described) the sum of $____________ and in that connection, DOES HEREBY CERTIFY, as follows:
1. The requested payment has been properly incurred and is a proper charge against The Industrial Development Board of the City of Stevenson Project Fund -- The Mead Corporation Project, Series ________ and has not been the basis of any previous withdrawal from said Project Fund.
2. Payment should be made to:
Name:
Address or Wire Instructions:
3. The purpose and circumstances of such obligation are as follows:
4. Except with respect to amounts requested for the payment of the costs of issuance of the Bonds, payment of such obligation will not result in less than 95% of the total proceeds of the sale of the "Bonds" (defined in the Agreement) deposited with the Project Fund expended as of the date hereof having been used to pay "Exempt Costs" (as defined in the Agreement). [Applicable only to requisitions for the payment of other than Exempt Costs.]
This ____ day of __________, 19__.
THE MEAD CORPORATION
By:_______________________________________
Authorized Company Representative
Exhibit 10.xxvii
For purposes of the Plan:
(a) "Acquisition Transaction" means a transaction of the type described in Section 8 (b) (ii).
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the 1934 Act.
(c) "Board of Directors" means the Board of Directors of the Company.
(d) "Change in Composition of the Board" means an event of the type described in Section 8 (b) (iv).
(e) "Change in Control" means a transaction of the type described in
Section 8 (b) (iii).
(f) "Committee" means the committee referred to in Section 4.
(h) "Company" means The Mead Corporation; when used in the Plan with reference to employment, "Company" shall include any Subsidiary of the Company.
(i) "Designation of Beneficiary" means such person(s) or entity whom the option Holder has designated by a transfer on death or other designation of beneficiary to receive the Holder's option on the Holder's death in accordance with such procedures established from time to time by the Committee.
(j) "Fair Market Value" means the average of the highest sale price and the lowest sale price of a Share on the date the value of a Share is to be determined, as reported on the New York Stock Exchange - Composite Transactions Tape or, if no sale is reported for such date, then on the next preceding date for which a sale is reported.
(k) "Grantee" means the employee who received the option from the Company.
(l) "Holder" means the person(s) or entity who owns the option, whether Grantee, Transferee, heir or other beneficiary.
(m) "Incentive Stock Option" means an option granted under the Plan which qualifies as an incentive stock option under Section 422 of the Code.
(n) "Limited Right" means a right granted under Section 8 of the Plan.
(o) "Nonqualified Option" means an option granted under the Plan which does not qualify as an incentive stock option under Section 422 of the Code.
(p) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(q) "Share" or "Shares" means the Common Shares, without par value, of the Company.
(r) "Subsidiary" means any corporation, partnership or other person or entity at least 10% of the voting or equity interest of which is owned or controlled, directly or indirectly, by the Company.
(s) "Tender Offer" means a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14 (d) of the 1934 Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time.
(t) "Tax Date" means the date as of which the amount of the withholding tax payment with respect to the exercise of a Nonqualified Option is calculated.
(u) "Transferee" means the person who received the option from the Grantee during the Grantee's lifetime.
(v) "Person" shall have the meaning given in Section 3(a)(9) of the 1934 Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(b) The maximum number of Limited Rights which may be granted under the Plan is 8,000,000. Any Limited Rights granted under the Plan which for any reason terminate or expire or have been cancelled prior to being fully exercised may again be granted under the Plan.
The Plan shall be administered by a committee (the "Committee") of the Board of Directors, consisting of three or more directors, who shall from time to time be appointed by, and serve at the pleasure of, the Board of Directors. No director shall serve as a member of the Committee if he does not qualify as a disinterested person with respect to the Plan under Rule 16b-3 (or any successor provision) under the 1934 Act.
The Committee shall have and exercise all the power and authority granted to it under the Plan. Subject to the provisions of the Plan, the Committee shall in its sole discretion determine the persons to whom, and the
times at which, Incentive Stock Options, Nonqualified Options and Limited Rights shall be granted; the number of Shares to be subject to each option; the option price per Share; and the term of each option. In making such determinations, the Committee may take into consideration each employee's present and/or potential contribution to the success of the Company and its Subsidiaries and any other factors which the Committee may deem relevant and proper. Subject to the provisions of the Plan, the Board of Directors or the Committee shall also interpret the Plan; prescribe, amend and rescind rules and regulations relating to the Plan; correct defects, supply omissions and reconcile any inconsistencies in the Plan; and make all other determinations necessary or advisable for the administration of the Plan. The Committee or its designee may in its discretion change the terms of any Limited Right granted hereunder in connection with an Incentive Stock Option to permit the Limited Right to be exercisable even though the Fair Market Value of a Share on the date of exercise does not exceed the exercise price of the related option. Such determinations of the Board of Directors, or of the Committee (to the extent not reversed or modified by the Board of Directors), shall be conclusive. A majority of the Committee shall constitute a quorum for meetings of the Committee, and the act of a majority of the Committee at a meeting, or an act reduced to or approved in writing by all members of the Committee, shall be the act of the Committee.
From time to time during the term of the Plan, the Committee may grant one or more Incentive Stock Options and/or Nonqualified Options to any person who is then an officer or other key employee of the Company. A director who is not also an employee of the Company shall not be eligible to receive options granted under the Plan.
(1) No option may be granted under the Plan at an option price per Share which is less than the Fair Market Value of a Share on the date of grant.
(2) No option may be exercised more than ten years after the date of grant.
(3) No option shall be exercisable within one year after the date of grant. At the time an option is granted, the Committee may provide that after such one-year period, the option may be exercised with respect to all Shares subject thereto, or may be exercised with respect to only a specified number of Shares over a specified period or periods.
(4) Except as provided in Sections 6(b) (5) and 6(b) (6), an option may be exercised only if the Grantee thereof has been continuously employed by the Company since the date of grant. Whether authorized leave of absence or absence for military or governmental service shall constitute a termination of employment shall be determined by the Committee, after consideration of the provisions of Section 1.421-7(h) of the regulations issued under the Code, if appropriate.
(5) At the time an option is granted, or at such other time as the Committee may determine, the Committee may provide that, if the Grantee of the option ceases to be employed by the Company for any reason (including retirement or disability) other than death, the option will continue to be
exercisable by the Grantee for such additional period (not to exceed the remaining term of such option) after such termination of employment as the Committee may provide.
(6) At the time an option is granted, the Committee may provide that, if the Grantee of the option dies while employed by the Company or while entitled to the benefits of any additional exercise period established by the Committee with respect to such option in accordance with Section 6 (b) (5), then the option will continue to be exercisable by the person or persons (including the Holder's estate) to whom the Holder's rights with respect to such option shall have passed by will or by the laws of descent and distribution (or in accordance with the procedures set forth in Section 9 hereof) for such additional period after death (not to exceed the remaining term of such option) as the Committee may provide.
(7) At the time an option is granted, the Committee may provide for any restriction or limitation on the exercise of such option and/or for any restriction or limitation on the transferability of the Shares issuable upon the exercise of such option as it may deem appropriate.
(1) No Incentive Stock Option shall be granted to an officer or other
employee who possesses directly or indirectly (within the meaning of Section 424
(d) of the Code) at the time of grant more than 10% of the voting power of all
classes of shares of the Company or of any parent corporation or any
corporation, 50% or more of the voting stock of which is owned or controlled,
directly or indirectly, by the Company, unless the option price is at least 110%
of the Fair Market Value of the Shares subject to the option on the date the
option is granted and the option is not exercisable after the expiration of five
years from the date of grant.
(2) The aggregate Fair Market Value (determined on the date an Incentive Stock Option is granted) of Shares with respect to which Incentive Stock Options are exercisable for the first time by any individual in any calendar year (under the Plan and all of the plans of the Company and any Subsidiary and any parent corporation) shall not exceed $100,000, or such other maximum amount permitted by the Code.
Transaction, (iii) the date of filing of the Schedule 13D or shareholder authorization of the control share acquisition giving rise in either case to a Change in Control, or (iv) the date of a Change in Composition of the Board.
If a Grantee transfers a Nonqualified Option pursuant to Section 9, the Grantee is required to satisfy the applicable withholding taxes by paying cash or other property to the Company with respect to any income recognized by the Grantee on the exercise of such option by the Transferee. The Grantee's withholding obligations must be satisfied on the date that the Transferee exercises the option. If the Grantee does not satisfy the applicable withholding tax obligation, the Company shall retain from the Shares to be issued Shares having a Fair Market Value on the Tax Date equal to the mandatory withholding tax payable by the Grantee.
In connection with the exercise of an option or Limited Right, the Company has the right to require the Grantee to remit or otherwise make available to the Company an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery or transfer of any certificate or certificates for Shares (and prior to a cash payment in the case of a Limited Right) or to take whatever action it deems necessary to protect its interests with respect to tax liabilities in connection with the issuance of Shares or cash payment.
(i) during a period of 30 days following the date of expiration of a Tender Offer (other than an offer by the Company), if the offeror acquires Shares pursuant to such Tender Offer;
(ii) during a period of 30 days following the date of approval by the shareholders of the Company of a definitive agreement: (x) for the merger or consolidation of the Company into or with another corporation, if the Company will not be the surviving corporation or will become a subsidiary of another corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) at least 80% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, (y) for the merger or consolidation of the Company with another corporation, if the Company will be the surviving corporation and will not become a subsidiary of another corporation, or for the merger or consolidation of any direct or indirect subsidiary of the Company into or with another corporation, other than (in either case) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of the Company, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of the Company, either by remaining outstanding if the Company continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of the Company or surviving or parent entity outstanding immediately after such merger or consolidation, or (z) for the sale or disposition of all or substantially all of the assets of the Company (each of the foregoing transactions is hereinafter referred to as an "Acquisition Transaction");
(iii) during a period of 30 days following: (x) the date upon which the Company is provided a copy of a Schedule 13D (filed pursuant to
Section 13 (d) of the 1934 Act and the rules and regulations promulgated
thereunder) indicating that any person or group (as such terms are defined in
Section 13 (d)(3) of the 1934 Act) has become the beneficial owner (as defined
in Rule 13d-3 of the Exchange Act) of 20% or more of the outstanding voting
shares of the Company or (y) the date of authorization, by both a majority of
the voting power of the Company and a majority of the portion of such voting
power excluding the voting power of interested Shares, of a control share
acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code)
(each of the foregoing transactions is hereinafter referred to as a "Change in
Control"); and
(iv) during a period of 30 days following a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected, or were nominated for election, by the Company's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors (such a change in composition is hereinafter referred to as a "Change in Composition of the Board").
The "exercise value" of a Limited Right on the date of exercise shall be:
(i) in the case of an exercise during a period described in
Section 8 (b) (i), the highest price per Share paid pursuant to any Tender Offer
which is in effect at any time during the 60-day period prior to the date on
which the Limited Right is exercised;
(ii) in the case of an exercise during a period described in
Section 8 (b) (ii), the greater of: (x) the highest sale price of a Share during
the 30-day period prior to the date of shareholder approval of the Acquisition
Transaction, as reported on the New York Stock Exchange - Composite Transaction
Tape, or (y) the highest fixed or formula per Share price payable pursuant to
the Acquisition Transaction (if determinable on the date of exercise);
(iii) in the case of an exercise during a period described in
Section 8 (b) (iii), the greater of: (x) the highest sale price of a Share
during the 30-day period prior to the date the Company is provided with a copy
of the Schedule 13D, or the date of authorization of the control share
acquisition, as reported on the New York Stock Exchange - Composite Transactions
Tape, or (y) the highest acquisition price of a Share shown on such Schedule 13D
or to be paid in such control share acquisition; and
(iv) in the case of an exercise during a period described in
Section 8 (b) (iv), the highest sale price of a Share during the 30-day period
prior to the date of the Change in Composition of the Board, as reported on the
New York Stock Exchange - Composite Transactions Tape.
Notwithstanding the foregoing, in no event shall the exercise value of a Limited Right issued in connection with an Incentive Stock Option exceed the maximum permissible exercise value for such a right under the Code and the regulations and interpretations issued pursuant thereto. Any securities or property which form part or all of the consideration paid for Shares pursuant to a Tender Offer or Acquisition Transaction shall be valued at the higher of (1) the valuation placed on such securities or property by the person making such Tender Offer or the other party to such Acquisition Transaction, or (2) the value placed on such securities or property by the Committee.
Except as provided in this Section 9, options granted under the Plan may not be sold, pledged, assigned, hypothecated or transferred other than by Designation of Beneficiary, or, if none, then by will or the laws of descent and distribution and may be exercised during the lifetime of the Grantee only by such Grantee or by his guardian or legal representative.
Upon the death of an option Holder, outstanding options held by such Holder may be exercised only by Designation of Beneficiary, or, if none, then by the executor or administrator of the Holder's estate or by a person who shall have acquired the right to such exercise by will or by the laws of descent and distribution.
Subject to such conditions as the Committee may prescribe, during an option
Grantee's lifetime, the Committee may permit the transfer or assignment of an
outstanding option by such Grantee; provided, that such transfer or assignment
shall not apply to (y) an option which is an Incentive Stock Option (but only if
nontransferability is necessary in order for the option to qualify as an
Incentive Stock Option), and (z) an option granted to a person subject to
Section 16 of the 1934 Act (but only if nontransferability is necessary in order
for the option to qualify for the exemption under Rule 16b-3 of the 1934 Act).
In the event of a change in outstanding Shares by reason of a Share dividend, recapitalization, merger, consolidation, split-up, combination or exchange of shares, or the like, the maximum number of Shares subject to option during the existence of the Plan, the number of Limited Rights which may be granted under the Plan, the number of Shares subject to, and the option price of, each outstanding option, the number of Limited Rights outstanding, the Fair Market Value of a Share on the date a Limited Right is granted, and the like shall be appropriately adjusted by the Committee (disregarding any fractional Shares resulting therefrom), whose determination in each case shall be conclusive.
No option or Limited Right shall be granted, no option or Limited Right shall be exercised and Shares shall not be issued or delivered upon the exercise of an option unless the grant and exercise thereof, and the issuance and/or delivery of Shares pursuant thereto, or the payment therefor, shall comply with all relevant provisions of state and federal law, including, without limitation, the Securities Act of 1933, as amended, the 1934 Act, the
rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares then may be listed.
Each notice relating to this Plan shall be in writing and delivered in person or by mail to the proper address. Except as otherwise provided by the Committee, each notice shall be deemed to have been given on the date it is delivered or mailed, provided, however, that for a notice of exercise given in accordance with Section 7 (b), which shall be deemed to have been given on the date it is received by the Committee with payment of the option price. Each notice to the Committee shall be addressed as follows: The Mead Corporation, Mead World Headquarters, Courthouse Plaza Northeast, Dayton, Ohio 45463, Attention: Compensation Committee. Each notice to the Holder of an option or other person or persons then entitled to exercise an option shall be addressed to such person or persons at the Holder's address as set forth in the records of the Company. Anyone to whom a notice may be given under this Plan may designate a new address by written notice to the party to that effect.
This Plan shall inure to the benefit of and be binding upon each successor and assign of the Company. All rights and obligations imposed upon the Holder of an option and all rights granted to the Company under this Plan shall be binding upon such Holder's heirs, legal representatives and successors.
All pronouns shall be deemed to refer to the masculine, feminine, singular or plural, as the identity of the person or persons may require.
The Plan shall become effective upon its approval by the affirmative vote of the Holders of a majority of the Shares entitled to vote thereon held by shareholders present in person or by proxy at any shareholders' meeting at which a quorum is present. The Plan shall expire on January 24, 2001, unless sooner terminated in accordance with Section 12.
(1) Adopted by the Board of Directors of the Company on January 24, 1991, and approved by the Company's shareholders on April 25, 1991.
(2) Amendments to Sections 2, 7 (a), (b), (c), and 9 adopted by the Board of Directors of the Company on November 09, 1996 to permit the transfer of stock options and to allow for the designation of a beneficiary of the stock option grant.
(3) Amendments to Sections 2(b) with addition of Section 2(w); Section
6(e); Section 8(b) with addition of subsections (i), (ii), (iii), (iv) as
adopted by the Board of Directors on June 24, 1998.
(4) Administrative Amendment to Section 7(d) as adopted by the Compensation Committee of the Board of Directors on June 24, 1999.
The purposes of The Mead Corporation 1996 Stock Option Plan (the "Plan") are (i) to provide incentives to officers, other key employees and non-employee directors of the Company upon whose judgment, initiative and efforts the long- term growth and success of the Company is largely dependent; (ii) to assist the Company in attracting and retaining key employees and non-employee directors of proven ability; and (iii) to increase the identity of interests of such key employees and non-employee directors with those of the Company's shareholders by providing such employees and directors with options to acquire Shares of the Company.
For purposes of the Plan:
(a) "Acquisition Transaction" means a transaction of the type described in Section 9(b) (ii).
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the 1934 Act.
(c) "Board of Directors" or "Board" means the Board of Directors of the Company.
(d) "Change in Composition of the Board," means an event of the type described in Section 9(b) (iv).
(e) "Change in Control," means a transaction of the type described in
Section 9 (b) (iii).
(f) "Committee" means the committee referred to in Section 4.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Company" means The Mead Corporation, an Ohio corporation; when used in the Plan with reference to employment, "Company" shall include any Subsidiary of the Company.
(i) "Designation of Beneficiary" means such person(s) or entity whom the Option Holder has designated by a transfer on death or other designation of beneficiary to receive the Holder's Option on the Holder's death in accordance with such procedures established from time to time by the Committee.
(j) "Fair Market Value" means the average of the highest sale price and the lowest sale price of a Share on the date the value of a Share is to be determined, as reported on the New York Stock Exchange - Composite Transactions Tape or, if no sale is reported for such date, then on the next preceding date for which a sale is reported.
(k) "Grantee" means the employee who received the option from the Company.
(l) "Holder" means the person(s) or entity who owns the option, whether Grantee, Transferee, heir or other beneficiary.
(m) "Incentive Stock Option" means an option granted under the Plan which qualifies as an Incentive Stock Option under Section 422 of the Code.
(n) "Initial Director" means a person who is a Non-Employee Director at the date of requisite approval of this Plan by the shareholders of the Company.
(o) "Limited Right" means a right granted under Section 9 of the Plan.
(p) "Non-Employee Director" means a member of the Board who is not also an employee of the Company.
(q) "Nonqualified Option" means an option granted under the Plan which does not qualify as an Incentive Stock Option under Section 422 of the Code.
(r) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(s) "Reload Option" means a Nonqualified Option granted under Section 6(d) of the Plan.
(t) "Share" or "Shares" means shares of common stock, without par value, of the Company.
(u) "Subsequent Director" means a person who becomes a Non-Employee Director subsequent to the date of requisite approval of this Plan by the shareholders of the Company.
(v) "Subsidiary" means any corporation, partnership or other person or entity at least 10% of the voting or equity interest of which is owned or controlled, directly or indirectly, by the Company.
(w) "Tender Offer" means a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the 1934 Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time.
(x) "Tax Date" means the date as of which the amount of the withholding tax payment with respect to the exercise of a Nonqualified Option is calculated.
(y) "Transferee" means the person who received the option from the Grantee during the Grantee's lifetime.
(z) "Person" shall have the meaning given in Section 3(a)(9) of the 1934 Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
delivered under the Plan upon the exercise of options is 8,000,000. Subject to adjustment as provided in Section 11, the maximum number of Shares that may be issued and/or delivered under the Plan to any individual over the term of the Plan upon the exercise of options shall not exceed 800,000. Such Shares may be either authorized and unissued or treasury Shares. Any shares (i) subject to an option which for any reason has terminated or expired or has been cancelled prior to being fully exercised or (ii) which have been received by the Company as full or partial payment for Shares purchased pursuant to Section 8(b), may again be granted pursuant to options under the Plan.
(b) Subject to adjustment as provided in Section 11, the maximum number of Limited Rights which may be granted under the Plan is 8,000,000. Subject to adjustment as provided in Section 11, the maximum number of Limited Rights that may be granted under the Plan to any individual over the term of the Plan shall not exceed 800,000. Any Limited Rights granted under the Plan which for any reason terminate or expire or have been cancelled prior to being fully exercised may again be granted under the Plan.
The Plan shall be administered by a committee (the "Committee") of the Board of Directors, consisting of three or more directors, who shall from time to time be appointed by and serve at the pleasure of, the Board of Directors. No director shall serve as a member of the Committee if (i) he or she does not qualify as a disinterested person with respect to the Plan under Rule 16b-3 (or any successor provision) under the 1934 Act or (ii) he or she does not qualify as an outside director within the meaning of Section 162(m) of the Code.
The Committee shall have and exercise all the power and authority granted to it under the Plan. Subject to the provisions of the Plan, the Committee shall in its sole discretion determine the persons to whom, and the times at which, Incentive Stock Options, Nonqualified Options, Reload Options and Limited Rights shall be granted; the number of Shares to be subject to each option; the option price per Share; and the term of each option. In making such determinations, the Committee may take into consideration each participant's present and/or potential contribution to the success of the Company and any other factors which the Committee may deem relevant and proper. Subject to the provisions of the Plan, the Committee shall also interpret the Plan; prescribe, amend and rescind rules and regulations relating to the Plan; correct defects, supply omissions and reconcile any inconsistencies in the Plan; and make all other determinations necessary or advisable for the administration of the Plan. The Committee may in its discretion change the terms of any Limited Right granted hereunder in connection with an Incentive Stock Option to permit the Limited Right to be exercisable even though the Fair Market Value of a Share on the date of exercise does not exceed the exercise price of the related option. Such determinations of the Committee shall be conclusive. A majority of the Committee shall constitute a quorum for meetings of the Committee, and the act of a majority of the Committee at a meeting, or an act reduced to or approved in writing by all members of the Committee, shall be the act of the Committee.
From time to time during the term of the Plan, the Committee may grant one or more Incentive Stock Options, Nonqualified Options and Reload Options to any person who is then an officer or other key employee of the Company. Each Non- Employee Director shall be eligible
to receive Nonqualified Options granted under the formula provision set forth in
Section 7 of the Plan.
(1) No option may be granted under the Plan at an option price per Share which is less than the Fair Market Value of a share on the date of grant.
(2) No option may be exercised more than ten years after the date of grant.
(3) No option shall be exercisable within one year after the date of grant. At the time an option is granted, the Committee may provide that after such one year period, the option may be exercised with respect to all Shares subject thereto, or may be exercised with respect to only a specified number of Shares over a specified period or periods.
(4) Except as provided in Sections 6 (b) (5) and 6 (b) (6), an option may be exercised only if the Grantee of such option has been continuously employed by the Company since the date of grant. Whether authorized leave of absence or absence for military or governmental service shall constitute a termination of employment shall be determined by the Committee in its sole discretion.
(5) At the time an option is granted, or at such other time as the Committee may determine, the Committee may provide that, if the Grantee of the Option ceases to be employed by the Company for any reason (including retirement or disability) other than death, the option will continue to be exercisable by the Holder (including a Transferee under Section 10 hereof) for such additional period (not to exceed the remaining term of such option) after such termination of employment as the Committee may provide.
(6) At the time an option is granted, the Committee may provide that, if the Grantee of such option dies while employed by the Company or while entitled to the benefits of any additional exercise period established by the Committee with respect to such option in accordance with Section 6(b) (5), then the option will continue to be exercisable by the person or persons to whom the Grantee's rights with respect to such option shall have passed by will or by the laws of descent and distribution (or in accordance with the procedures set forth in Section 10 hereof) for such additional period after death (not to exceed the remaining term of such option) as the Committee may provide.
(7) At the time an option is granted, the Committee may provide for any restriction or limitation on the exercise of such option and/or for any restriction or limitation on the transferability of the Shares issuable upon the exercise of such option as it may deem appropriate.
Stock Options granted under the Plan, notwithstanding any provision of Section 6
(b) to the contrary:
(1) No Incentive Stock Option shall be granted to an officer or
other employee who possesses directly or indirectly (within the meaning of
Section 424(d) of the Code) at the time of grant more than 10% of the voting
power of all classes of Shares of the Company or of any parent corporation or
any corporation, 50% or more of the voting stock of which is owned or
controlled, directly or indirectly, by the Company, unless the option price is
at least 110% of the Fair Market Value of the Shares subject to the option on
the date the option is granted and the option is not exercisable after the
expiration of five years from the date of grant.
(2) The aggregate Fair Market Value (determined on the date an Incentive Stock Option is granted) of Shares with respect to which Incentive Stock Options are exercisable for the first time by any individual in any calendar year (under the Plan and all of the plans of the Company and any Subsidiary and any parent corporation) shall not exceed $100,000, or such other maximum amount permitted by the Code.
(3) Any Stock Option granted under the Plan may contain a feature providing for, upon the exercise thereof, the grant of a Reload Option subject to and in accordance with the terms and conditions set forth in Section 6 (d) below.
The following additional terms and provisions of this Section 7 shall apply to grants of options to Non-Employee Directors under the Plan, notwithstanding any provision of Section 6(b) to the contrary. The provisions of this Section 7 shall not be amended more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended, or the rules promulgated thereunder.
withheld from the Shares otherwise receivable by the Option Holder upon the exercise of the option) having a Fair Market Value equal to the option price (or a combination of cash and Shares such that the sum of the Fair Market Value of the Shares plus the cash equals the option price). The Committee shall have the authority, subject to such conditions and procedures that it deems necessary and advisable, to authorize the use of a cashless exercise procedure with a registered broker/dealer.
If a Grantee transfers a Nonqualified Option pursuant to Section 10, the Grantee is required to satisfy the applicable withholding taxes by paying cash or other property to the Company with respect to any income recognized by the Grantee on the exercise of such option by the Transferee. The Grantee's withholding obligations must be satisfied on the date that the Transferee exercises the option. If the Grantee does not satisfy the applicable withholding tax obligation, the Company shall retain from the Shares to be issued Shares having a Fair Market Value on the Tax Date equal to the mandatory withholding tax payable by the Grantee.
In connection with the exercise of an option or Limited Right, the Company has the right to require the Grantee to remit or otherwise make available to the Company an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery or transfer of any certificate or certificates for Shares (and prior to a cash payment in the case of a Limited Right) or to take whatever action it deems necessary to protect its interests with respect to tax liabilities in connection with the issuance of Shares or cash payment.
covered by any such grant shall not exceed, but may be less than, the number of Shares covered by the related option. The term of any Limited Right shall be the same as the term of the option to which it relates. The right of a Holder to exercise a Limited Right shall be cancelled if and to the extent a related option is exercised, and the right of a Holder to exercise an option shall be cancelled if and to the extent a related Limited Right is exercised.
(i) during a period of 30 days following the date of expiration of a Tender Offer (other than an offer by the Company), if the offeror acquires Shares pursuant to such Tender Offer;
(ii) during a period of 30 days following the date of approval by the shareholders of the Company of a definitive agreement: (x) for the merger or consolidation of the Company into or with another corporation, if the Company will not be the surviving corporation or will become a subsidiary of another corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) at least 80% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, (y) for the merger or consolidation of the Company with another corporation, if the Company will be the surviving corporation and will not become a subsidiary of another corporation, or for the merger or consolidation of any direct or indirect subsidiary of the Company into or with another corporation, other than (in either case) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of the Company, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of the Company, either by remaining outstanding if the Company continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of the Company or surviving or parent entity outstanding immediately after such merger or consolidation, or (z) for the sale or disposition of all or substantially all of the assets of the Company (each of the foregoing transactions is hereinafter referred to as an "Acquisition Transaction");
(iii) during a period of 30 days following: (x) the date upon
which the Company is provided a copy of a Schedule 13D (filed pursuant to
Section 13(d) of the 1934 Act and the rules and regulations promulgated
thereunder) indicating that any person or group (as such terms are defined
in Section 13(d)(3) of the 1934 Act) has become the beneficial owner (as
defined in Rule 13d-3 of the Exchange Act) of 20% or more of the
outstanding voting Shares of the Company or (y) the date of authorization,
by both a majority of the voting power of the Company and a majority of the
portion of such voting power excluding the voting
power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code) (each of the foregoing transactions is hereinafter referred to as a "Change in Control"); and
(iv) during a period of 30 days following a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected, or were nominated for election, by the Company's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors (such a change in composition is hereinafter referred to as a "Change in Composition of the Board").
The "exercise value" of a Limited Right on the date of exercise shall be:
(i) in the case of an exercise during a period described in
Section 9 (b) (i), the highest price per Share paid pursuant to any Tender
Offer which is in effect at any time during the 60-day period prior to the
date on which the Limited Right is exercised;
(ii) in the case of an exercise during a period described in
Section 9(b) (ii), the greater of: (x) the highest sale price of a Share
during the 30-day period prior to the date of shareholder approval of the
Acquisition Transaction, as reported on the New York Stock Exchange -
Composite Transactions Tape, or (y) the highest fixed or formula per Share
price payable pursuant to the Acquisition Transaction (if determinable on
the date of exercise);
(iii) in the case of an exercise during a period described in
Section 9(b) (iii), the greater of: (x) the highest sale price of a Share
during the 30-day period prior to the date the Company is provided with a
copy of the Schedule 13D, or the date of authorization of the control Share
acquisition, as reported on the New York Stock Exchange - Composite
Transactions Tape, or (y) the highest acquisition price of a Share shown on
such schedule 13D or to be paid in such control Share acquisition; and
(iv) in the case of an exercise during a period described in
Section 9 (b) (iv), the highest sale price of a Share during the 30-day
period prior to the date of the change in Composition of the Board, as
reported on the New York Stock Exchange - Composite Transactions Tape.
Notwithstanding the foregoing, in no event shall the exercise value of a
Limited Right issued in connection with an Incentive Stock Option exceed
the maximum permissible exercise value for such a right
for purposes of Section 422 of the Code and the regulations and interpretations issued pursuant thereto. Any securities or property which form part or all of the consideration paid for Shares pursuant to a Tender Offer or Acquisition Transaction shall be valued at the higher of (1) the valuation placed on such securities or property by the person making such Tender Offer or the other party to such Acquisition Transaction, or (2) the value placed on such securities or property by the Committee.
Except as provided in this Section 10, options granted under the Plan may not be sold, pledged, assigned, hypothecated or transferred other than by Designation of Beneficiary, or, if none, then by will or the laws of descent and distribution and may be exercised during the lifetime of the Grantee only by such Grantee or by his guardian or legal representative.
Upon the death of an Option Holder, outstanding Options held by such Holder may be exercised only by Designation of Beneficiary, or, if none, then by the executor or administrator of the Holder's estate or by a person who shall have acquired the right to such exercise by will or by the laws of descent and distribution.
Subject to such conditions as the Committee may prescribe, during an option Grantee's lifetime, the Committee may permit the transfer or assignment of an outstanding option by such Grantee; provided, that such transfer or assignment shall not apply to (y) an option which is an Incentive Stock Option (but only if nontransferability is necessary in order for the option to qualify as an Incentive Stock Option) and (z) an option granted to a person subject to Section 16 of the 1934 Act (but only if nontransferability is necessary in order for the option to qualify for the exemption under Rule 16b-3 of the 1934 Act)
In the event of a change in outstanding Shares by reason of a Share dividend, recapitalization, merger, consolidation, split-up, combination or exchange of Shares, or the like, or in the event of any similar corporate transaction which the Committee determines requires the adjustments described herein, the maximum number of Shares subject to option during the existence of the Plan, the number of Limited Rights which may be granted under the Plan, the number of Shares subject to, and the option price of, each outstanding option, the maximum number of Shares or Limited Rights which may be granted to any individual over the term of the Plan, the number of Limited Rights outstanding, the Fair Market Value of a Share on the date a Limited Right is granted, and the like shall be appropriately adjusted by the Committee (disregarding any fractional Shares resulting therefrom), whose determination in each case shall be conclusive.
No option or Limited Right shall be granted, no option or Limited Right shall be exercised and Shares shall not be issued or delivered
upon the exercise of an option unless the grant and exercise thereof, and the issuance and/or delivery of Shares pursuant thereto, or the payment therefor, shall comply with all relevant provisions of state and federal law, including, without limitation, the Securities Act of 1933, as amended, the 1934 Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares then may be listed.
Each notice relating to this Plan shall be in writing and delivered in
person or by mail to the proper address. Except as otherwise provided by
the Committee, each notice shall be deemed to have been given on the date
it is delivered or mailed, provided, however, that for a notice of exercise
given in accordance with Section 8 (b), which shall be deemed to have been
given on the date it is received by the Committee with payment of the
option price. Each notice to the Committee shall be addressed as follows:
The Mead Corporation, Mead World Headquarters, Courthouse Plaza Northeast,
Dayton, Ohio 45463, Attention: Compensation Committee. Each notice to the
Holder of an option or other person or persons then entitled to exercise an
option shall be addressed to such person or persons at The Holder's address
as set forth in the records of the Company. Anyone to whom a notice may be
given under this Plan may designate a new address by written notice to the
party to that effect.
This Plan shall inure to the benefit of and be binding upon each successor and assign of the Company. All rights and obligations imposed upon the Holder of an option and all rights granted to the Company under this Plan shall be binding upon such Holder's heirs, legal representatives and successors.
All pronouns shall be deemed to refer to the masculine, feminine, singular or plural, as the identity of the person or persons may require.
The Plan shall become effective upon its approval by the affirmative vote of the holders of a majority of the Shares entitled to vote thereon held by shareholders present in person or by proxy at any shareholders' meeting at which a quorum is present. The Plan shall
expire on September 30, 2005, unless sooner terminated in accordance with
Section 13.
The Plan is designed and intended to comply with Rule 16b-3 promulgated under the 1934 Act and Section 162(m) of the Code and all provisions hereof shall be construed in a manner to so comply.
(1) Adopted by the Board of Directors of the Company on October 28, 1995, and approved by the Company's shareholders on April 25, 1996.
(2) Amendments to Sections 2, 6 (b) and (e), 8 (a) and (d), 10 and 14 to allow for the designation of a beneficiary of the stock option grant.
(3) Amendments to Section 2(b), with an addition of subsection (z); Section
6(a), (f); Section 9(b) with addition of subsections (i), (ii), (iii), (iv)
as adopted by the Board of Directors on June 24, 1998.
(4) Administrative Amendment to Section 8(d) as adopted by the Compensation Committee of the Board of Directors on June 24, 1999.
AMENDMENT
TO
THE MEAD CORPORATION
1996 STOCK OPTION PLAN
THIS AMENDMENT (this "Amendment") is made as of February 22, 2001 to The Mead Corporation 1996 Stock Option Plan (the "Plan").
WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of The Mead Corporation (the "Company"), its shareholders and Grantees that the Plan be amended, in accordance with Section 13 thereof, as provided herein;
NOW, THEREFORE, the Plan is hereby amended as follows, provided that this Amendment shall be subject to the approval of the Company's shareholders at the Company's annual shareholder's meeting on April 26, 2001:
1. The first sentence of Section 3 (a) of the Plan is hereby amended in its entirety to read as follows:
2. The second paragraph of Section 4 of the Plan is hereby amended by adding the phrase "under option agreements entered into prior to April 26, 2001" after the phrase "Reload Options" in the second sentence thereof.
3. Section 4 of the Plan is hereby amended by the addition of the following sentence at the end of the second paragraph thereof:
Notwithstanding the foregoing, except in connection with an adjustment pursuant to Section 11 hereof, in no event shall the Committee have the authority to take any action which would have the result of adjusting downward the exercise price of any Incentive Stock Option or Nonqualified Option granted hereunder, whether through any amendment of the terms of such option, through the cancellation and subsequent replacement of such option with a new option in connection therewith or through any other means.
4. The first sentence of Section 5 of the Plan is hereby amended in its entirety to read as follows:
From time to time during the term of the Plan, the Committee may grant one or more Incentive Stock Options, Nonqualified Options and Reload Options under option agreements entered into prior to April 26, 2001 to any person who is then an officer or other key employee of the Company.
5. Section 6 (b) (5) of the Plan is hereby amended in its entirety to read as follows:
At the time the option is granted, or at such other time as the Committee may determine, the Committee may provide that, if the Grantee of the option ceases to be employed by the Company for any reason (including, but not limited to, the Grantee's disability), other than death or retirement of the Grantee, the option will continue to be exercisable by the Holder (including a Transferee under Section 10 hereof) for such additional period (not to exceed the remaining term of such option) as the Committee may provide. Unless otherwise determined by the Committee at the time an option is granted, if the Grantee of an option granted after April 26, 2001 ceases to be employed by the Company due to the Grantee's retirement, all options granted after April 26, 2001 which are then exercisable by such Grantee shall remain exercisable by the Holder for up to five (5) years after the date of such termination of employment, but in no event may the option be exercised later than its otherwise applicable expiration date.
6. Section 6 (d) of the Plan is hereby amended by adding the phrase "under option agreements entered into prior to April 26, 2001" immediately before the defined term "(the "Original Option")."
7. Section 6 (e) of the Plan is hereby amended by adding the phrase "under option agreements entered into prior to April 26, 2001" after the phrase "including a Reload Option" from the first parenthetical contained therein.
This Amendment shall be effective as of the date first written above to options first granted after April 26, 2001, but shall be subject to the approval of the Company's shareholders at the Company's annual shareholder's meeting in the year 2001. Except as modified by this Amendment, the Plan shall remain in full force and effect.
Exhibit 10.xxix
Amended Through October 29, 1988
WHEREAS, The Mead Corporation Incentive Compensation Election Plan ("Plan") was established for incentive awards earned on and after January 1, 1977, for the benefit of eligible Employees; and
WHEREAS, the Plan has been amended on prior occasions; and
WHEREAS, it is currently desirable to supplement the Plan effective August 1, 1985 (the "Effective Date"),
NOW THEREFORE, with respect only to amounts on the Deferred Compensation Ledger on the Effective Date, amounts of 1985 earned incentive for which a deferral election is in force on the Effective Date under Plan Alternative A, and amounts of salary deferral permitted under this Supplement, the following provisions determine Participant rights and Company obligations under the Plan. All other provisions of the Plan, to the extent not in conflict with this Supplement, shall continue in effect.
(1) Amounts covered under the terms of this Supplement shall, on and after the Effective Date, be maintained in a separate record (hereinafter referred to as the "Supplemental Ledger").
(2) Contributions through salary deferral may be made to the Plan during any portion of the period beginning October 1, 1985 and ending December 31, 1986, not exceeding twelve (12) consecutive months. Participation through salary deferral shall be by monthly deduction of at least $200 and not less than $2400 in the aggregate. All monthly deductions shall be of an equal amount except the monthly amount deducted during 1985 may be different than the monthly amount deducted during 1986.
(3) The Participant shall elect, on or before September 30, 1985, that all or a portion of his/her account in the Supplemental Ledger be distributed under Option A or under Option B or be divided between them.
(a) OPTION A - The Participant or his/her Beneficiary will receive fifteen (15) level annuity payments from his/her account in the Supplemental Ledger commencing on the January 2 next following his/her Termination Date or such later January as shall have been chosen by the Participant, but not later than the January 2 of the Calendar Year following the year in which he/she becomes or would have become age 65, the date chosen by him/her being hereafter referred to as the "Annuity Starting Date."
(b) OPTION B - Commencement, method, and duration will be the same as under Option A, except that four (4) additional annual payments commencing on January 2, 1993 (hereinafter referred to in the aggregate as the "Annual Payments"), shall be paid to the Participant. The Annual Payments shall reduce the amount otherwise payable to the Participant or his/her Beneficiary on his/her Annuity Starting Date in accordance with Option A. Each annual installment of a Participant's Annual Payments shall be equal to the pro rata amount designated for Option B of the total of (i) amounts that were in the Deferred Compensation Ledger on the Effective Date, (ii) amounts of 1985 earned incentive for which a deferred election is in force on the Effective Date, and (iii) amounts of salary deferral elected under the terms of this Supplement. Notwithstanding the foregoing, no payment of an annual installment of a Participant's Annual Payments shall be made if such installment coincides with or follows a Participant's Annuity Starting Date. Any annual installment of a Participant's Annual Payments not made in accordance with the preceding sentence shall be included in valuing the Supplemental Ledger in accordance with (4) below.
*This is a composite of the 1985 Supplement to The Mead Corporation Incentive Compensation Election Plan, reflecting the supplement and all amendments adopted through October 29, 1988. The Mead Corporation Incentive Compensation Election Plan is set forth in a separate document.
Except to the extent otherwise provided in this Section, election of Option A or Option B under the foregoing paragraph shall be irrevocable and may not be subsequently changed.
Notwithstanding the Participant's election of Option A or Option B, if this Supplement is terminated prior to, or if his/her Termination Date for reasons other than death or disability, precedes his/her 55th birthday, distribution of the Participant's account in the Supplemental Ledger shall be made in one lump sum payment on or before the last day of the month next following the date of such occurrence. If the Participant's Termination Date occurs due to death or disability prior to his/her 55th birthday and the value of his/her account on such Termination Date is less than $50,000, such account shall also be so distributed in one lump sum. If the Participant dies on or after his/her Annuity Starting Date, remaining annuity installments, if any, shall continue to be paid from the Plan. In all cases of death, a lump sum payment or a commencement or continuation of a level annuity shall be to the Beneficiary designated pursuant to Section 6(d) of the Plan.
An Annuity Starting Date chosen by the Participant who is not an elected officer of the Company and/or the number of installments chosen by such Participant may be changed by the chairperson of the Compensation Committee, in his/her sole discretion, but only, unless the Compensation Committee determines otherwise, in the event of a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident to the Participant or a dependent (as defined in Section 152(a) of the Internal Revenue Code) of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. For Participants who are elected officers of the Company, the Compensation Committee, in its sole discretion, may change an Annuity Starting Date and/or the number of installments chosen by each such Participant on the same basis as set forth in this paragraph. The number of installments payable to the Participant's designated Beneficiary may be changed by the chairperson of the Compensation Committee on the same basis as set forth in this paragraph.
In the event the Termination Date of a Participant who has elected Option B occurs (for reasons other than death or disability) before receipt of all the Annual Payments to which the Participant is entitled, remaining payments to which the Participant or his/her Beneficiary shall be entitled shall be calculated as if the Participant had elected Option A. If such Participant shall have received one or more but not all of the Annual Payments, his/her Supplemental Ledger account shall be valued pursuant to (4) below as if it had been reduced on the Effective Date by the Effective Date value of Annual Payments received (discounted at Basic plus Option B Incremental Rate) and credited thereafter with the Basic plus Option A Incremental Rate. In the event the Termination Date of such a Participant precedes receipt of all Annual Payments because of death or disability, or in the event all Annual Payments are not made due to coincidence with annuity payments on or after the Annuity Starting Date, the Participant or Beneficiary shall receive payments from the Supplemental Ledger valued at the Basic plus Option B Incremental Rate less any Annual Payments received by the Participant.
(4) Except as provided below, the Participant's Supplemental Ledger account shall be valued on the Annuity Starting Date, or earlier distribution date if applicable, according to whichever of the following (a) or (b) produces the highest value:
(a) as if all amounts had remained in the Deferred Compensation Ledger
on the Effective Date in their separate accounts established pursuant to
Section 6(a) of the Plan and were credited pursuant to Plan Section 6(b) in
the absence of this Supplement; or
(b) by crediting the Participant's Supplemental Ledger account each Calendar Year (with pro rata adjustment for partial years) with a percentage equal to the nine-month average composite yield on single A bonds rounded to the nearest 1/10 of 1% as published in the S & P Indexes of the Security Markets for the first nine months of the Second Calendar Year preceding the year such percentage is credited (hereinafter referred to as the "Basic Rate"), PLUS a percentage (hereinafter referred to as the "Incremental Rate") based on the Participant's age on the Effective Date and his/her choice of Option A or Option B according to the following table:
Incremental Age Option A Option B 39 and under 4% 7% 40-44 5% 8% 45-49 7% 9% 50-54 8% 10% 55-59 11% 11% 60 and over 12% -- |
In no event, however, shall the valuation reflect the addition of the Incremental Rate to the Basic Rate if the Participant's Termination Date (for reasons other than death or disability) precedes his/her 55th birthday, or if prior to his/her 55th birthday, a distribution is made to a Participant due to adverse tax or economic consequences.
(5) All level annuities paid under this Supplement shall be computed using an interest rate percentage equal to an average of the valuation percentages credited under (4) above during the three-year period immediately preceding the Calendar Year in which the first annuity payment is made to a Participant.
(6) Except as provided in (7) below, the Board of Directors of the Company may amend or terminate the Plan or this Supplement as provided in Section 9 of the Plan.
(7) Notwithstanding any other provision contained herein, in no event, including but not limited to termination or amendment of the Plan or Supplement or liquidation or reorganization of the Company:
(a) shall a Participant who has not reached his/her 55th birthday
receive less than the amount credited to the Participant's Supplemental
Ledger account with interest at the Basic Rate, or the total amounts
credited to his/her Deferred Compensation Ledger accounts as provided in
(4)(a) above, if greater;
(b) shall the Basic Rate and Incremental Rate of interest which has been or will be credited to the account of a Participant who has reached his/her 55th birthday, or the interest rate percentage for level annuities provided in (5) above, be changed unless the tax laws of the United States change to increase the cost of the Incremental Rate to the Company in which event the Incremental Rate may be adjusted only to the extent necessary to reflect such change in cost, nor shall the rights of the Participant or Beneficiary to commence or continue distributions from the Supplemental Ledger (including its valuation) be affected.
1. Adopted effective August 1, 1985.
2. Amendments to Sections (3), (5) and (6) adopted effective as of October 1, 1987.
FIRST AMENDMENT
TO THE 1985 SUPPLEMENT
TO THE INCENTIVE COMPENSATION ELECTION PLAN
WHEREAS, The Mead Incentive Compensation Election Plan was established for the benefit of its eligible employees; and
WHEREAS, it is desirable to amend the Plan;
NOW, THEREFORE, effective as of September 1, 1987, the Plan hereby is amended in the respects herein provided.
1. Section 3 of the 1985 Supplement to The Mead Corporation Incentive Compensation Election Plan ("Plan") is hereby amended in its entirety to read as follows:
3. The Participant shall elect, on or before September 30, 1985, that all or a portion of his/her account in the Supplemental Ledger be distributed under Option A or under Option B or be divided between them.
(a) OPTION A - The Director or his/her Beneficiary will receive fifteen (15) level annuity payments from his/her account in the Supplemental Ledger commencing on the January 2 next following his/her Termination Date or such later January 2 as shall have been chosen by the Participant, but not later than the January 2 of the Calendar Year following the year in which he/she becomes or would have become age 65, the date chosen by him/her being hereafter referred to as the "Annuity Starting Date".
(b) OPTION B - Commencement, method, and duration will be the same as under Option A, except that four (4) additional annual payments commencing on
January 2, 1993 (hereinafter referred to in the aggregate as the
"Annual Payments"), shall be paid to the Participant. The Annual
Payments shall reduce the amount otherwise payable to the
Participant of his/her Beneficiary on his/her Annuity Starting
Date in accordance with Option A. Each annual installment of a
Participant's Annual Payments shall be equal to the pro rata
amount designated for Option B of the total of (i) amounts that
were in the Deferred Compensation Ledger on the Effective Date,
(ii) amounts of 1985 earned incentive for which a deferred
election is in force on the Effective Date, and (iii) amounts of
salary deferral elected under the terms of this Supplement.
Notwithstanding the foregoing, no payment of an annual
installment of a Participant's Annual Payments shall be made if
such installment coincides with or follows a Participant's
Annuity Starting Date. Any annual installment of a Participant's
Annual Payments not made in accordance with the preceding
sentence shall be included in valuing the Supplemental Ledger in
accordance with (4) below.
Except to the extent otherwise provided in this Section, election of Option A or Option B under the foregoing paragraph shall be irrevocable and may not be subsequently changed.
Notwithstanding the Participant's election of Option A or Option
B, if this Supplement is terminated prior to, or if his/her
Termination Date for reasons other than death or disability precedes,
his/her 55th birthday, distribution of the Participant's account in
the Supplemental Ledger shall be made in one lump sum payment on or
before the last day of the month next following the date of such
occurrence. If the Participant's Termination Date occurs due to death
or disability prior to his/her 55th birthday and the value of his/her
account on such Termination Date is less than $50,000, such account
shall also be so distributed in one lump sum. If the Participant dies
on or after his/her Annuity Starting Date, remaining annuity
installments, if any, shall continue to be paid from the Plan. In all
cases of death, a lump sum payment or a commencement or continuation
of a level annuity shall be to the beneficiary designated pursuant to
Section 6(d) of the Plan.
An Annuity Starting Date chosen by the Participant who is not an elected officer of the Company and/or the number of installments chosen by such Participant may be changed by the chairperson of the Compensation Committee, in his/her sole discretion, but only, unless the Compensation Committee determines otherwise, in the event of a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident to the Participant or a dependent (as defined in Section 152(a) of the Internal Revenue Code) of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. For Participants who are elected officer of the Company, the Compensation Committee, in its sole discretion, may change an Annuity Starting Date and/or the number of installments chosen by each such Participant on the same basis as set forth in this paragraph. The number of installments payable to the Participant's designated Beneficiary may be changed by the chairperson of the Compensation Committee on the same basis as set forth in this paragraph.
In the event the Termination Date of a Participant who has elected Option B occurs (for reasons other than death or disability) before receipt of all the Annual Payments to which the Participant is entitled, remaining payments to which the Participant or his/her Beneficiary shall be entitled shall be calculated as if the Participant had elected Option A. If such Participant shall have received one or more but not all of the Annual Payments, his/her Supplemental Ledger account shall be valued pursuant to (4) below as if it had been reduced on the Effective Date by the Effective Date value of Annual Payments received (discounted at Basic plus Option B Incremental Rate) and credited thereafter with the Basic plus Option A Incremental Rate. In the event the Termination Date of such a Participant precedes receipt of all Annual Payments because of death or disability, or in the event all Annual Payments are not made due to coincide with annuity payments on or after the Annuity Starting Date, the Participant or Beneficiary shall receive payments from the Supplemental Ledger valued at the Basic plus Option B Incremental Rate less any Annual Payments received by the Participant.
B. Section 5 of the Plan is hereby amended in its entirety to read as follows:
(5) All level annuities paid under this Supplement shall be computed using an interest rate percentage equal to an average of the valuation percentages credited under (4) above during the three-year period immediately preceding the Calendar Year in which the first annuity payment is made to a Participant.
C. Section 6 of the Plan is hereby amended in its entirety to read as follows:
(6) Except as provided in (7) below, the Board of Directors of
the Company may amend or terminate the Plan or this Supplement as provided in
Section 9 of the Plan.
* * *
EXECUTED at Dayton, Ohio, this 17th day of November, 1987.
THE MEAD CORPORATION
/S/ Charles J. Mazza ----------------------- Title: Vice President Attest: /S/ LORRAINE J. FRANCIS --------------------------- Title: Assistant Secretary |
AMEND
SECOND AMENDMENT
TO
1985 SUPPLEMENT TO
THE MEAD CORPORATION
INCENTIVE COMPENSATION ELECTION PLAN
WHEREAS The Mead Corporation (the "Company") heretofore established 1985 Supplement to The Mead Corporation Incentive Compensation Election Plan (the "Supplement") and subsequently amended the Supplement; and
WHEREAS the Company desires to further amend the Supplement pursuant to the power reserved to the Company's Board of Directions by Section 6 of the Supplement;
NOW, THEREFORE, the Supplement is hereby amended, effective as of June 24, 1998, as follows:
1. The paragraph of Section 3 of the Supplement which begins with the words "An Annuity Starting Date chosen by the Participant...." is amended by the addition of the following sentence at the end thereof:
"Notwithstanding the foregoing provisions of this paragraph, upon and after the occurrence of a Change in Control (as defined in Section 8 hereof), the discretionary power given the Compensation Committee to change the Annuity Starting Date chosen by a Participant and/or the number of installments chosen by the Participant shall be exercisable in a manner which postpones the Annuity Starting Date or postpones or reduces any installment payment only if the Compensation Committee shall have previously received a written request from the Participant for such change and such power shall be exercisable only to determine whether to grant the particular change requested or to retain existing Annuity Starting Date and existing installments."
2. The Supplement is amended by the addition of the following new
Section 8:
"(8) For purposes of the Supplement, a 'Change in Control' shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
"(i) date of expiration of a Tender Offer (other than an offer by the Company), if the offeror acquires Shares pursuant to such Tender Offer;
"(ii) the date of approval by the shareholders of the Company of a definitive agreement: (x) for the merger or consolidation of the Company or any direct or indirect subsidiary of the Company into or with another corporation, other than (l) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of the Company, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of the Company, either by remaining outstanding if the Company continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of the Company, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition;
"(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x)(l) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of the Company and a
majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
"(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected, or were nominated for election, by the Company's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
"Notwithstanding the foregoing, a 'Change in Control' shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
"'Affiliate' shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
"'Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the Exchange Act.
"'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended from time to time.
"'Person' shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that
such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities,
or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
"'Shares' shall mean shares of common stock, without par value, of The Mead Corporation.
"'Tender Offer' shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time."
AMENDMENT TO
THE MEAD CORPORATION
1985 SUPPLEMENT TO THE
INCENTIVE COMPENSATION ELECTION PLAN
WHEREAS, The Mead Corporation ("Mead") established The Mead Corporation 1985 Supplement to the Incentive Compensation Election Plan (the "Supplement") and subsequently amended the Supplement, and
WHEREAS, Mead desires to further amend the Supplement pursuant to the power reserved to Mead's Compensation Committee by Section 9 of the Plan;
NOW, THEREFORE, the Supplement is hereby amended, effective as of October 26, 2001, as follows:
1. Section 3 is revised to add a new fifth paragraph to read as follows and the current fifth paragraph becomes the sixth paragraph:
Notwithstanding any provision in the Supplement to the contrary but subject to this Section 3, third paragraph (except as specifically otherwise provided in this paragraph), a former or current Employee can revise the commencement date of distributions and the number of installments (including a lump sum payment) with respect to the amount credited to an Employee's account as follows:
(i) prior to a Change in Control, a former or current Employee may revise a previously elected commencement date and number of installments (such revision being permitted to include receiving all or a portion of an account in a lump sum following a Change in Control and prior to employment termination), provided that any such revision is effective only for distributions on or following a Change in Control and occurring during January 2003 and thereafter and with respect to all or a portion of the balance of such Employee's account on a Change in Control; and
(ii) at least three months prior to employment termination (whether before or after a Change in Control), a current Employee may file such revision with respect to the balance of such Employee's account on such termination of service.
An Employee can make revisions in accordance with this paragraph on a form furnished by and filed with the person responsible for administering the Supplement at any time prior to the dates stated in this paragraph.
Exhibit 10.xxx
SECTION 1 - GENERAL............................................. 1 1.1 History and Purpose................................. 1 1.2 Plan Funding and Administration..................... 1 1.3 Applicable Law...................................... 1 1.4 Gender and Number................................... 2 1.5 Assignment.......................................... 2 1.6 Plan Year........................................... 2 SECTION 2 - PARTICIPATION....................................... 2 2.1 Eligibility for Participation....................... 2 2.2 Participation Not Contract of Employment............ 2 SECTION 3 - DETERMINATION OF SECTION 415 EXCESS BENEFIT AMOUNT.. 2 3.1 Section 415 Excess Benefit Amount................... 2 3.2 Unlimited Accrued Benefit........................... 3 3.3 Qualified Accrued Benefit........................... 3 SECTION 4 - DISTRIBUTION OF SECTION 415 EXCESS BENEFIT.......... 3 4.1 Distribution to a Participant....................... 3 4.2 Distribution to a Surviving Spouse.................. 4 4.3 Distribution in Discretionary Form.................. 4 4.4 Distribution to a Beneficiary....................... 5 4.5 ECAP Credit in Lieu of Distribution................. 5 4.6 Distribution of Incapacitated Persons............... 6 SECTION 5 - DISPUTE RESOLUTION.................................. 6 5.1 Notice of Denial.................................... 6 5.2 Notice of Appeal.................................... 6 5.3 Decision on Appeal.................................. 7 |
SECTION 6 - AMENDMENT AND TERMINATION........................... 7 |
transfers by reason of death or mental incompetency; no attempted assignment or transfer thereof shall be effective; and no such right or interest shall be liable for, or subject to, any obligation or liability of any person.
(a) the limitations of section 415 of the Code; or
(b) the amount of any otherwise applicable reduction in the amount of his Accrued Benefit on account of any amount paid or payable:
(i) to or on account of the Participant under any other "qualified" defined benefit pension plan maintained by any Employer; or
(ii) to an "alternate payee" (as defined in section 414(p) of the Code).
(a) the date as of which payment of his Pension is made or commenced under The Mead Retirement Plan in the case of a Section 415 Excess Benefit attributable to his period of participation ending prior to his Required Beginning Date; or
(b) the end of the Plan Year in which a right to an additional benefit arises in the case of a Section 415 Excess Benefit attributable to any period of participation beginning on his Required Beginning Date.
Notwithstanding any other provision of the Plan, for purposes of this Section if a Participant's Section 415 Excess Benefit described in paragraph (a) above is subject to distribution at any date prior to the Participant's Normal Retirement Date, then the amount of that benefit, as otherwise determined in accordance with the provisions of subsection 3.1, shall be reduced to reflect early commencement by application of any reduction factors that are applicable in determining the amount of the Pension payable to him under The Mead Retirement Plan as of that date.
Committee exercises the discretion vested in it by the provisions of the foregoing sentence, it may, in its sole discretion, thereafter accelerate payments to the recipient if it is determined (as provided below) that the Participant or Spouse, as the case may be, has experienced an "Unforeseeable Emergency" (as defined below), provided that the amount of any such accelerated payment shall not exceed the amount reasonably needed to satisfy the recipient's emergency need. The term "Unforeseeable Emergency" means severe financial hardship to the Participant or Spouse resulting from a sudden and unexpected illness or accident of the Participant or Spouse or of his or her "dependent" (as defined in section 152(a) of the Code), loss of the Participant's or Spouse's property due to a casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant or Spouse, as the case may be. In determining whether an Emergency Distribution should be made consideration may be given to the extent to which his or her Unforeseeable Emergency can be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant's or Spouse's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship. A determination with respect to whether a Participant or Spouse has experienced an Unforeseeable Emergency shall be made:
(a) in the case of a Participant employed, or last employed, by an Employer at a salary grade below salary grade 24 (exclusive of an elected officer of an Employer) and of his Spouse, by the Chairperson of the Committee; and
(b) in the case of a Participant employed, or last employed, by an Employer at salary grade 24 or above or as an elected officer of an Employer and his Spouse, by the Committee.
An election made by a Participant in accordance with the provisions of this subsection must be in such written form as the Committee shall decide and filed with the Plan Administrator at least one year in advance of the date of the Participant's termination of employment with the Employers and Affiliates. In no event shall this subsection be applicable to any amount distributable to a Participant's surviving Spouse pursuant to the provisions of subsection 4.2.
(a) the provisions of the Plan upon which the resolution was based; and
(b) an explanation of this claims procedure.
If the Administrator rejects a Claimant's application for failure to furnish certain necessary materials or information, the written notice to the Claimant will explain what additional material is needed and why, and advise the Claimant that he may refile a proper application. In the event that the Administrator fails to take any action on the Claimant's initial application within 90 days after receipt, the application will be deemed denied, and the Claimant's appeal rights under subsection 5.2 will be in effect as of the end of such period.
(a) in the case of a Participant employed, or last employed, by an Employer at a salary grade below salary grade 24 (exclusive of an elected officer of an Employer) and of his Spouse or Beneficiary, the Benefit Appeals Committee, a committee appointed by the Corporate Benefits Committee of Mead; and
(b) in the case of a Participant employed, or last employed, by an Employer at salary grade 24 or above or as an elected officer of an Employer and of his Spouse or Beneficiary, the Chairperson of the Committee.
Mead, by action of the Committee, reserves the right to amend the Plan at any time. The Plan will terminate on the date on which it is terminated by Mead's Board of Directors. Neither an amendment or termination of the Plan shall, of itself, reduce the amount of a Participant's Section 415 Excess Benefit, which amount shall continue to be adjusted from time to time pursuant to the provisions of Section 3 until distributed in accordance with the provisions of Section 4.
SECOND AMENDMENT
TO
THE MEAD CORPORATION
SECTION 415 EXCESS BENEFIT PLAN
WHEREAS The Mead Corporation ("Mead") heretofore established The Mead Corporation Section 415 Excess Benefit Plan (the "Plan"); and
WHEREAS Mead desires to amend the Plan pursuant to the power reserved to Mead's Compensation Committee by Section 6 of the Plan;
NOW, THEREFORE, the Plan is hereby amended, effective as of June 24, 1998, as follows:
1. Subsection 1.1 is amended by the addition of the following sentence at the end thereof:
"The term 'Committee' means the Compensation Committee of the Board of Directors of Mead."
2. Subsection 1.2 of the Plan is amended to read, in its entirety, as follows:
3. Subsection 4.3 of the Plan is amended by the addition of the following sentence at the end thereof:
"Notwithstanding the first sentence of this subsection 4.3, upon and after the occurrence of a Change in Control (as defined in Section 7 hereof), the discretionary power therein given the Committee to alter the form of payment of a Participant's benefits hereunder from lump sum payment to periodic payments shall be exercisable only following the Committee's receipt of a written request from the Participant for a change to periodic payments and shall be exercisable only to determine whether to grant the particular form of periodic payments so requested or to retain the lump sum payment form."
4. The Plan is amended by the addition of the following new Section 7:
"For purposes of the Plan, a 'Change in Control' shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
"(i) date of expiration of a Tender Offer (other than an offer by Mead), if the offeror acquires Shares pursuant to such Tender Offer;
"(ii) the date of approval by the shareholders of Mead of a definitive agreement: (x) for the merger or consolidation of Mead or any direct or indirect subsidiary of Mead into or with another corporation, other than (1) a merger or consolidation which would result in the voting securities of Mead outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of Mead, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of Mead, either by remaining outstanding if Mead continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of Mead or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of Mead (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of Mead (not including in the securities Beneficially Owned by such Person any securities acquired directly from Mead or its Affiliates) representing 25% or more of the combined voting
power of Mead's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of Mead, other than a sale or disposition by Mead of all or substantially all of Mead's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of Mead in substantially the same proportions as their ownership of Mead immediately prior to such sale or disposition;
"(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of Mead (not including in the securities beneficially owned by such Person any securities acquired directly from Mead or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x)(l) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of Mead and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
"(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Mead) who were elected, or were nominated for election, by Mead's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
"Notwithstanding the foregoing, a 'Change in Control' shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of Mead immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of Mead immediately following such transaction or series of transactions.
"'Affiliate' shall have the meaning set forth in Rule 1 2b-2 promulgated under Section 12 of the Exchange Act.
"'Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the Exchange Act.
"'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended from time to time.
"'Person' shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) Mead or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Mead or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of Mead in substantially the same proportions as their ownership of stock of Mead.
"'Shares' shall mean shares of common stock, without par value, of The Mead Corporation.
"'Tender Offer' shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time."
AMENDMENT
TO
THE MEAD CORPORATION
SECTION 415 EXCESS BENEFIT PLAN
WHEREAS, The Mead Corporation ("Mead") heretofore established The Mead Corporation Section 415 Excess Benefit Plan (the "Plan") and subsequently amended the Plan, and
WHEREAS, Mead desires to further amend the Plan pursuant to the power reserved to Mead's Compensation Committee by Section 6 of the Plan;
NOW THEREFORE, the Plan is hereby amended, effective as of October 26, 2001, as follows:
1. Subsection 4.5 is revised to read as follows:
Exhibit 10.xxxi
TABLE OF CONTENTS
SECTION 1 - GENERAL.............................................................. 1 1.1 History and Purpose................................................. 1 1.2 Plan Funding and Administration..................................... 1 1.3 Applicable Law...................................................... 2 1.4 Gender and Number................................................... 2 1.5 Assignment.......................................................... 2 1.6 Plan Year........................................................... 2 SECTION 2 - PARTICIPATION........................................................ 2 2.1 Eligibility for Participation....................................... 2 2.2 Participation Not Contract of Employment............................ 2 SECTION 3 - DETERMINATION OF EXCESS EARNINGS BENEFIT AMOUNT...................... 2 3.1 Excess Earnings Benefit Amount...................................... 2 3.2 Unlimited Accrued Benefit........................................... 3 3.3 Qualified Accrued Benefit........................................... 3 SECTION 4 - DISTRIBUTION OF EXCESS EARNINGS BENEFIT.............................. 4 4.1 Distribution to a Participant....................................... 4 4.2 Distribution to a Surviving Spouse.................................. 4 4.3 Distribution in Discretionary Form.................................. 4 4.4 Distribution to a Beneficiary....................................... 5 4.5 ECAP Credit in Lieu of Distribution................................. 6 4.6 Distribution to Incapacitated Persons............................... 6 SECTION 5 - DISPUTE RESOLUTION................................................... 6 5.1 Notice of Denial.................................................... 6 5.2 Notice of Appeal.................................................... 6 5.3 Decision on Appeal.................................................. 7 SECTION 6 - AMENDMENT AND TERMINATION............................................ 7 |
(a) the amount of his "Qualified Accrued Benefit" (as defined in subsection 3.3) as of that date; and
(b) the amount of his "Section 415 Excess Benefit" (determined in accordance with the provisions of The Mead Corporation Section 415 Excess Benefit Plan).
Notwithstanding the foregoing provisions of this subsection, if a Participant continues in the employ of the Employers and Affiliates after his Required Beginning Date (as defined in The Mead Retirement Plan), the amount of his Excess Earnings Benefit shall be recomputed as of the last day of each Plan Year, beginning with the Plan Year during which the Participant's Required Beginning Date occurs, taking into account amounts previously distributed to him under the Plan. If any such recomputation results in an additional Excess Earnings Benefit amount, that amount shall be distributed to him in accordance with paragraph 4.1(b).
(a) the limitations of section 415 of the Code;
(b) the amount of any otherwise applicable reduction in the amount of his Accrued Benefit on account of any amount paid or payable:
(i) to or on account of the Participant under any other "qualified" defined benefit pension plan maintained by any Employer; or
(ii) to an "alternate payee" (as defined in section 414(p) of the Code); or
(c) the limitation of section 401(a)(17) of the Code; but
(d) by taking into account the amount, if any, that:
(i) the Participant elects to defer under the terms of The Mead Corporation Executive Capital Accumulation Plan ("EXCAP") for any applicable Plan Year, exclusive of any portion of a deferral that is attributable to long-term incentive compensation paid to him;
(ii) the fair market value of each share of common stock of Mead issued, or deemed issued, to the Participant (whether or not subject to a risk of forfeiture) in lieu of cash payment of the Participant's base salary or short term incentive compensation for any applicable Plan Year, which value shall be determined as the closing price of a share of such stock on the New York Stock Exchange on the date payment is otherwise due or, if no Mead common stock is traded on that Exchange on that date for any reason, the next preceding day on which Mead common stock was traded on the New York Stock Exchange; and
(iii) any amount paid to the Participant paid to the Participant in lieu of an annual incentive plan payment and not deferred by him under EXCAP.
(a) the date as of which payment of his Pension is made or commenced under The Mead Retirement Plan in the case of an Excess Earnings Benefit attributable to his period of participation ending prior to his Required Beginning Date; or
(b) the end of the Plan Year in which a right to an additional benefit arises in the case of an Excess Earnings Benefit attributable to any period of participation beginning on his Required Beginning Date.
Notwithstanding any other provision of the Plan, for purposes of this Section if a Participant's Excess Earnings Benefit described in paragraph (a) above is subject to distribution at any date prior to the Participant's Normal Retirement Date, then the amount of that benefit, as otherwise determined in accordance with the provisions of subsection 3.1, shall be reduced to reflect early commencement by application of any reduction factors that are applicable in determining the amount of the Pension payable to him under The Mead Retirement Plan as of that date.
"dependent" (as defined in section 152(a) of the Code), loss of the Participant's or Spouse's property due to a casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant or Spouse, as the case may be. In determining whether an Emergency Distribution should be made consideration may be given to the extent to which his or her Unforeseeable Emergency can be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant's or Spouse's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship. A determination with respect to whether a Participant or Spouse has experienced an Unforeseeable Emergency shall be made:
(a) in the case of a Participant employed, or last employed, by an Employer at a salary grade below salary grade 24 (exclusive of an elected officer of an Employer) and of his Spouse, by the Chairperson of the Committee acting for the Committee; and
(b) in the case of a Participant employed, or last employed, by an Employer at salary grade 24 or above or as an elected officer of an Employer and of his Spouse, by the Committee.
Employers and Affiliates. In no event shall this subsection be applicable to any amount distributable to a Participant's surviving Spouse pursuant to the provisions of subsection 4.2.
(a) the provisions of the Plan upon which the resolution was based; and
(b) an explanation of this claims procedure.
If the Administrator rejects a Claimant's application for failure to furnish certain necessary materials or information, the written notice to the Claimant will explain what additional material is needed and why, and advise the Claimant that he may refile a proper application. In the event that the Administrator fails to take any action on the Claimant's initial application within 90 days after receipt, the application will be deemed denied, and the Claimant's appeal rights under subsection 5.2 will be in effect as of the end of such period.
(a) in the case of a Participant employed, or last employed, by an Employer at a salary grade below salary grade 24 (exclusive of an elected officer of an Employer) and of his Spouse or Beneficiary, the Benefit Appeals Committee, a committee appointed by the Corporate Benefits Committee of Mead; and
(b) in the case of a Participant employed, or last employed, by an Employer at salary grade 24 or above or as an elected officer of an Employer and of his Spouse or Beneficiary, the Chairperson of the Committee.
Mead, by action of the Committee, reserves the right to amend the Plan at
any time. The Plan will terminate on the date on which it is terminated by
Mead's Board of Directors. Neither an amendment or termination of the Plan
shall, of itself, reduce the amount of a Participant's Excess Earnings Benefit,
which amount shall continue to be adjusted from time to time pursuant to the
provisions of Section 3 until distributed in accordance with the provisions of
Section 4.
FIRST AMENDMENT
TO
THE MEAD CORPORATION
EXCESS EARNINGS BENEFIT PLAN
WHEREAS The Mead Corporation ("Mead") heretofore established The Mead Corporation Excess Earnings Benefit Plan (the "Plan"); and
WHEREAS Mead desires to amend the Plan pursuant to the power reserved to Mead's Compensation Committee by Section 6 of the Plan;
NOW, THEREFORE, the Plan is hereby amended, effective as of June 24, 1998, as follows:
1. Subsection 1.1 is amended by the addition of the following sentence at the end thereof:
"The term 'Committee' means the Compensation Committee of the Board of Directors of Mead."
2. Subsection 1.2 of the Plan is amended to read, in its entirety, as follows:
3. Subsection 4.3 of the Plan is amended by the addition of the following sentence at the end thereof:
"Notwithstanding the first sentence of this subsection 4.3, upon and after the occurrence of a Change in Control (as defined in Section 7 hereof), the discretionary power therein given the Committee to alter the form of payment of a Participant's benefits hereunder from lump sum payment to periodic payments shall be exercisable only following the Committee's receipt of a written request from the Participant for a change to periodic payments and shall be exercisable only to determine whether to grant the particular form of periodic payments so requested or to retain the lump sum payment form."
4. The Plan is amended by the addition of the following new Section 7:
"For purposes of the Plan, a 'Change in Control' shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
"(i) date of expiration of a Tender Offer (other than an offer by Mead), if the offeror acquires Shares pursuant to such Tender Offer;
"(ii) the date of approval by the shareholders of Mead of a definitive agreement: (x) for the merger or consolidation of Mead or any direct or indirect subsidiary of Mead into or with another corporation, other than (1) a merger or consolidation which would result in the voting securities of Mead outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of Mead, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of Mead, either by remaining outstanding if Mead continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of Mead or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of Mead (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of Mead (not including in the securities Beneficially Owned by such Person any securities acquired directly from Mead or its Affiliates) representing 25% or more of the combined voting
power of Mead's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of Mead, other than a sale or disposition by Mead of all or substantially all of Mead's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of Mead in substantially the same proportions as their ownership of Mead immediately prior to such sale or disposition;
"(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of Mead (not including in the securities beneficially owned by such Person any securities acquired directly from Mead or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x)(1) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of Mead and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
"(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Mead) who were elected, or were nominated for election, by Mead's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
"Notwithstanding the foregoing, a 'Change in Control' shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of Mead immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of Mead immediately following such transaction or series of transactions.
"'Affiliate' shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
"'Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the Exchange Act.
"'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended from time to time.
"'Person' shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) Mead or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Mead or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of Mead in substantially the same proportions as their ownership of stock of Mead.
"'Shares' shall mean shares of common stock, without par value, of The Mead Corporation.
"'Tender Offer' shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time."
AMENDMENT
TO
THE MEAD CORPORATION
EXCESS EARNINGS BENEFIT PLAN
WHEREAS, The Mead Corporation ("Mead") heretofore established The Mead Corporation Excess Earnings Benefit Plan (the "Plan") and subsequently amended the Plan, and
WHEREAS, Mead desires to further amend the Plan pursuant to the power reserved to Mead's Compensation Committee by Section 6 of the Plan;
NOW THEREFORE, the Plan is hereby amended, effective as of October 26, 2001, as follows:
1. Subsection 4.5 is revised to read as follows:
Exhibit 10.xxxii
TABLE OF CONTENTS
SECTION 1 - GENERAL................................................................... 1 1.1 History and Effective Date................................................ 1 1.2 Purpose of Plan........................................................... 1 1.3 Purpose of Restatement.................................................... 1 1.4 Plan Funding and Administration........................................... 2 1.5 Applicable Law............................................................ 2 1.6 Gender and Number......................................................... 2 1.7 Assignment................................................................ 2 1.8 Notices................................................................... 2 SECTION 2 - PARTICIPATION............................................................. 3 2.1 Eligibility for Participation............................................. 3 2.2 Participation Not Contract of Employment.................................. 3 SECTION 3 - BASIC BENEFIT............................................................. 3 3.1 Eligibility for Basic Benefit............................................. 3 3.2 Amount of Basic Benefit................................................... 3 3.3 Form and Time of Payment of Basic Benefit................................. 4 3.4 Final Average Earnings.................................................... 4 3.5 Earnings.................................................................. 4 3.6 Other Benefits............................................................ 5 SECTION 4 - EARLY BENEFIT............................................................. 5 4.1 Eligibility for Early Benefit............................................. 5 4.2 Amount of Early Benefit................................................... 6 4.3 Form and Time of Payment of Early Benefit................................. 6 SECTION 5 - PRE-AGE 55 BENEFIT........................................................ 6 5.1 Eligibility for Pre-Age 55 Benefit........................................ 6 5.2 Amount of Pre-Age 55 Benefit.............................................. 6 5.3 Form and Time of Payment of Pre-Age 55 Benefit............................ 7 5.4 Involuntary Termination................................................... 7 5.5 Termination for Cause..................................................... 8 SECTION 6 - DISABILITY BENEFIT........................................................ 8 6.1 Eligibility for Disability Benefit........................................ 8 6.2 Amount of Disability Benefit.............................................. 9 6.3 Form and Time of Payment of Disability Benefit............................ 9 SECTION 7 - OPTIONAL FORMS OF BENEFIT PAYMENT......................................... 9 7.1 Request for Optional Payment Form......................................... 9 7.2 Optional Forms of Benefit Payment......................................... 9 7.3 Limitations on Optional Forms of Payment.................................. 10 SECTION 8 - DEATH BENEFIT............................................................. 10 8.1 Eligibility for Death Benefit............................................. 10 8.2 Amount of Death Benefit................................................... 10 8.3 Beneficiary............................................................... 10 SECTION 9 - SPOUSAL SURVIVOR BENEFIT.................................................. 11 9.1 Eligibility for Spousal Survivor Benefit.................................. 11 9.2 Amount of Spousal Survivor Benefit........................................ 11 9.3 Form and Time of Payment of Spousal Survivor Benefit...................... 11 9.4 Reduction for Spousal Survivor Benefit.................................... 12 |
SECTION 10 - SPECIAL PROVISIONS AFFECTING PAYMENT OF BENEFITS................................. 12 10.1 Competition...................................................................... 12 10.2 Termination for Cause............................................................ 13 10.3 Payments After a Change in Control............................................... 13 10.4 Emergency Payments............................................................... 14 10.5 ECAP Credit in Lieu of Distribution.............................................. 15 10.6 Payment to Incapacitated Persons................................................. 15 10.7 Withholding...................................................................... 15 SECTION 11 - DISPUTE RESOLUTION............................................................... 15 11.1 Notice of Denial................................................................. 15 11.2 Notice of Appeal................................................................. 16 11.3 Decision on Appeal............................................................... 16 11.4 Records, Data and Information.................................................... 16 SECTION 12 - AMENDMENT AND TERMINATION........................................................ 17 12.1 Amendment and Termination........................................................ 17 12.2 Contingencies Affecting the Employers............................................ 17 12.3 Protected Benefits............................................................... 17 |
(a) recruit mid-career executives;
(b) retain and motivate employed executives; and
(c) permit earlier than normal retirement of executives when it is found to be desirable.
The term "Affiliate" means any entity during the period that it is, along with
Mead, a member of a controlled group of corporations, a controlled group of
trades and businesses, an affiliated service group or any other entity
designated by the Secretary of the Treasury as described in sections 414(b),
414(c), 414(m), and 414(o), respectively, of the Internal Revenue Code of 1986
(the "Code"). Mead and any Affiliate designated by the Compensation Committee
of Mead's Board of Directors (the "Committee") and employing a "Participant" (as
described in subsection 2.1) hereunder are sometimes referred to below,
individually, as an "Employer" and, collectively, as the "Employers."
rules, regulations and interpretations shall be uniformly applied to all persons similarly situated.
(a) is a Participant in The Mead Retirement Plan;
(b) is employed in a job classification designated by the Committee;
(c) has been employed in such a job classification for 36 consecutive months; and
(d) has executed such forms and supplied the Plan Administrator with such documents, evidence, data and information as the Committee may require.
Subject to the terms and conditions of the Plan, an individual who has once become a Participant in the Plan shall continue as such, notwithstanding his transfer to employment with an Employer in a non-designated job classification or with an Affiliate.
(a) 55 percent of his "Final Average Earnings" (as defined in subsection 3.4);
(b) the amount of the Participant's "Other Benefits" (as defined in subsection 3.6); and
(c) the reduction, if any, required by subsection 9.4 which relates to "Spousal Survivor Benefits" (as described in subsection 9.1).
(a) include payments from long term incentive
compensation plans, stock option plans, stock appreciation rights, severance payments, special agreements, contracts or payments, expense reimbursements or relocation allowances; or
(b) exceed 2 times his base pay.
(a) 50 percent of the annual primary Social Security benefit payable (or, in the case of a Participant whose Benefit is being determined prior to the date he attains age 62 years, estimated by the Plan Administrator, in his absolute discretion, to be payable) to the Participant at age 62;
(b) disregarding any reduction on account of a "qualified domestic relations order" (as defined in section 414(p) of the Code), the annual amounts (expressed as single life annuities) determined to be payable to the Participant under The Mead Retirement Plan, The Mead Section 415 Excess Plan and The Mead Excess Compensation Plan (the "Mead Plans") as of his termination date, or such other determination date as is specifically provided with respect to a particular Plan Benefit; and
(c) disregarding any reduction on account of a qualified domestic relations order, the annual amount (expressed as a single life annuity) payable to the Participant from the employer funded portion of any deferred, vested or lump sum benefit earned under a "Prior Retirement Plan" (that is any defined benefit plan or other similar primary retirement plan intended to meet the requirements of section 401(a) of the Code (including any governmental plan) maintained by any previous employer of the Participant) prior to age 55 and payable no earlier than 10 years prior to the date on which the Participant was employed by the Employers and Affiliates.
(a) reducing the percentage "55 percent" found in paragraph 3.2(a) by 1/4 of one percent for each full month by which the date of the Participant's termination of employment with the Employers and the Affiliates precedes the first day of the calendar month coincident with, or next following, the date on which he will attain age 62 years; and
(b) by assuming, for purposes of determining the amount of his Other Benefits attributable to the Mead Plans, that he will continue as a Participant under those Plans until the date on which he will attain age 55 years and that his benefits under The Mead Plans will be payable on that date.
(a) at the option of his employer, for a reason other than "Cause" (as defined in subsection 5.5); or
(b) at the Participant's option, exercised within the 24-month period following the occurrence, without the express consent of the Participant, of any one or more of the following events:
(i) the assignment of duties to the Participant which are substantially inconsistent with the Participant's duties, responsibilities and status at the time of the assignment, or that constitute a substantial reduction or alteration in the nature or status of such duties and responsibilities;
(ii) a reduction in the amount of the Participant's base pay;
(iii) the transfer of the work location of the Participant to a place that is in excess of 25 miles from his work location at the time the transfer is made;
(iv) the failure of the Participant's Employer or Affiliate employer to continue in effect any of its employee benefit plans, policies, practices or arrangements, including, but not limited to, those plans, policies and arrangements maintained solely for the benefit of key
management personnel in which the Participant participates, or the failure of it to continue the Participant's participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of participation relative to other participants, unless such benefits, policies and arrangements are replaced by one or more alternative or substitute plans, policies or arrangements providing substantially equivalent benefits in the aggregate.
The determination of whether an event described in paragraph (b) above has occurred shall be made by the Committee, based on its comparison of circumstances existing after the alleged occurrence with the circumstances prevailing immediately prior thereto.
(a) willful and continued failure to perform duties with the Employers and Affiliates (other than any such failure resulting from an Involuntary Termination) after a written demand for substantial performance has been delivered to the Participant specifically identifying the manner in which the Employer or Affiliate, as the case may be, believes the Participant has not substantially performed such duties and the Participant has failed to resume substantial performance on a continuous basis within 14 days of receiving such demand;
(b) willfully engaging in conduct which the Committee determines is demonstrably and materially injurious to the Employers or Affiliates, monetarily or otherwise; or
(c) conviction of a felony, or conviction of a misdemeanor which impairs the Participant's ability to perform his duties with the Employer or Affiliate employing him.
(a) a single life annuity in the amount calculated under subsection 3.2, 4.2, 5.2 or 6.2, whichever is applicable, payable commencing at the time permitted under subsection 3.3, 4.3, 5.3 or 6.3, whichever is applicable;
(b) any optional form of benefit permitted (assuming, for this purpose, that election of an optional form of Disability Pension is permitted) under the provisions of The Mead Retirement Plan at the time the request is made, the amount of which shall be determined by applying the actuarial assumptions utilized under that plan; and
(c) in the case of an Early Benefit payable monthly pursuant to subsection 4.3, by foregoing those monthly amounts and instead receiving the Actuarial Present Value of the Early Benefit computed as of age 62, but without regard to the percentage reduction otherwise required by subsection 4.2, payable in a single, lump sum distribution as of the first day of the month coincident with, or next following, the date on which the Participant attains age 62 years.
(a) payment of any single, lump sum amount to a Participant prior to the first day of the month coincident with, or next following, the date on which the Participant attains age 62 years; or
(b) payment of a Disability Benefit prior to the time specified in subsection 6.3.
by the aggregate amount of the monthly payments previously made to him and increased by interest on the undistributed portion of his Early Benefit calculated from his termination date to the payment date), determined as of his termination date.
(a) calculating the amount, expressed as a joint and survivor annuity of 50, 66 2/3 or 75 percent (whichever is payable to the Spouse as a Pre-Retirement Survivor Pension under The Mead Retirement Plan), which is of Actuarial Equivalent Value to a single life annuity computed with respect to the deceased Participant pursuant to subsection 3.1, 4.1 or 5.1, whichever is applicable; and
(b) then determining the annual amount that would be payable to the surviving Spouse on the basis of the joint and survivor annuity computed under paragraph (a) above.
Notwithstanding the provisions of paragraph 3.2(b) to the contrary, in computing the amount of a "Spousal Survivor Benefit" with respect to the surviving Spouse of a deceased Participant who had not attained age 55 years on the date of his death, the Other Benefit attributable to The Mead Retirement Plan shall be an amount equal to the Participant's "Accrued Benefit" (as defined under that plan) as of the date of his death, assuming that the amount of his Final Average Earnings used in computing his Accrued Benefit equalled the "Earnings" (as defined in The Mead Retirement Plan) payable to him by the Employers during his last full calendar year of employment by them and that his "Pension" under The Mead Retirement Plan would be payable at the date the deceased Participant would have attained age 55 years.
in the form of a single, lump sum payment, as soon as practicable after the date of the Participant's death.
Percentage Reduction Percentage of Benefit for Each Full Year Payable to Spouse of Coverage --------------------- -------------------- 50 percent 1/2 of one percent 66 2/3 percent 2/3 of one percent 75 percent 3/4 of one percent |
Notwithstanding the foregoing table, in no event will a percentage reduction under this Plan be greater than the percentage reduction for a Pre-Retirement Survivor Pension of a like amount under The Mead Retirement Plan.
(a) a Participant who has not attained age 55 years on the day preceding the date of a Change in Control will be deemed to have had his employment with the Employers and Affiliates Involuntarily Terminated on that day; and
(b) in the case of a Participant terminated on account of becoming Disabled, it shall be assumed that he will continue to be Disabled until he attains age 62 years.
If a Participant, surviving Spouse or Beneficiary is receiving payment of periodic Plan Benefits on the date of a Change in Control, the Actuarial Present Value of any remaining payments (determined as of the day immediately preceding that date) shall be payable to him, in a single, lump sum, within 30 days of the date of the Change in Control. For purposes of the Plan, the term "Change in Control" of Mead means a change in control of a nature that would be required to be reported in response to Item 6(e) (or any successor thereto) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not Mead is then subject to such reporting requirement; provided, that, without limitation, such a Change in Control shall be deemed to have occurred if:
(i) any "person" (as defined in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Mead representing 25 percent or more of the combined voting power of Mead's then outstanding securities;
(ii) during any period of 2 consecutive years (not including any period prior to the date of adoption of this restated Plan) there shall cease to be a majority of the Board of Directors of Mead ("the Board") comprised as follows: individuals who at the beginning of such period constitute the Board and any new director or directors whose election by the Board or nomination for election by Mead's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved; or
(c) either:
(i) the shareholders of Mead approve a merger or consolidation of Mead with any other corporation, other than a merger or consolidation which would result in the voting securities of Mead outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) at least 80 percent of the combined voting power of the voting securities of Mead or such surviving or parent entity outstanding immediately after such merger or consolidation; or
(ii) the shareholders of Mead approve a plan of complete liquidation of Mead or an agreement for the sale or disposition by Mead of all or substantially all of Mead's assets.
Participant or Beneficiary has experienced an Unforeseeable Emergency shall be made:
(a) in the case of a Participant employed, or last employed, by an Employer as other than an elected officer of the Employer and his Beneficiary, the Chairperson of the Committee; and
(b) in the case of a Participant employed, or last employed, by an Employer as an elected officer of the Employer and his Beneficiary, the Committee.
The provisions of Section 11 of the Plan shall not be applicable with respect to any determination made pursuant to this subsection 10.4.
(a) the provisions of the Plan upon which the resolution was based; and
(b) an explanation of this claims procedure.
If the Plan Administrator rejects a Claimant's application for failure to furnish certain necessary materials or information, the written notice to the Claimant will explain what additional material is needed and why, and advise the Claimant that he may refile a proper application. In the event that the Plan Administrator fails to take any action on the Claimant's initial application within 90 days after receipt, the application will be deemed
denied, and the Claimant's appeal rights under subsection 11.2 will be in effect as of the end of such period.
FIRST AMENDMENT
TO
THE MEAD CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
WHEREAS The Mead Corporation ("Mead") heretofore established The Mead Corporation Executive Capital Accumulation Plan (the "Plan") and subsequently amended the Plan; and
WHEREAS Mead desires to further amend the Plan pursuant to the power reserved to Mead's Board of Directors by subsection 12.1 of the Plan;
NOW, THEREFORE, the Plan is hereby amended, effective as of June 24, 1998, as follows:
1. Subsection 1.4 of the Plan is amended to read, in its entirety, as follows:
2. The last sentence of subsection 10.3 shall be replaced, in its entirety, by the following:
"For purposes of the Plan, a 'Change in Control' shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
"(i) date of expiration of a Tender Offer (other than an offer by Mead), if the offeror acquires Shares pursuant to such Tender Offer;
"(ii) the date of approval by the shareholders of Mead of a definitive agreement: (x) for the merger or consolidation of Mead or any direct or indirect subsidiary of Mead into or with another corporation, other than (l) a merger or consolidation which would result in the voting securities of Mead outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of Mead, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of Mead, either by remaining outstanding if Mead continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of Mead or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of Mead (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of Mead (not including in the securities Beneficially Owned by such Person any securities acquired directly from Mead or its Affiliates) representing 25% or more of the combined voting power of Mead's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of Mead, other than a sale or disposition by Mead of all or substantially all of Mead's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of Mead in substantially the same proportions as their ownership of Mead immediately prior to such sale or disposition;
"(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of Mead (not including in the securities beneficially owned by such Person any securities acquired directly from Mead or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described
in clause (x)(l) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of Mead and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
"(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Mead) who were elected, or were nominated for election, by Mead's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
"Notwithstanding the foregoing, a 'Change in Control' shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of Mead immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of Mead immediately following such transaction or series of transactions.
"'Affiliate' shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
"'Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the Exchange Act.
"'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended from time to time.
"'Person' shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) Mead or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Mead or
any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of Mead in substantially the same proportions as their ownership of stock of Mead.
"'Shares' shall mean shares of common stock, without par value, of The Mead Corporation.
"'Tender Offer' shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time."
Second Amendment to
THE MEAD CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
WHEREAS, The Mead Corporation maintains The Mead Corporation Supplemental Executive Retirement Plan (the "Plan") and has previously amended the Plan;
WHEREAS, further amendment of the Plan is now deemed to be desirable;
NOW, THEREFORE, the Plan be, and it hereby is, amended, effective August 28, 2001, as follows:
1. Subsection 10.3 of the Plan is amended by replacing the first three sentences thereof with the following:
"Upon the occurrence of a Change in Control of Mead, the accrued benefit of an employee who is a Participant on the date of the Change in Control (and the benefit which would have been accrued by any other employee who, but for the requirement of paragraph 2.1(c), would have been a Participant on that date, such an employee being treated as a Participant for all purposes of this subsection 10.3 and the last sentence of subsection 10.1 hereof) shall immediately and fully vest; provided, however, that such benefit shall be forfeited pursuant to paragraph 10.2 hereof if the employment of the employee shall be terminated for "Cause" as that term is defined in this Plan immediately prior to the Change in Control. If the employment of a Participant whose benefit has vested in accordance with the immediately preceding sentence is terminated within 24 months after the date of a Change in Control for a reason other than death or Cause (as that term is defined in this Plan immediately prior to the Change in Control), he shall be entitled to receive a 'Termination Benefit,' payable within 30 days after his termination date. A Participant's Termination Benefit is a single lump sum amount equal to the 'Actuarial Present Value' of the amounts that would have been his Plan Benefit if determined as of the date of his termination of employment pursuant to the provisions of the Plan in effect immediately prior to the Change in Control. The Actuarial Present Value of those amounts shall be determined for purposes of this Section by applying the actuarial assumptions and methods being utilized for that purpose under The Mead Retirement Plan on the day prior to the date of the Change in Control. For purposes of computing the amount of the Plan Benefit:
(a) a Participant who has not attained age 55 years on the date of his actual termination of employment will be deemed to have had his employment with the Employers and Affiliates Involuntarily
Terminated on the date of his termination and his Pre-Age 55 Benefit shall be computed pursuant to subsection 5.2 hereof without applying the assumption contained in subsection 5.2(b) but, instead, determining the Other Benefits attributable to Mead Plans based on the Vested Deferred Pension on a Participant's employment termination with the Employers and Affiliates; and
(b) in the case of a Participant terminated on account of becoming Disabled, it shall be assumed that he will continue to be Disabled until he attains age 62 years."
2. Subsection 10.5 of the Plan is amended to read, in its entirety, as follows:
EXECUTED at Dayton, Ohio this 22nd day of January, 2002.
THE MEAD CORPORATION
By:/s/ A. ROBERT ROSENBERGER ------------------------- Its: ATTEST: /s/ PATRICIA C. NORRIS ---------------------- Assistant Secretary |
Exhibit 10.xxxiii
January 1, 2000
Name
Title
The Mead Corporation
Courthouse Plaza N.E.
Dayton, Ohio 45463
Dear Name:
The Mead Corporation (the "Corporation") recognizes that your contribution to the growth and success of the Corporation has been substantial and desires to assure the Corporation of your continued employment. In this connection the Board of Directors of the Corporation (the "Board") recognizes that, as is the case with many publicly held corporations, the possibility of a change in control may exist and that such possibility, the uncertainty and questions which it may raise among management may result in the departure or distraction of management personnel to the detriment of the Corporation and its stockholders.
The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Corporation's management, including yourself, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a change in control of the Corporation.
In order to induce you to remain in the employ of the Corporation, the
Corporation agrees that you shall receive the severance benefits set forth in
Section 4 hereof in the event your employment with the Corporation is terminated
subsequent to a "Change in Control of the Corporation" (as defined in Section 2
hereof) under the circumstances described below.
(a) No benefits shall be payable hereunder unless there shall have been a Change in Control of the Corporation, as set forth below. For purposes of this Agreement, a "Change in Control of the Corporation" shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
(i) date of expiration of a Tender Offer (other than an offer by the Corporation), if the offeror acquires Shares pursuant to such Tender Offer;
(ii) the date of approval by the shareholders of the Corporation of a definitive agreement: (x) for the merger or consolidation of the Corporation or any direct or indirect subsidiary of the Corporation into or with another corporation, other than (1) a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of the Corporation, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of the Corporation,
either by remaining outstanding if the Corporation continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of the Corporation or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of the Corporation, other than a sale or disposition by the Corporation of all or substantially all of the Corporation's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale or disposition;
(iii) (x) any Person is or becomes the Beneficial Owner of 20% or more of the voting power of the then outstanding securities of the Corporation (not including in the securities beneficially owned by such Person any securities acquired directly from the Corporation or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x) (1) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of the Corporation and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term in defined in Chapter 1701 of the Ohio Revised Code); and
(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Corporation) who were elected, or were nominated for election, by the Corporation's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Corporation immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Corporation immediately following such transaction or series of transactions.
Terms used in this Section 2 have the following meanings:
"Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the 1934 Act.
"Beneficial Owner" shall have the meaning defined in Rule 13d-3 under the 1934 Act.
"Person" shall have the meaning given in Section 3(a)(9) of the 1934 Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Corporation or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the shareholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation.
"Tender Offer" means a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the 1934 Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time.
(b) For purposes of this Agreement, a "Potential Change in Control of the Corporation" shall be deemed to have occurred if (i) the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control of the Corporation, (ii) any person (including the Corporation) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control of the Corporation, (iii) any person is declared to be an "Adverse Person" by the Board under the Rights Agreement dated November 9, 1996; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control of the Corporation has occurred. You agree that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control of the Corporation, you will remain in the employ of the Corporation until the earliest of (i) a date which is six (6) months from the occurrence of such Potential Change in Control of the Corporation, (ii) the termination by you of your employment by reason of Disability or Retirement (at your normal retirement date), as defined in Section 3(a), or (iii) the occurrence of a Change in Control of the Corporation.
part shall be deemed "willful" unless done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Corporation.
(i) the assignment to you of duties which are substantially inconsistent with your present duties, responsibilities and status as the Title of the Corporation or a substantial reduction or alteration in the nature or status of your responsibilities from those in effect as of the date hereof;
(ii) a reduction by the Corporation in your base salary as in effect on the date hereof or as the same shall be increased from time to time ("Base Salary");
(iii) the Corporation's requiring you to be based at a location in excess of twenty-five (25) miles from the location where you are currently based;
(iv) the failure by the Corporation to continue in effect any of the Corporation's employee benefit plans, policies, practices or arrangements, including, but not limited to, those plans, policies and arrangements maintained solely for the benefit of key management personnel, in which you participate, or the failure by the Corporation to continue your participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of your participation relative to other participants, as existed as of the date hereof; provided, however, that such plans, policies or arrangements are not replaced by one or more alternative or substitute plans, policies, or arrangements providing substantially equivalent benefits in the aggregate;
(v) the failure of the Corporation to obtain a satisfactory agreement from any successor to the Corporation to assume and agree to perform this Agreement, as contemplated in Section 5 hereof; and
(vi) any purported termination by the Corporation of your employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Subsection (d) below, and for purposes of this Agreement, no such purported termination shall be effective.
Your right to terminate your employment pursuant to this Subsection (c) shall not be affected by your incapacity due to physical or mental illness. Your continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.
(a) During any period that you fail to perform your full-time duties with the Corporation as a result of incapacity due to physical or mental illness, you shall continue to receive your Base Salary at the rate in effect at the commencement of any such period, until your employment is terminated pursuant to Section 3(a) hereof. Thereafter, your benefits shall be determined in accordance with the Corporation's retirement, insurance and other applicable programs and plans then in effect.
(b) If your employment shall be terminated by the Corporation for Cause or by you other than for Good Reason, the Corporation shall pay you your full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given or on the Date of Termination if no Notice of Termination is required hereunder, plus all other amounts to which you are entitled under any compensation plan of the Corporation at the time such payments are due, and the Corporation shall have no further obligations to you under this Agreement.
(c) If your employment terminates by reason of your Retirement, or by reason of your death, your benefits shall be determined in accordance with the Corporation's retirement, survivor's benefits, insurance and other applicable programs and plans, then in effect.
(d) If your employment by the Corporation shall be terminated (i) by the Corporation other than for Cause, Retirement or Disability or (ii) by you for Good Reason, you shall be entitled to the benefits (the "Severance Payments") provided below, in lieu of the benefits provided by the Corporation's general severance program:
(i) the Corporation shall pay you your full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, or the Date of Termination where no Notice of Termination is required hereunder;
(ii) the Corporation will pay as severance benefits to you, not later than the fifth day following the Date of Termination, a lump sum severance payment equal to two times the sum of your (A) annual Base Salary in effect immediately prior to the occurrence of the circumstances giving rise to such termination, and (B) the greater of (1) your most recent annual award under the Corporation's long-term and short-term incentive plans as in effect from time to time or (2) the target payout under such plan in respect of the year in which such termination occurs;
(iii) in lieu of shares of common stock of the Corporation ("Option Shares") issuable upon exercise of outstanding options ("Options"), if any, granted to you under the Corporation's stock option plans, together with any additional, substitute or successor option program or plan as may be in effect from time to time (which Options shall be cancelled upon the making of the payment referred to below), you shall receive an amount in cash equal to the product of (A) the higher of the closing price of Option Shares reported on the New York Stock Exchange on the Date of Termination or the highest per share price for Option Shares actually paid in connection with any Change in Control of the Corporation, over the per share exercise price of each Option held by you, times (B) the number of Option Shares covered by each such Option (the "Product Amount"); provided, however, that, if payment of the Product Amount in cash would cause a transaction of the Corporation intended by the Corporation to qualify for "pooling-of-interests" accounting not to qualify for such accounting, payment of the Product Amount shall be made in shares of the stock of the company which is the resulting or surviving
company in such transaction which are at the time of closing of such transaction of equal value to the Product Amount.
(iv) for a twenty-four (24) month period after the Date of Termination, the Corporation will arrange to provide you at the Corporation's expense with benefits under the Corporation's life insurance, medical and dental plans, or benefits substantially similar to the benefits you were receiving immediately prior to the Notice of Termination under such plans and to provide you, at your expense, with benefits under the Corporation's accident and disability plans, if the respective insurance carrier agrees to do so; but benefits otherwise receivable by you pursuant to this Paragraph (iv) shall be reduced to the extent comparable benefits are actually received by you during the twenty-four (24) month period following your termination, and any such benefits actually received by you shall be reported to the Corporation; and
(v) for a twelve (12) month period after the Date of Termination, the Corporation will provide you with outplacement counseling with an independent professional at the Corporation's expense.
(e) Notwithstanding the provisions of Subsection (d) hereof, if, in the opinion of tax counsel selected by the Corporation's independent auditors,
(i) any payments or benefits which would otherwise be received by you, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Corporation, any person whose actions result in a change in control of the Corporation or any person affiliated with the Corporation or such person, constitute "parachute payments" (such payments, including the Severance Payments, being hereinafter called "Total Payments") within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) the aggregate present value of the Total Payments would exceed 2.99 times your "base amount," as defined in Section 280G(b)(3) of the Code, then, in lieu of the Severance Payments, the Corporation shall pay to you under this Subsection, no later than the fifth day following the Date of Termination, a lump sum amount such that the aggregate present value of the Total Payments is equal to 2.99 times your base amount.
For purposes of the preceding paragraph, your base amount and the value of the Total Payments shall be determined by the Corporation's independent auditors in accordance with the principles of Section 280G of the Code and based upon the advice of the tax counsel referred to herein.
(f) The payments provided for in Subsections (d) and (e) above shall be made not later than the fifth day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Corporation shall pay to you on such day an estimate as determined in good faith by the Corporation of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. Notwithstanding the immediately preceding sentence, in the event that payment of the amount described in Section 4(d)(iii) is required by the proviso in such Section to be made in shares of stock, the calculation of the number of such shares and the payment of such shares may be delayed by the Corporation beyond the thirty-day payment deadline, if such delay is determined in good faith by the Corporation to be necessary and payment is made as soon as the number of such shares can be determined. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Corporation to you payable on the fifth day after demand by the Corporation (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
(g) The Corporation shall also pay to you all legal fees and expenses incurred by you as a result of such termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder).
(h) You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination, or otherwise.
(a) The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Corporation or of any division or subsidiary thereof employing you to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. Failure of the Corporation to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Corporation in the same amount and on the same terms as you would be entitled hereunder if you terminated your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination.
(b) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement, to your devisee, legatee or other designee or, if there is not such designee, to your estate.
right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement.
If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Corporation the enclosed copy of this letter which will then constitute our agreement on this subject.
Sincerely,
THE MEAD CORPORATION
By _______________________________
Name
Title
Agreed to this _____ day
of _______, ____.
By ___________________________
Name
Title
AMENDMENT TO THE
LETTER AGREEMENT
This Amendment to the Letter Agreement dated as of January 1, 2000 (the "Agreement") between The Mead Corporation, an Ohio corporation (the "Corporation"), and ____________________is made as of June 22, 2000.
1. Section 4(d)(ii) of the Agreement is hereby amended in its entirety, to read as follows:
(ii) the Corporation will pay as severance benefits to you, not later
than the fifth day following the Date of Termination, a lump sum
severance payment equal to two and one-half (2.5) times the sum of
your (A) highest rate of annualized Base Salary in effect at any time
up to and including the Date of Termination, and (B) the greater of
(x) the highest amount of the actual annual incentive and long-term
incentive you received under the Mead Annual Incentive Plan and the
Mead Long-Term Incentive Plan for the three plan years immediately
preceding the year in which your Date of Termination occurred, and (y)
the highest amount of your target annual incentive and your target
long-term incentive established for the Mead Annual Incentive Plan and
the Mead Long-Term Incentive Plan for the three plan years immediately
preceding the year in which your Date of Termination occurred (or, if
higher, your target annual incentive and your target long-term
incentive established for the Mead Annual Incentive Plan and the Mead
Long-Term Incentive Plan for the plan year in which your Date of
Termination occurred);
2. Section 4(d) of the Agreement is hereby amended by re-designating Subsection (v) as Subsection (vi) and by adding the following new Subsection (v) to read as follows:
(v) In addition to the retirement benefits to which you are entitled under each Pension Plan or any successor plan thereto, the Corporation shall pay you a lump sum amount in cash, calculated under the assumption that at such Date of Termination you had an additional three (3) years of age and service credits, provided that your age and service will not be treated as extending beyond your 65th birthday, with Compensation (as defined in such Pension Plan) for each of such three (3) additional years to be treated at (A) your highest rate of annualized Base Salary in effect at any time up to and including the Date of Termination, and (B) the greater of (x) the highest amount of the actual annual incentive you received under the Mead Annual Incentive Plan for the three plan years immediately preceding the year in which your Date of Termination occurred, and (y) the highest amount of your target annual incentive established for the Mead Annual Incentive Plan for the three plan years immediately preceding the year in which your Date of Termination occurred (or, if higher, the target annual incentive
established for the Mead Annual Incentive Plan for the plan year in
which your Date of Termination occurred). For purposes of this Section
4(d)(v), "Pension Plan" shall mean any tax-qualified pension or non-
qualified supplemental pension or excess benefit pension plan
maintained by the Corporation and any other plan or agreement entered
into between you and the Corporation which is designed to provide you
with retirement benefits. The three (3) additional years of age and
service shall be used for purposes of all calculations under this
section, including but not limited to the early retirement reduction
calculation so as to offset such reduction. All calculations under
this Agreement with respect to your benefits shall be made without
regard to any amendments to any Pension Plan made subsequent to a
Change in Control which adversely affect in any manner the computation
of retirement benefits hereunder.
3. Section 4 of the Agreement is hereby amended by adding the following new subsection at the end thereof:
(i) Except as provided in Section 4(e), the Corporation's obligation to make the payments and the arrangements provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Corporation may have against you or anyone else. All amounts payable by the Corporation hereunder shall be paid without notice or demand.
4. Section 4(e) of the Agreement is hereby amended, in its entirety, to read as follows:
(i) Whether or not you become entitled to the Severance Payments, if
any of the payments or benefits received or to be received by you in
connection with a Change in Control or termination of your employment
(whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Corporation, any Person whose
actions result in a Change in Control or any Person affiliated with
the Corporation or such Person) (all such payments and benefits,
excluding the Gross-Up Payment (as hereinafter defined), being
hereinafter referred to as the "Total Payments") will be subject to
the excise tax (the "Excise Tax") referred to in Section 4999 of the
Internal Revenue Code (the "Code"), or any similar tax that may
hereafter be imposed, the Corporation shall pay you in cash an
additional amount (the "Gross-Up Payment") such that the net amount
retained by you, after deduction of any Excise Tax upon the Total
Payments and any federal, state and local income taxes, employment
taxes, and Excise Tax upon the Gross-Up Payment provided for by this
Section 4(e) (including FICA), shall be equal to the Total Payments;
(ii) For purposes of determining the potential impact of the Excise
Tax and the amount of such Excise Tax, (A) all of the Total Payments
shall be treated as "parachute payments" (within the meaning of
Section 280G(b)(2) of the Code)
unless, in the opinion of tax counsel ("Tax Counsel") reasonably
acceptable to you and selected by the accounting firm which was,
immediately prior to the Change in Control, the Corporation's
independent auditor (the "Auditor"), such payments or benefits (in
whole or in part, and whether received or to be received in the
future) do not constitute parachute payments, including by reason of
Section 280G(b)(4)(A) of the Code, (B) all "excess parachute payments"
within the meaning of Section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax unless, in the opinion of Tax Counsel,
such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code) in excess of the Base
Amount (within the meaning of Section 280G(b)(3) of the Code)
allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (C) the value of any noncash benefits
or any deferred payment or benefit shall be determined by the Auditor
in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code. For purposes of determining the amount of the Gross-Up
Payment, you shall be deemed to pay federal income tax at the highest
marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state or locality of your
residence on the Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment is calculated
for purposes of this Section (e)), net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes;
(iii) In the event that the Excise Tax is subsequently determined to
exceed the amount taken into account hereunder in calculating the
Gross-Up Payment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up
Payment), the Corporation shall make an additional Gross-Up Payment in
respect to such excess (plus any interest, penalties or additions
payable by you with respect to such excess) within five (5) business
days following your payment of such excess. If, after receipt of the
Gross-Up Payment, you become entitled to receive any refund with
respect to a determination that there was an overpayment of any Excise
Tax or income tax with respect to the Gross-Up Payment, including
interest and penalties with respect thereto, you shall, within five
(5) business days following receipt of such refund, promptly pay to
the Corporation the amount of such refund (together with any interest
paid or credited thereon (after taxes applicable thereto)).
(iv) You shall notify the Corporation in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Corporation of an additional Gross-Up Payment. Such notification shall be given no later than ten (10) business days after the Internal Revenue Service issues to you either a written notice proposing imposition of the Excise Tax or a statutory notice of deficiency with respect thereto, and you shall apprise the Corporation of the nature of such claim and the date on which such claim is requested to be paid. You shall
not pay such claim prior to the expiration of the thirty (30) day period following the date on which you give such notice to the Corporation (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Corporation notifies you in writing prior to the expiration of such period that it desires to contest such claim, you shall: (w) give the Corporation any information reasonably requested by the Corporation relating to such claim; (x) take such action in connection with contesting such claim as the Corporation shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Corporation; (y) cooperate with the Corporation in good faith in order to effectively contest such claim; and (z) permit the Corporation to participate in any proceedings relating to such claim. Provided, however, that the Corporation shall directly bear and pay all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax, income and employment tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing, the Corporation shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim.
Exhibit 10.xxxiv
This TRUST AGREEMENT (the "Trust"), dated August 27, 1996, is by and between The Mead Corporation, an Ohio corporation (the "Company"), and Key Trust Company of Ohio, N.A., a national banking association (the "Trustee"), and is a restatement in its entirety, and a continuation of, a trust established January 9, 1987, by and between the Company and Society Bank, National Association, a national banking association.
WHEREAS, the Company is obligated under The Mead Supplemental Executive Retirement Plan, The Mead Corporation Incentive Compensation Election Plan, The Mead Corporation Deferred Compensation Plan for Directors, The Mead Excess Benefit Plan, and The Mead Corporation Directors Retirement Plan (together, the "Plans", and singly, the "Plan") to make certain deferred payments to certain of the Company's present and former directors and executives (the "Executives"); and
WHEREAS, the aforesaid obligations of the Company are not funded or otherwise secured and the Company has agreed to assure that the future payment of said deferred payments will not be improperly withheld in the event that a "Change in Control" of the Company (as defined in Article III hereof) should occur; and
WHEREAS, for purposes of assuring that such deferred payments will not be improperly withheld, the Company desires to deposit with the Trustee, subject only to the claims of the Company's existing or future general creditors, amounts of cash or marketable securities and certain insurance policies sufficient to provide for such payments as they become due and payable;
NOW, THEREFORE, in consideration of the mutual agreements contained herein and for other good valuable consideration, the parties hereto agree as follows:
ARTICLE I
ARTICLE II
(b) Upon the occurrence of a Potential Change in Control, as defined in
Section 3.02 hereof, the Company shall deliver to the Trustee to be held in
trust hereunder an additional amount of cash (or marketable securities having a
fair market value equal to such amount, or some combination thereof) (the
"Additional Transfer") representing (i) ten million dollars ($10,000,000), the
purpose of which is to provide a fund from which any attorneys' fees and
expenses incurred in defending the Trust and the Trustee's payment of the
Executives' accrued benefits under the Plans may be paid, plus (ii) the present
value (determined at a discount rate of five percent (5%) per annum) of the sum
of the amounts which will be sufficient to provide for the Company's obligations
to pay the Executives' accrued benefits under the Plans.
(c) The payments by the Company pursuant to Section 2.01(b) and (d) hereof shall be accompanied by a schedule of the individual Executives for whose accounts such payment is being made (the "Payment Schedule" described in Section 4.02(a) hereof), which sets forth the amounts delivered in respect of each such Executive in respect of each Plan.
(d) At six-month intervals commencing six (6) months after the delivery
of an Additional Transfer pursuant to Section 2.01(b) hereof, unless the Trust
Corpus shall theretofore have been released pursuant to Article IV or Article VI
hereof, the Company shall recalculate the Additional Transfer which would be
required to be delivered pursuant to Section 2.01(b) as of the end of the month
immediately preceding such six-month interval date. If the amount so calculated
exceeds the fair market value of the then Trust Corpus (as defined in Section
2.02(a) hereof), the Company shall promptly (and in no event later than seven
(7) days from the date of such six-month interval date) pay to the Trustee an
amount in cash (or marketable securities or any combination thereof) equal to
such excess.
(i) investments in direct obligations of the United States of America or agencies of the United States of America or obligations unconditionally and fully guaranteed as to principal and interest by the United States of America, in each case maturing within one year or less from the date of acquisition;
(ii) investments in negotiable certificates of deposit (in each case maturing within one (1) year or less from the date of acquisition) issued by a commercial bank organized and existing under the laws of the United States of America or any state thereof having a combined capital and surplus of at least one billion dollars ($1,000,000,000); or
(b) The Trust is intended to be a grantor trust within the meaning of
Section 671 of the Internal Revenue Code of 1986, as amended. All interest and
other income earned on the investment of the Trust Corpus shall be accumulated
and added at least annually to the Trust Corpus, thereafter constituting part of
such Trust Corpus.
(c) All losses of income or principal in respect of, and expenses
(including, as provided in Section 5.01(g) hereof, any expenses of the Trustee)
charged against, the Trust Corpus shall be for the account of the Company and
the Company shall be obligated to reimburse the Trust Corpus promptly for any
loss in principal amount of, or expense charged against, the Trust Corpus.
ARTICLE III
(i) any "person" (as defined in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company's representing twenty-five percent (25%) or more of the combined voting power of the Company's then outstanding securities;
(ii) during any period of two (2) consecutive years (not including any period prior to the execution of this Agreement) there shall cease to be a majority of the Board comprised as follows: individuals who at the beginning of such period constitute the Board and any new director(s) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved; or
(iii) (x) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation, except a merger or consolidation which would result in the voting securities of the Company outstanding immediately before the merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) at least eighty percent (80%) of the combined voting power of the voting securities of the Company or the surviving or parent entity outstanding immediately after such merger or consolidation, unless the Board of Directors determines that such situation does not constitute a Change in Control, or (y) the shareholders of the Company approve a plan of complete litigation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company's assets.
ARTICLE IV
(a) The Company shall deliver to the Trustee, contemporaneously with any Additional Transfer pursuant to Section 2.01(b) hereof, a schedule (the "Payment Schedule") indicating the amounts payable in respect of each Executive, or providing a formula or instructions acceptable to the Trustee for determining the amounts so payable, and the time of commencement for payment of such amounts. The Payment Schedule shall include instructions as to the amount of interest accruing under the Plans and such instructions may be revised from time to time to the extent so provided under the Plans. The Payment Schedule, as it pertains to each Executive, also shall be delivered by the Company to such Executive. A modified Payment Schedule shall be delivered by the Company to the Trustee and to each Executive (as it pertains to such Executive) at each time that additional amounts are required to be paid by the Company to the Trustee under Section 2.01(d) hereof and upon the occurrence of any event, such as early retirement of
an Executive, requiring a modification of the Payment Schedule. Except as otherwise provided herein, the Trustee shall make payments to the Executives in accordance with such Payment Schedule.
(b) In the event that an Executive reasonably believes that the Payment Schedule, as modified, does not properly reflect the amount payable to such Executive or the time or form of payment from the Trust Corpus in respect of any Plan, such Executive shall be entitled to deliver to the Trustee written notice (the "Executive's Notice") setting forth payment instructions for the amount the Executive believes is payable under the relevant terms of such Plan. The Executive shall also deliver a copy of the Executive's Notice to the Company within three (3) business days of the delivery to the Trustee. Unless the Trustee receives written objection from the Company within ten (10) business days after receipt by the Trustee of such notice, the Trustee shall make the payment in accordance with the payment instructions set forth in the Executive's Notice.
(c) The Trustee shall be permitted to withhold from any payment due to an Executive hereunder the amount required by law to be so withheld under Federal, state and local wage withholding requirements or otherwise, and shall pay over to the appropriate government authority the amounts so withheld. The Trustee may rely on instructions from the Company as to any required withholding and shall be fully protected under Section 5.01(g) hereof in relying on such instructions.
(d) Except as otherwise provided herein, in the event of any final determination by the Internal Revenue or a court of competent jurisdiction, which determination is not appealable or the time for appeal or protest of which has expired, or the receipt by the Trustee of a substantially unqualified opinion of tax counsel selected by the Trustee, which determination determines, or which opinion opines, that the Executives or any particular Executive, is subject to Federal income taxation on amounts held in Trust hereunder prior to the distribution to the Executives or Executive of such amounts, the Trustee shall, on receipt by the Trustee of such opinion or notice of such determination, pay to each Executive the portion of the Trust Corpus includible in such Executive's Federal gross income.
(i) The Company shall make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver, liquidator, sequestrator, or any trustee for it or a substantial part of its assets, or shall commence any case under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or liquidation law or statute of any jurisdiction (Federal or state), whether now or hereafter in effect; or if there shall have been filed any such petition or application, or any such case shall have been commenced against it, in which an order for relief is entered or which remains undismissed; or the Company by any act or omission shall indicate its consent to, approval of or acquiescence in any such petition, application or case or order for relief or to the appointment
of a custodian, receiver or any trustee for it or any substantial part of any of its property, or shall suffer any such custodianship, receivership, or trusteeship to continue undischarged; or
(ii) The Company shall generally not pay its debts as such debts become due or shall cease to pay its debts in the ordinary course of business; or
(iii) The sums of the Company's debt is greater than all of its property at a fair valuation; or
(iv) The present saleable value of the Company's assets is less than the amount that would be required to pay the probable liability on its existing debts as they become absolute and matured.
ARTICLE V
(b) If, pursuant to Section 3.02 hereof or otherwise, all or any part of the Trust Corpus is at any time attached, garnished, or levied upon by any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by a court affecting such property or any part thereof, then and in any such events the Trustee is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree, and it shall not be liable to the Company (or any of its subsidiaries) or any Executive by reason of such compliance even though such order, writ, judgment or decree subsequently may be reversed, modified, annulled, set aside or vacated.
(c) The Trustee shall maintain such books, records and accounts as may be necessary for the proper administration of the Trust Corpus, including, without limitation, as provided in Section 2.01 hereof, and shall render to the Company, or prior to each January 31 following the date of this Trust until the termination of this Trust (and on the date of such termination), an accounting with respect to the Trust Corpus as of the end of the then most recent calendar year (and as of the date of such termination). The Trustee will at all times maintain a separate bookkeeping account for each Executive to which it will credit each amount delivered by the Company to the Trustee with respect to such Executive. Upon the written request of an Executive or the Company, the Trustee shall deliver to such Executive or the Company, as the case may be, a written report setting forth the amount held in the Trust for such Executive (or each Executive if such request is made by the Company) and a record of the contributions made with respect thereto by the Company.
(d) The Trustee shall not be liable for any act taken or omitted to be taken hereunder if taken or omitted to be taken by it in good faith. The Trustee shall also be fully protected in relying upon any notice given hereunder which it in good faith believes to be genuine and executed and delivered in accordance with this Trust.
(e) The Trustee may consult with legal counsel to be selected by it, and the Trustee shall not be liable for any action taken or suffered by it in accordance with the advice of such counsel.
(f) The Trustee shall be reimbursed by the Company for its reasonable expenses incurred in connection with the performance of its duties hereunder and shall be paid reasonable fees for performance of such duties in the manner provided by Section 2.02(c) hereof and paragraph (g) of this Section 6.01.
(g) The Company agrees to indemnify and hold harmless the Trustee from
and against any and all damages, losses, claims or expenses as incurred
(including expenses of investigation and fees and disbursements of counsel to
the Trustee and any taxes imposed on the Trust Corpus or income of the Trust)
arising out of or in connection with the performance by the Trustee of its
duties hereunder. Any amount payable to the Trustee under paragraph (V) of this
Section 5.01 or this paragraph (g) and not previously paid by the company
pursuant to Section 2.02(c) hereof shall be paid by the Company promptly upon
demand therefor by the Trustee or, if the Trustee so chooses in its sole
discretion, from the Trust Corpus. In the event that payment is made hereunder
to the Trustee from the Trust Corpus. the Trustee shall promptly notify the
Company in writing of the amount of such payment. The
Company agrees that, upon receipt of such notice, it will deliver to the Trustee
to be held in the Trust an amount in cash (or in marketable securities or in
some combination thereof) equal to any payments made from the Trust Corpus to
the Trustee pursuant to paragraph (f) of this Section 5.01 or this paragraph
(g). The failure of the Company to transfer any such amount shall not in any way
impair the Trustee's right to indemnification, reimbursement and payment
pursuant to paragraph (f) of this Section 5.01 or this paragraph (g).
ARTICLE VI
ARTICLE VII
(b) This Trust shall be governed by and construed in accordance with the laws of the State of Ohio, other than and without reference to any provisions of such laws regarding choice of laws or conflict of laws.
(c) In the event that any provision of this Trust or the application thereof to any person or circumstances shall be determined by a court of proper jurisdiction to be invalid or unenforceable, shall not be affected thereby, and each provision of this Trust shall be valid and enforced to the fullest extent permitted by law.
If to the Company: The Mead Corporation World Headquarters Courthouse Plaza Northeast Dayton, Ohio 45463 Attention: Secretary If to the Trustee: Key Trust Company of Ohio, N.A. 34 North Main Street Dayton, Ohio 45402 Attention: Senior Vice President Trust Department |
If to an Executive, to the address of such Executive as listed next to his name on Schedule A hereto.
A notice shall be deemed received upon the date of delivery if given personally or, if given by mail, upon the receipt thereof.
IN WITNESS WHEREOF, the parties have executed this Trust as of the date first written above.
THE MEAD CORPORATION
KEY TRUST COMPANY OF OHIO, N.A.
WHEREAS, the Benefit Trust Agreement was established by trust agreement dated August 27, 1996, by and between The Mead Corporation, an Ohio corporation (the "Company") and Key Trust Company of Ohio, N.A., a national banking association (the "Trustee"), as a restatement in its entirety and continuation of a trust established January 9, 1987, by and between the Company and Society Bank, National Association, a national banking association; and
WHEREAS, it is desirable to amend the Benefit Trust Agreement;
NOW, THEREFORE, the Benefit Trust Agreement is hereby amended, effective as of June 24, 1998, as follows:
1. The second paragraph thereof is amended to read, in its entirety, as follows:
"WHEREAS, the Company is obligated under The Mead Supplemental Executive Retirement Plan, The Mead Corporation Incentive Compensation Election Plan, The Mead Corporation Deferred Compensation Plan for Directors, The Mead Corporation Section 415 Excess Benefit Plan, The Mead Corporation Excess Earnings Benefit Plan, The 1985 Supplement to The Mead Corporation Incentive Compensation Election Plan, The 1985 Supplement to The Mead Corporation Deferred Compensation Plan for Directors, The Mead Corporation Executive Capital Accumulation Plan, The Mead Corporation Directors Capital Accumulation Plan and The Mead Corporation Directors Retirement Plan, as each such plan may be amended from time to time (together with any prior version thereof or predecessor plan thereto under which benefits remain payable from time to time, the 'Plans', and singly, the 'Plan') to make certain deferred payments to certain of the Company's present and former directors and executives (together, the "Executives"); and"
2. Section 3.01 of the Plan is amended to read, in its entirety, as follows:
(i) date of expiration of a Tender Offer (as defined below), other than an offer by the Company, if the offeror acquires Shares (as defined below) pursuant to such Tender Offer;
(ii) the date of approval by the shareholders of the Company of a definitive agreement: (x) for the merger or consolidation of the Company or any direct or indirect subsidiary of the Company into or with another corporation, other than (1) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of the Company, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of the Company, either by remaining outstanding if the Company continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of the Company, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition;
(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x)(l) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of the Company and a
majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected, or were nominated for election, by the Company's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
"'Affiliate' shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
"'Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the Exchange Act.
"'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended from time to time.
"'Person' shall have the meaning given in Section 3 (a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company."
"'Shares' shall mean shares of common stock, without par value, of The Mead Corporation.
"'Tender Offer' shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time."
IN WITNESS WHEREOF, the parties have executed this First Amendment to the Benefit Trust Agreement as of the effective date written above.
THE MEAD CORPORATION
By /s/ Sue K. McDonnell ---------------------------- Name: Sue K. McDonnell Title: Vice President |
KEY TRUST COMPANY OF OHIO, N.A.
By /s/ Janice L. Culver ---------------------------- Name: Janice L. Culver Title: Senior Vice President |
WHEREAS, the Benefit Trust Agreement was established by trust agreement dated August 27, 1996, by and between The Mead Corporation, an Ohio corporation (the "Company"),and Key Trust Company of Ohio, N.A., a national banking association (the "Trustee"), as a restatement in its entirety and continuation of a trust established January 9, 1987, by and between the Company and Society Bank, National Association, a national banking association;
WHEREAS, the Benefit Trust Agreement was amended as of June 24, 1998;
WHEREAS, pursuant to Section 6.02 of the Benefit Trust Agreement, the terms and provisions of the Benefit Trust Agreement may be modified or amended with the written consent of the parties hereto; and
WHEREAS, it is desirable to further amend the Benefit Trust Agreement;
NOW, THEREFORE, the Benefit Trust Agreement, as amended, is hereby further amended, effective as of October 28, 2000, as follows:
1. The second paragraph of the Benefit Trust Agreement is amended to read, in its entirety, as follows:
"WHEREAS, the Company is obligated under The Mead Supplemental Executive
Retirement Plan, The Mead Corporation Incentive Compensation Election Plan, The
Mead Corporation Deferred Compensation Plan for Directors, The Mead Corporation
Section 415 Excess Benefit Plan, The Mead Corporation Excess Earnings Benefit
Plan, The 1985 Supplement to The Mead Corporation Incentive Compensation
Election Plan, The 1985 Supplement to The Mead Corporation Deferred Compensation
Plan for Directors, The Mead Corporation Executive Capital Accumulation Plan,
The Mead Corporation Directors Capital Accumulation Plan, The Mead Corporation
Directors Retirement Plan, Hilroy Excess Earnings Plan, and all Change in
Control Severance Agreements with Executives and Staff directors, as each such
plan or agreement may be amended from time to time (together with any prior
version thereof or predecessor plan thereto under which benefits remain payable
from time to time, the `Plans', and singly, the `Plan') to make certain deferred
payments to certain of the Company's present and former directors and executives
(together, the "Executives"); and"
2. Section 2.01(b) of the Benefit Trust Agreement is amended to read, in its entirety, as follows:
"(b) Upon the occurrence of a Potential Change in Control, as defined in Section 3.02 hereof, the Company shall deliver to the Trustee to be held in trust hereunder an additional amount of cash (or marketable securities having a fair market value equal to such amount, or one or more insurance policies with a fair market value equal to at least 90% of the cash surrender value of the applicable policy, or some combination thereof) (the "Additional Transfer") representing (i) ten million dollars ($10,000,000), the purpose of which is to provide a fund from which any attorneys' fees and expenses incurred in defending the Trust and the Trustee's payment of the Executives' accrued benefits under the Plans may be paid, plus (ii) the present value (determined at a discount rate of five percent (5%) per annum) of the sum of the amounts which will be sufficient to provide for the Company's obligations to pay the Executives' benefits under the Plans. In the case of any insurance policy delivered to the Trustee, from the date of such delivery to the date of occurrence of a Change in Control, the Trustee shall not take any action with respect to such policy (including, but not limited to, terminating such policy or making any borrowings or payments thereunder) without the prior written consent of the Company."
3. Section 2.01(d) of the Benefit Trust Agreement is amended to read, in its entirety, as follows:
"(d) At six-month intervals commencing six months after the delivery
of an Additional Transfer pursuant to Section 2.01(b) hereof, unless the Trust
Corpus shall theretofore have been released pursuant to Article IV or Article VI
hereof, the Company shall recalculate the Additional Transfer which would be
required to be delivered pursuant to Section 2.01(b) as of the end of the month
immediately preceding such six-month interval date. If the amount so calculated
exceeds the fair market value of the then Trust Corpus (as defined in Section
2.02(a) hereof), the Company shall promptly (and in no event later than seven
(7) days from the date of such six-month interval date) pay to the Trustee an
amount in cash (or marketable securities or insurance policies or any
combination thereof) equal to such excess. If, by reason of the inapplicability
of a particular Change in Control Severance Agreement with an Executive or Staff
director following a Change in Control, the fair market value of the Trust
Corpus exceeds the amount so calculated, the Trustee shall promptly (and in no
event later than seven (7) days from the date of such six-month interval date)
return to the Company an amount in cash (or marketable securities or insurance
policies or any combination thereof) equal to such excess."
IN WITNESS WHEREOF, the parties have executed this Second Amendment to the Benefit Trust Agreement as of the effective date written above.
THE MEAD CORPORATION
By /s/ SUE K. MCDONNELL -------------------------------------- Name: Sue K. McDonnell Title: Vice President, General Counsel and Secretary |
KEY TRUST COMPANY OF OHIO, N.A.
By /s/ JANICE L. CULVER, SENIOR V.P. -------------------------------------- Name: Janice L. Culver CPA Title: Senior Vice President |
WHEREAS, the Benefit Trust Agreement was established by trust agreement dated August 27, 1996, by and between The Mead Corporation, an Ohio corporation (the "Company") and Key Bank, N.A., a national banking association (the "Trustee"), as a restatement in its entirety and continuation of a trust established January 9, 1987, by and between the Company and Society Bank, National Association, a national banking association, and subsequently amended, effective as of June 24, 1998, and October 28, 2000; and
WHEREAS, it is desirable to further amend the Benefit Trust Agreement;
NOW, THEREFORE, the Benefit Trust Agreement, as amended, is hereby further amended, effective as of June 28, 2001, as follows:
1. The second paragraph thereof is amended to read, in its entirety, as follows:
"WHEREAS, the Company is obligated under The Mead Supplemental Executive Retirement Plan, The Mead Corporation Incentive Compensation Election Plan, The Mead Corporation Deferred Compensation Plan for Directors, The Mead Corporation Section 415 Excess Benefit Plan, The Mead Corporation Excess Earnings Benefit Plan, The 1985 Supplement to The Mead Corporation Incentive Compensation Election Plan, The 1985 Supplement to The Mead Corporation Deferred Compensation Plan for Directors, The Mead Corporation Executive Capital Accumulation Plan, The Mead Corporation Directors Capital Accumulation Plan, The Mead Corporation Directors Retirement Plan, The Mead School & Office Products (Canada) Limited Supplemental Employee Retirement Plan, the McSherry Letter dated May 7, 2001, and all Change in Control Severance Agreements with Executives and Staff directors, as each such plan, letter or agreement may be amended from time to time (together with any prior version thereof (except in the case of the McSherry Letter) or predecessor plan thereto under which benefits remain payable from time to time, the 'Plans,' and singly, the 'Plan') to make certain deferred payments to certain of the Company's present and former directors and executives (together, the "Executives"); and "
2. The first phrase of the first sentence of Section 2.01(b) of the Benefit Trust Agreement, "Upon the occurrence of a Potential Change in Control, as defined in Section 3.02 hereof," is amended to read, in its entirety, as follows: "No later than the tenth business day (the "Funding Date") following the occurrence of a Potential Change in Control, as defined in Section 3.02 hereof,".
3. The last clause of the first sentence of Section 6.01 of the Benefit Trust Agreement, "provided, however, that, prior to the occurrence of any Potential Change in Control or Change in Control, the Company, in its sole discretion, may terminate this Trust." is amended to read, in its entirety, as follows: "provided, however, that, prior to the earlier of the Funding Date or any Change in Control, the Company, in its sole discretion, may terminate this Trust; and, provided, further, that the Company, in its sole discretion, may terminate this Trust during the ten-business-day period immediately following any return of the Trust Corpus to the Company pursuant to Section 4.01 hereof."
4. The first sentence of Section 6.02 of the Benefit Trust Agreement is amended to read, in its entirety, as follows:
"Prior to the earlier of the Funding Date or any Change in Control (and also during the ten-business-day period immediately following any return of the Trust Corpus to the Company pursuant to Section 4.01 hereof), this Trust can be amended by an instrument in writing signed on behalf of the parties hereto."
5. The first phrase of the second sentence of Section 6.02 of the Benefit Trust Agreement, "After a Potential Change in Control or Change in Control has occurred," is amended to read, in its entirety, as follows: "On and after the earlier of the Funding Date or any Change in Control (except during the ten- business-day period immediately following any return of the Trust Corpus to the Company pursuant to Section 4.01 hereof),".
IN WITNESS WHEREOF, the parties have executed this Third Amendment to the Benefit Trust Agreement as of the effective date written above.
THE MEAD CORPORATION
By /s/ SUE K. MCDONNELL ------------------------------------------ Name: Sue K. McDonnell Title: Vice President, General Counsel and Secretary |
KEY BANK, N.A.
By /s/ JANICE L. CULVER ------------------------------------------ Name: Janice L. Culver, CPA Title: Senior Vice President |
WHEREAS, the Benefit Trust Agreement was established by trust agreement dated August 27, 1996, by and between The Mead Corporation, an Ohio corporation (the "Company") and Key Bank, N.A., a national banking association (the "Trustee"), as a restatement in its entirety and continuation of a trust established January 9, 1987, by and between the Company and Society Bank, National Association, a national banking association, and subsequently amended, effective as of June 24, 1998, October 28, 2000, and June 28, 2001; and
WHEREAS, it is desirable to further amend the Benefit Trust Agreement;
NOW, THEREFORE, the Benefit Trust Agreement, as amended, is hereby further amended, effective as of August 28, 2001, as follows:
Article III of the Benefit Trust Agreement is amended by adding the following provision as a new Section 3.03 to the end thereof:
3.03 Notwithstanding the foregoing provisions of this Article or
anything in the Trust to the contrary, none of (i) the execution of the
Agreement and Plan of Merger by and among MWHolding Corporation, Michael
Merger Sub Corporation, William Merger Sub Corporation, the Company and
Westvaco Corporation dated as of August 28, 2001 (such Agreement, including
any amendments hereafter made thereto, the "Merger Agreement"), (ii) any
public announcement described in Section 3.02(ii) made in connection with
transactions contemplated by the Merger Agreement, (iii) the increase of
any person of his beneficial ownership of the combined voting power of the
Company's outstanding securities made in connection with the transactions
contemplated by the Merger Agreement as described in Section 3.02(iii);
(iv) any resolution of the Board described in Section 3.02(iv) made in
connection with the transactions contemplated by the Merger Agreement, nor
(v) the consummation of the transactions contemplated by the Merger
Agreement, shall constitute either a Change in Control or Potential Change
in Control within the meaning of the Trust. No contributions by the Company
to the Trust shall be required under the Benefit Trust Agreement with
respect to any event, action or circumstance occurring from or after
execution of the Merger Agreement and prior to the Effective Time of the
Mergers (as defined in the Merger Agreement). Notwithstanding the
immediately preceding sentence, if the Merger Agreement shall be terminated
pursuant to Article VIII of the Merger Agreement, and if any event, action
or circumstance which is not described in the immediately preceding
sentence and would constitute a Potential Change in Control under the
amended Trust has occurred from or after the execution of the Merger
Agreement and on or before the termination of the Merger Agreement, then,
for all purposes of the Trust (including, without limitation, the timing of
contributions required to be made by the Company to the Trust), such event,
action or circumstance shall be deemed to have occurred immediately after
the termination of the Merger Agreement and the immediately preceding
sentence shall be of no further force and effect.
Section 7.02 of the Benefit Trust Agreement is amended by adding the following provision as a new Section 7.02(d) to the end thereof:
(d) From and after the Effective Time (as defined in the Merger Agreement), the term "Company" shall refer to MeadWestvaco Corporation.
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment to the Benefit Trust Agreement as of the effective date written above.
THE MEAD CORPORATION
By /s/ PETER H. VOGEL, JR. ------------------------------------ Name: Peter H. Vogel, Jr. Title: Vice President, Finance and Treasurer |
KEY BANK, N.A.
By /s/ JANICE L. CULVER ------------------------------------ Name: Janice L. Culver, CPA Title: Senior Vice President |
Exhibit 10.xxxv
(a) "Board of Directors" means the Board of Directors of the Company.
(b) A "Change in Control" shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
(i) date of expiration of a Tender Offer (other than an offer by the Company), if the offeror acquires Shares pursuant to such Tender Offer;
(ii) the date of approval by the shareholders of the Company of a definitive agreement: (x) for the merger or consolidation of the Company or any direct or indirect subsidiary of the Company into or with another corporation, other than (1) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of the Company, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of the Company, either by remaining outstanding if the Company continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of the Company, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition;
(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x)(1) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of the Company and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected, or were nominated for election, by the Company's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
(c) "Committee" means the Compensation Committee of the Board of Directors.
(d) "Company" means The Mead Corporation; however, when used with reference to employment, "Company" also includes any corporation, partnership or other person or entity at least 10% of the voting or equity interest of which is owned or controlled, directly or indirectly, by the Company.
(e) "Eligible Director" means any director of the Company who is not also an employee of the Company.
(f) "Eligible Employee" means any employee of the Company selected by the Committee.
(g) "Grant Date" means the date on which Restricted Shares are to be granted pursuant to Article II, Section 1.
(h) "Market Value" means the average of the highest sale price and the lowest sale price of a Share on the date the value of a Share is to be determined, as reported on the New York Stock Exchange - Composite Transactions Tape (or other similar source) or, if no sale is reported for such date, then on the next preceding date for which a sale is reported.
(i) "Participant" means any individual who holds Restricted Shares granted under the Plan.
(j) "Restriction Period" means (i) in the case of Restricted Shares granted pursuant to Article II. Section 1 (a), (b) or Section 2, the period of six months from the date the Restricted Shares are granted, (ii) in the case of Restricted Shares granted pursuant to Article II. Section 1(c),
the date the grantee becomes age 55 or six months from the date the Restricted Shares are granted, whichever is later, and (iii) in the case of Restricted Shares granted pursuant to Article III, the period of six months or longer (as determined by the Committee) from the date Restricted Shares are granted.
(k) "Restricted Shares" means any Shares issued or delivered pursuant
to the Plan which remain subject to the restrictions set forth in Article I,
Section 5 of the Plan.
(l) "Shares" means the Common Shares, without par value, of the Company.
(m) "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
(n) "Beneficial Owner" shall have the meaning defined in Rule 13d-3 under the Exchange Act.
(o) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time.
(p) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
(q) "Tender Offer" shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time.
(a) The Plan shall be administered by the Committee. Subject to the express provisions of the Plan, the Committee and the Board of Directors shall each have authority to construe and interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for administering the Plan. The Committee or the Board of Directors may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent it shall deem expedient to carry it into effect. The determination of the Committee or the Board of Directors on any matters within the scope of this section shall be conclusive. A majority of the Committee shall constitute a quorum for meetings of the Committee, and the act of a majority of the Committee at a meeting, or an act reduced to or approved in writing by all members of the Committee, shall be the act of the Committee.
In the case of Restricted Shares granted pursuant to Article III, the Committee may in its discretion impose additional conditions or restrictions as to the attainment of specified performance goals during the Restriction Period for all or a portion of the shares or all or a portion of the years in the Restriction Period.
(b) The Committee may waive or modify at any time any condition or restriction (including, without limitation, any of the restrictions set forth in Article I, Section 5) with respect to any Restricted Shares issued pursuant to Article III.
(a) Subject to the provisions of paragraph (b) of this Section 5, Restricted Shares issued pursuant to the Plan shall be subject to the following restrictions:
(i) the Participant shall not be entitled to receive delivery of the certificate for such Restricted Shares until the expiration of the Restriction Period;
(ii) such Restricted Shares shall not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restriction Period; and
(iii) all such Restricted Shares shall be forfeited and all right of the Participant to such Restricted Shares shall terminate without further obligations on the part of the Company if the Participant ceases to be a director of the Company (in the case of a Participant who received Restricted Shares as an Eligible Director) or an employee of the Company (in the case of a Participant who received Restricted Shares as an Eligible Employee) prior to the end of the Restriction Period.
Upon the forfeiture of Restricted Shares, such Shares shall be returned to the status of authorized and unissued Shares or treasury Shares, as determined by the Committee.
(b) Notwithstanding the provisions of paragraph (a) of this Section 5, in the event a Participant ceases to be a director of the Company (in the case of a Participant who received Restricted Shares as an Eligible Director) or an employee of the Company (in the case of a Participant who received Restricted Shares as an Eligible Employee) prior to the end of a Restriction Period as a result of such Participant's death, disability or normal retirement in accordance with the Company's policies, then the restrictions set forth in paragraph (a) of this Section 5 shall immediately cease to apply to (and all rights of the Participant shall immediately vest with respect to) all of the Restricted Shares.
In any event, all such Restricted Shares shall be forfeited and all rights of the Participant to such Restricted Shares shall terminate without further obligations on the part of the Company if the Participant, directly or indirectly, individually or as an agent, officer, director, employee, shareholder (excluding being the holder of any stock which represents less than 1% interest in a corporation), partner or in any other capacity whatsoever engages prior to the time such restrictions cease to apply in any activity competitive with or adverse to the Company's business or in the sale, distribution, production or attempted sale or distribution of any goods, products or services then sold or being developed by the Company.
(c) Notwithstanding any other provision of the Plan, immediately
prior to the occurrence of a "Change in Control", all of the restrictions set
forth in this Section 5 shall immediately cease to apply to all Restricted
Shares issued pursuant to the Plan, except to the extent that the lapse of such
restrictions would, in the opinion of counsel selected by the Company's
independent auditors, constitute "parachute payments" within the meaning of
Section 280G(b)(2)(A) of the Internal Revenue Code (the "Code") and, when added
to any other "parachute payments" which would be received by the Participant
pursuant to the terms of any other plan, arrangement or agreement with the
Company, any person whose actions result in a change in control of the Company
or any person affiliated with the Company or such person, would be subject to
the tax imposed by Section 4999 of the Code. As used in the immediately
preceding sentence, "immediately prior" to the Change in Control shall mean
sufficiently in advance of the Change in Control to permit the Participant to
deal with the Shares so that those Shares may be treated in the same manner in
connection with the Change in Control as the Shares of other shareholders.
(d) At the end of the Restriction Period, or at such earlier time as it is provided for in Paragraphs (b) or (c) of this Section 5, the restrictions applicable to the Restricted Shares pursuant to this Section 5 shall cease and a share certificate for the number of Restricted Shares with respect to which the restrictions have ceased shall be delivered, free of all such restrictions and all restrictive legends, to the Participant or the Participant's beneficiary or estate, as the case may be.
(e) If required by the Committee, each grant of Restricted Shares shall be evidenced by a written agreement between the Company and the Participant.
(f) In the event that the restrictions set forth in Paragraph (a) of this Section 5 shall cease to apply to any Restricted Shares granted to Eligible Employees subject to Section 16 of the Act prior to the date which is six months after the date of grant of such Restricted Shares, then, notwithstanding any provision to the contrary in this Section 5, the restrictions set forth in paragraphs (a) (i) and (a) (ii) of this Section 5 shall continue in effect until the date which is six months after the date of such grant.
(g) Notwithstanding any provision to the contrary in this Section 5, but subject nonetheless to Paragraph (c) of this Section 5, in the case of Restricted Shares granted pursuant to Article III, if the Participant fails to attain specified performance goals set forth with respect to such Restricted Shares during the Restriction Period, the Participant will forfeit such Restricted Shares to the extent specified in the grant of such Restricted Shares and the right of the Participant to such Restricted Shares shall terminate to the extent specified in the grant of such Restricted Shares without any further obligations on the part of the Company.
(a) Upon the grant of Restricted Shares pursuant to Article II or Article III of the Plan, the Company shall issue a share registered in the name of the Participant bearing the following legend and any other legend required by any federal or state securities laws:
"The transferability of this certificate and the Common Shares represented hereby are subject to the restrictions, terms and conditions (including forfeiture and restrictions against sale, assignment, transfer, pledge, hypothecation and other disposition) set forth in The Mead Corporation Restricted Stock Plan. Copies of such Plan will be mailed to any shareholder without charge within five days after receipt of written request therefor
address to Secretary, The Mead Corporation, Mead World Headquarters, Courthouse Plaza Northeast, Dayton, OH 45463."
Each such share shall be retained by the Company until the restrictions set forth in Article I, Section 5(a) cease to apply to the Shares.
(b) Upon the issuance of Restricted Shares pursuant to paragraph (a) of this Section 6, the Participant shall, subject to all of the terms, conditions and restrictions set forth in the Plan, have all of the rights of a holder of Shares, including the right to vote and to receive dividends and other distributions with respect thereto.
(a) On the third business day of January, 1998 and on each annual anniversary of such date during the term of the Plan, (each such date is hereinafter referred to as a "Grant Date"), the Company shall grant a number of Restricted Shares to each then Eligible Director determined by dividing $7,500 by the Market Value of a Share on the Grant Date (rounded to the nearest whole shares).
(b) If during the term of the Plan any person becomes an Eligible Director on a date other than a Grant Date, the Company shall grant such person a number of Restricted Shares determined by dividing $7,500 by the Market Value of a Share (rounded to the nearest whole share) on the date of such person's election to the Board of Directors.
(c) Each Eligible Director shall automatically receive a grant of a
number of Restricted Shares of the Company equal to the quotient obtained by
dividing (i) 5,000, by (ii) the Market Value per Share on the date the Plan, as
amended, is approved by the Shareholders (the "Initial Grant"). Thereafter, on
the third business day of January, 1997 and on each annual anniversary of such
date during the term of the Plan, the Company shall grant and each Eligible
Director shall automatically receive a number of Restricted Shares which shall
equal the product obtained by multiplying the Initial Grant by an adjustment
factor (the "Factor"). The Factor shall equal the quotient obtained by dividing
(y) the base line number for average total compensation paid to directors by
companies with annual sales in excess of $4 billion, as published in the Hay
Consulting Group's "Directors Compensation Report" (or comparable successor
report) in the calendar year immediately preceding the year in which such grant
is made, which report covers compensation paid in the year ending immediately
prior to the year of publication, by (z) 36,246. In the event that such
Directors Compensation Report (or comparable successor report) is not published
with respect to any year, the Factor shall equal one (1).
(a) Not later than June 1 of each year during the term of the Plan, the Committee shall cause each Eligible Director to be furnished with an appropriate form which enables the director to elect to receive payment in Restricted Shares of a minimum of 20% up to a maximum of 100% (in increments of 10%) of the annual retainer fee to be earned by such director for service on the Board of Directors during the following calendar year which is paid on or after the first day of such calendar year. In order to be effective, the election form must be signed by the director and must be returned to the Committee or its delegate not later than July 1 of the year prior to the year with respect to which the election is being made. All such elections are irrevocable.
(b) A new Eligible Director may, by filing the prescribed election form, elect to receive the annual retainer fee as Restricted Shares as provided in paragraph (a) of this Section 2 only if the election form is signed and filed at least six months prior to the date of payment of the annual retainer fee to such director.
(c) If an Eligible Director has elected to receive all or a portion of the annual retainer fee as Restricted Shares as provided in this Section 2, then on the date such fee would otherwise be payable, the Company shall grant to such director a number of Restricted Shares determined by dividing the compensation so to be received by the Market Value of a Share on such date such other compensation would otherwise be payable (rounded to the nearest whole share).
Notwithstanding the foregoing, however, in the event any rights to purchase Shares are issued pursuant to the Company's Shareholder Rights Plan (or any successor plan) with respect to Restricted Shares, such rights shall cease to be subject to the restrictions applicable to the underlying Restricted Shares at such time, if any, as such rights become exercisable.
shall not, however, be deemed to require the Company to effect any registration of Shares under any such law or regulation.
(a) The Board of Directors may from time to time amend the Plan, or any provision thereof, in such respects as the Board of Directors may deem advisable; provided, however, that any such amendment must be approved by the holders of Shares entitling them to exercise a majority of the voting power of the Company if such amendment would:
(i) materially increase the benefits accruing to participants under the Plan;
(ii) materially increase the aggregate number of Shares which may be issued and/or delivered or the number of Shares which may be granted to any individual under the Plan;
(iii) materially modify the requirements as to eligibility for participation in the Plan.
(b) The Plan shall terminate and no additional Restricted Shares shall be granted under the Plan after September 30, 2005; provided, however, that the Board of Directors may earlier terminate the Plan at any time.
(c) No amendment to or termination or expiration of the Plan shall adversely affect any Restricted Shares previously granted under the Plan without the consent of the holder thereof.
(d) Notwithstanding paragraph (a) of this Section 3, the provisions of Section 1 of Article II may not be amended more than once every six months other than to comport with changes in the Code, ERISA or the rules thereunder.
(a) The Company shall have the right to require, prior to the issuance or delivery of any Restricted Shares, payment by the Participant of any taxes required by law with respect to the issuance or delivery of such Restricted Shares.
(b) On any date on or after January 1, 1994 that restrictions applicable to Restricted Shares granted (or to be granted) hereunder shall have ceased pursuant to Article I, Section 5 (the "Lapse Date"), and with respect to persons subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "1934 Act") on any date thereafter through the end of the next following period (the "Window Period") specified in Rule 16b-3(e)(3) (or any successor rule) under the 1934 Act, the Participant to whom such Restricted Shares were granted may elect to have the Company retain, from the Restricted Shares to be delivered at the end of the Restriction Period, Shares having a Market Value on the date of delivery equal to all or any part of the required minimum federal, state and local withholding tax payments to be made by the Participant with respect to ceasing of the restrictions in lieu of making such payments in cash; provided that such election may also be made in advance of the Lapse Date and will be effective on the date specified in the notice of election (subject, as applicable, to Section 16 of the 1934 Act), and further provided that, with respect to a Lapse Date that has occurred or will occur between January 1, 1994 and October 28, 1994, the election may be made by persons subject to and in accordance with Section 16 of the 1934 Act through the end of the first Window Period which commences on, includes or follows October 28, 1994. The Committee may establish from time to time rules or limitations with respect to the right of a Participant to elect to have the Company retain Restricted Shares in satisfaction of withholding payments; provided, however, that, in any event, any such rules or limitations must be in accordance with Section 16 of the 1934 Act and any applicable rules established under such Section.
(1) Adopted by the Board of Directors of the Company on December 11, 1987.
(2) Approved by the shareholders of the Company on April 28, 1988.
(3) Addition of Article II, Section 2, subsection (d) adopted by the Board of Directors of the Company on December 15, 1989 (deleted February 28, 1991).
(4) Amendment to Article I, Section 2, subsection (h) adopted by the Board of Directors of the Company on January 25, 1990.
(5) Amendments to Article I, Section 2, subsections (d) and (j); Article I, Section 3, subsection (a); and Article III, Section 1; and addition
of Article 2, Section 5, subsection (g), adopted by the Board of Directors of the Company on January 24, 1991, and approved by the shareholders of the Company on April 25, 1991.
(6) Amendments to Article II, Section 2, subsections (a) and (b); and addition of Article I, Section 5, subsection (f) and Article IV, Section 3, subsection (d) adopted by the Board of Directors of the Company on February 28, 1991.
(7) Amendments to Article I, Section 5, subsection (b); and addition of Article I, Section 5, subsection (b) (iii), adopted by the Board of Directors of the Company on July 23, 1992.
(8) Amendment to Article IV, Section 6, subsection (b) adopted by the Board of Directors of the Company on April 28, 1994.
(9) Amendments to Article I, Section 2(j), Section 4, Section 5(b)
(i), Section 6, Article II, Section 1(c), Article IV, Section 3(b) adopted by
the Board of Directors of the Company on October 28, 1995, and approved by the
shareholders of the Company on April 25, 1996.
(10) Amendments to Article I, Section 2(j) and 5(b); Article II,
Section 1(a) and (b) adopted by the Board of Directors of the Company on
November 09, 1996.
(11) Amendments to Article I, Section 2(b), and addition of subsection
(i), (ii), (iii), (iv) with addition of a paragraph at the end; addition of (m),
(n), (o), (p), (q) and Article I, Section 5(c) of the Plan adopted by the Board
of Directors of the Company on June 24, 1998.
(12) Administrative Amendment to Article IV, Section 6(b) adopted by the Compensation Committee of the Board of Directors of the Company on June 24, 1999.
Exhibit 10.xxxvi
Amended Through October 29, 1988
Section 1. Definitions.
(a) Year means each calendar year commencing on January 1 and ending on the succeeding December 31.
(b) Company means The Mead Corporation, an Ohio corporation, and its corporate successors.
(c) Compensation Committee means the Compensation Committee of the Board of Directors of the Company.
(d) Director means any person who serves on the Board of Directors of the Company except members of the Board of Directors who are also employees of the Company.
(e) Plan means this Deferred Compensation Plan for Directors.
(f) Termination Date means the date a Director concludes his/her service on the Company's Board of Directors.
Section 2. Eligibility.
The Plan is limited to those present or future Directors of the Company.
Section 3. Administration.
(a) The Plan shall be administered by the Compensation Committee which may delegate to the appropriate officers and/or employees of the Company such duties in connection with the administration of the Plan as they may deem necessary, advisable or appropriate. All Directors who are members of the Compensation Committee shall be eligible to participate in the Plan.
(b) Subject to the express provisions of the Plan, the Compensation Committee shall have authority to construe and interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for administering the Plan. The Compensation Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent it shall deem expedient to carry it into effect. The determinations of the Compensation Committee on any matters within the scope of this Section 3(b) shall be conclusive.
Section 4. Election by Participants.
(a) At least thirty days prior to the commencement of each Year, the Compensation Committee shall cause to be furnished to each Director an appropriate form which enables the Director to elect to defer, until after the Director's termination date, payment of a minimum of 20% up to a maximum of 100% (in increments of 10%) of compensation earned for service on the Company's Board of Directors during the upcoming year (including annual retainer and fees for attending meetings of the Board and its Committees, but excluding expense reimbursement). The Director shall select the date and manner of receiving any compensation that is deferred each year, provided that such selection must be in accordance with the following:
(i) with respect to compensation payable for the 1987 Year and preceding years.
(I) the date to pay or commence paying the compensation shall be the first day of any month after the Director's Termination Date and before the Director's 72nd birthday, and
(ii) with respect to compensation payable for the 1988 Year and subsequent years.
(I) the date to commence paying the compensation shall be the January 2 next following the Director's Termination Date or such later January 2 as may be chosen by the Director, but in any event not later than the January 2 of the Year following the year in which the Participant becomes or would have become age 72, and
(II) the compensation shall be paid in 15 level annual installments commencing on the Deferral Date.
The date chosen to pay or commence payment of compensation pursuant to paragraph (i)(I) or (ii)(I) above is referred to herein as the "Deferral Date." The actual payment of the lump sum or of the first of the annual installments may be at any time within one year of the Deferral Date, at the sole discretion of the Compensation Committee (or its delegate). To the extent that a Director has not elected to defer compensation, such compensation payment shall be made in cash to him/her at the time it would be otherwise payable.
(b) In order to be effective, the form must be signed by the Director and must be returned to the Compensation Committee (or its delegate) prior to the commencement of the Year. If the Director fails to return the form or if the form is received after the commencement of the Year, then the Director shall be deemed to have elected not to defer compensation and no amended election made thereon, which is otherwise permitted by Section 4(c), shall be effective.
(c) The election made by the Director under Section 4(a) shall be irrevocable provided that a Deferral Date chosen by the Participant and/or the number of installments payable to the Director may be changed by the Compensation Committee, in its sole discretion, but only, unless the Compensation Committee determines otherwise, in the event of a severe financial hardship to the Director resulting from a sudden and unexpected illness or accident to the Director or a dependent (as defined in Section 152(a) of the Internal Revenue Code) of the Director, loss of the Director's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Director. In the event a change made pursuant to this paragraph affects a Director who is a member of the Compensation Committee, such Director shall not participate in the Compensation Committee's decision. The number of installments payable to the Director's designated beneficiary may be changed by the Compensation Committee on the same basis as set forth in this paragraph.
(d) In the case of a new Director who has been designated as eligible to participate in the Plan for the Year in which he/she begins service on the Company Board of Directors, a timely election with respect to such Year will be deemed to have been made if it is in fact made and returned to the Compensation Committee within 30 days after such person becomes a Director.
Section 5. Deferred Compensation.
(a) The Company shall establish an appropriate record (hereinafter referred to as the "Deferred Compensation Ledger") and thereafter from time to time enter therein the name of each Director who has elected Deferred Compensation in accordance with Section 4 hereof, the amount of compensation payments which he/she has elected to defer and his/her preference as to the manner of payment of such compensation.
(b) With respect to compensation earned in 1982 through 1983, the Company shall credit annually to a Director's account (including the account of a Director who has passed his Termination Date) interest at a rate equal to the weekly composite bond yield for single A bonds rounded to the nearest 1/10 of 1%, as published in the S & P Indexes of the Security Markets for the last week of the third quarter of the Year preceding the year earned.
For compensation earned in 1984 and 1985, the interest to be credited to such account(s) shall be at a rate equal to the nine-month average composite bond yield for single A bonds rounded to the nearest 1/10 of 1% as published in the S & P Indexes of the Security Markets for the first nine months of the Second Year preceding the year such interest is credited.
For compensation earned in 1986 and subsequent years, the interest to be credited to such account(s) shall be at a rate equal to the nine-month average composite bond yield for prime grade, ten-year municipal bonds rounded to the nearest 1/10 of 1% published in the Salomon Brothers Index of the Security Markets for the first nine months of the Second Year preceding the year such interest is credited. Each post-1983 account will be credited with interest, which will change from year to year based upon the above calculations.
(c) Except to the extent otherwise provided in this Section, the amounts credited to a Director's account in the Deferred Compensation Ledger shall be paid to the Director (or his/her beneficiary designated under Section 5(d) hereof) after his/her Termination Date in accordance with Section 4(a) hereof. In the case of installment payments, each such payment shall include an amount equal to the percentages credited to his/her account under Section 5(b) hereof since the next preceding payment.
Notwithstanding the form of payment selected by the Director, the amounts (or a portion of the amounts) credited to a Director's account (or accounts) in the Deferred Compensation Ledger shall be paid as follows under the following circumstances:
(i) if the aggregate amount credited to a Director's account is $10,000 or less, at the time of his/her Termination Date (after all distributions pursuant to (ii) below), then such amount shall be paid in one lump sum on or before the last day of the month next following the Director's Termination Date.
(ii) if the Director's Termination Date precedes his/her 55th birthday (other than as a result of the Director's death or disability), then deferred compensation relating to the 1988 Year and subsequent years and earnings thereon credited to the Director's account shall be paid in one lump sum on or before the last day of the month next following the Director's Termination Date.
(d) Each Director upon election of Deferred Compensation shall file with
the Compensation Committee (or its delegate) a notice in writing designating one
or more beneficiaries to whom payments shall be made in the event of his/her
death. The Director shall have the right to change the beneficiary or
beneficiaries from time to time; provided, however, that any change shall not
become effective until received in writing by the Compensation Committee (or its
delegate). In the event a Director fails to deliver such written designation,
then such payments shall be made to the estate of such Director. At the time of
filing a form pursuant to Section 4(a), the Director may also file with the
Compensation Committee (or its delegate) a written election of the date for
commencement of payments to the designated beneficiary and manner of payment in
the event of his/her death. In the event a Director fails to deliver such
written election, payment shall commence as of the date of his/her death or
continue to be paid to his/her beneficiary in the manner elected under Section
4(a). In no event shall the aggregate number of annual installments paid to a
Director and his/her beneficiary exceed 25.
(e) Nothing contained in the Plan and no action taken pursuant to the provisions hereof shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Director, or any beneficiary of such Director designated pursuant to Section 5(d) hereof or any other person. Title to, and beneficial ownership of, any amounts credited to the Deferred Compensation Ledger shall at all times remain in the Company, and no Director or any beneficiary designated pursuant to Section 5(d) hereof shall have any property interest whatsoever in such amounts or in any specific assets of the Company. All amounts so credited shall remain general assets of the Company and shall be subject to the claims of general creditors of the Company.
Section 6. Nonalienation of Benefits.
No right or benefit under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefits. If any Director or beneficiary hereunder should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any right or benefit hereunder, then such right or benefit shall, in the discretion of the Compensation Committee, cease and terminate, and in such event, the Company may hold or apply the same or any part hereof for the benefit of the Director or beneficiary, his/her spouse, children, or other dependents, or any of them in such manner and in such proportion as the Compensation Committee may deem proper.
Section 7. Amendment or Termination of Plan.
1. Amended through November 1, 1985.
2. Amendments to Sections 4 and 5 adopted effective as of October 1, 1987.
3. Amendment to Section 7 adopted October 29, 1988.
SECOND AMENDMENT
TO
THE MEAD CORPORATION
DEFERRED COMPENSATION PLAN FOR DIRECTORS
WHEREAS The Mead Corporation (the "Company") heretofore established The Mead Corporation Deferred Compensation Plan for Directors (the "Plan") and subsequently amended the Plan; and
WHEREAS the Company desires to further amend the Plan pursuant to the power reserved to the Company's Board of Directions by Section 7 of the Plan;
NOW, THEREFORE, the Plan is hereby amended, effective as of June 24, 1998, as follows:
1. Section 1(b) of the Plan is amended to read, in its entirety, as follows:
"(b) Company means The Mead Corporation, an Ohio corporation, and, except in determining under Section 8 hereof whether or not any Change in Control of the Company has occurred, its corporate successors.
2. Section 4(c) of the Plan is amended by the addition of the following sentence at the end thereof:
"Notwithstanding the foregoing provisions of this Section 4(c), upon and after the occurrence of a Change in Control (as defined in Section 8 hereof), the discretionary power given the Compensation Committee to change the Deferral Date chosen by a Director and/or the form of payment of the Director's benefits hereunder shall be exercisable in a manner which postpones the Deferral Date or postpones or reduces any benefit payment only if the Compensation Committee shall have previously received a written request from the Director for such change and such power shall be exercisable only to determine whether to grant the particular change requested or to retain existing Deferral Date and existing form of payments."
3. Section 5(e) of the Plan is amended by the addition of the following sentence at the end thereof:
"Notwithstanding the foregoing provisions of this Section 5(e), the benefits payable under the Plan are unfunded and are payable, when due, from the general assets of the Company; provided, however, that the Company, in its discretion, may establish or maintain a trust to pay such amounts, which trust shall be subject to the claims of the Company's unsecured general creditors in the event of the Company's bankruptcy or insolvency; and provided, further, that the Company shall remain responsible for the payment of any such amounts which are not so paid by any such trust."
4. The Plan is amended by the addition of the following new Section 8:
"Section 8. Definition of Change in Control
"For purposes of the Plan, a 'Change in Control' shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
"(i) date of expiration of a Tender Offer (other than an offer by the Company), if the offeror acquires Shares pursuant to such Tender Offer;
"(ii) the date of approval by the shareholders of the Company of a definitive agreement: (x) for the merger or consolidation of the Company or any direct or indirect subsidiary of the Company into or with another corporation, other than (1) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of the Company, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of the Company, either by remaining outstanding if the Company continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company (not including in the securities Beneficially
Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of the Company, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition;
"(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x)(l) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of the Company and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
"(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected, or were nominated for election, by the Company's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
"Notwithstanding the foregoing, a 'Change in Control' shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
" 'Affiliate' shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
" 'Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the Exchange Act.
" 'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended from time to time.
" 'Person' shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that
such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities,
or (iv) a corporation owned, directly or indirectly, by the shareholders of
the Company in substantially the same proportions as their ownership of
stock of the Company.
" 'Shares' shall mean shares of common stock, without par value, of The Mead Corporation.
" 'Tender Offer' shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time."
AMENDMENT TO
THE MEAD CORPORATION
DEFERRED COMPENSATION PLAN FOR DIRECTORS
WHEREAS, The Mead Corporation ("Mead") established The Mead Corporation Deferred Compensation Plan for Directors (the "Plan") and subsequently amended the Plan, and
WHEREAS, Mead desires to further amend the Plan pursuant to the power reserved to Mead's Compensation Committee by Section 7 of the Plan;
NOW, THEREFORE, the Plan is hereby amended, effective as of October 26, 2001, as follows:
1. Section 4(a), first paragraph, second sentence is revised to add "Except as otherwise provided in the Plan," at the beginning thereof.
2. Section 4(c), first paragraph, first sentence is revised to add "Except as otherwise provided in the Plan" at the beginning thereof.
3. Section 5(c) is revised to add a new third paragraph to read as follows:
Notwithstanding any provision in the Plan to the contrary but subject to this Section 5(c), second paragraph (except as otherwise specifically provided in this paragraph), a former or current Director can revise the Deferral Date and the number of installments (including a lump sum payment) to receive earned compensation that has been deferred as follows:
(i) prior to a Change in Control, a former or current Director may revise a previously elected Deferral Date and number of installments (such revision being permitted to include receiving all or a portion of an account in a lump sum following a Change in Control and prior to termination of service), provided that any such revision is effective only for distributions on or following a Change in Control and occurring during January 2003 and thereafter and with respect to all or a portion of the balance of such Director's account on a Change in Control; and
(ii) at least three months prior to termination of service as a Director (whether before or after a Change in Control), a current Director may file such revision with respect to the balance of such Director's account on such termination of service.
A Director can make revisions in accordance with this subsection on a form furnished by and filed with the person responsible for administering the Plan at any time prior to the dates stated in this subsection 5(c).
4. Section 7 is revised to (a) delete the word "and" and insert a comma in substitute thereof, (b) delete the period at the end of the sentence and insert the word "and" in substitute thereof and (c) add the following at the end, "a former or current Director's right to make or request revisions in accordance with Sections 4 and 5 shall continue."
Exhibit 10.xxxvii
Amended Through October 29, 1988
WHEREAS, The Mead Corporation Deferred Compensation Plan for Directors ("Plan") was established for compensation earned on and after January 1, 1982, for the benefit of eligible Directors; and
WHEREAS, the Plan has been amended on prior occasions; and
WHEREAS, it is currently desirable to supplement the Plan effective August 1, 1985 (the "Effective Date").
NOW THEREFORE, with respect only to amounts on the Deferred Compensation Ledger on the Effective Date, amounts of 1985 earned compensation for which a deferral election is in force on the Effective Date under Plan Section 4, and amounts of compensation deferral permitted under this Supplement, the following provisions determine Director rights and Company obligations under the Plan. All other provisions of the Plan, to the extent not in conflict with this Supplement, shall continue in effect.
(1) Amounts covered under the terms of this Supplement shall, on and after the Effective Date, be maintained in a separate record (hereinafter referred to as the "Supplemental Ledger").
(2) Contributions of an equal percentage of each compensation payment earned during 1986 may be made to the Plan through December 31, 1986. Participation through compensation deferral shall include annual retainer and meeting fees but exclude expense reimbursement.
(3) The Director shall elect, on or before September 30, 1985, that all or a portion of his/her account in the Supplemental Ledger be distributed under Option A or under Option B or be divided between them.
(a) OPTION A - The Director or his/her Beneficiary will receive fifteen (15 level annuity payments from his/her account in the Supplemental Ledger commencing on the January 2 next following his/her Termination Date or such later January 2 as shall have been chosen by the Director, but not later than the January 2 of the Year following the year in which he/she becomes or would have become age 72, the date chosen by him/her being hereafter referred to as the "Annuity Starting Date."
(b) OPTION B - Commencement, method, and duration will be the same as under Option A, except that four (4) additional annual payments commencing on January 3, 1993 (hereinafter referred to in the aggregate as the "Annual Payments"), shall be paid to the Director. The Annual Payments shall reduce the amount otherwise payable to the Director or his/her Beneficiary on his/her Annuity Starting Date in accordance with Option A. Each annual installment of a Director's Annual Payments shall be equal to the pro rata amount designated for Option B of the total of (i) amounts that were in the Deferred Compensation Ledger on the Effective Date, (ii) amounts of 1985 earned compensation for which a deferred election is in force on the Effective Date, and (iii) amounts of compensation deferral elected under the terms of this Supplement. Notwithstanding the foregoing, no payment of an annual installment of a Director's Annual Payments shall be made if such installment coincides with or follows a Director's Annuity Starting Date. Any annual installment of a Director's Annual Payments not made in accordance with the preceding sentence shall be included in valuing the Supplemental Ledger in accordance with (4) below.
*This is a composite of the 1985 Supplement to The Mead Corporation Deferred Compensation Plan for Directors, reflecting the supplement and all amendments adopted through October 29, 1988. The Mead Corporation Deferred Compensation Plan for Directors is set forth in a separate document.
Except as otherwise provided, election of Option A or Option B under the foregoing paragraph shall be irrevocable and may not be subsequently changed.
Notwithstanding the Director's election of Option A or Option B, if this Supplement is terminated prior to, or if his/her Termination Date for reasons other than death or disability, precedes his/her 55th birthday, distribution of his/her account in the Supplemental Ledger shall be made in one lump sum payment on or before the last day of the month next following the date of such occurrence. If the Director's Termination Date occurs due to death or disability prior to his/her 55th birthday and the value of his/her account on such Termination Date is less than $50,000, such account shall also be so distributed in one lump sum. If the Director dies on or after his/her Annuity Starting Date, remaining annuity installments, if any, shall continue to be paid from the Plan. In all cases of death, a lump sum payment or a commencement or continuation of a level annuity shall be to the Beneficiary designated pursuant to Section 5(d) of the Plan.
An Annuity Starting Date and/or the number of installments chosen by the
Director may be changed by the Compensation Committee, in its sole discretion,
but only, unless the Compensation Committee determines otherwise, in the event
of a severe financial hardship to the Director resulting from a sudden and
unexpected illness or accident to the Director or a dependent (as defined in
Section 152(a) of the Internal Revenue Code) of the Director, loss of the
Director's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Director. In the event a change made pursuant to this paragraph affects a
Director who is a member of the Compensation Committee, such Director shall not
participate in the Compensation Committee's decision. The number of installments
payable to the Participant's designated Beneficiary may be changed by the
Compensation Committee on the same basis as set forth in this paragraph.
In the event the Termination Date of a Director who has elected Option B occurs (for reasons other than death or disability) before receipt of all the Annual Payments to which the Director is entitled, remaining payments to which the Director or his/her Beneficiary shall be entitled shall be calculated as if the Director had elected Option A. If such Director shall have received one or more but not all of the Annual Payments, his/her Supplemental Ledger account shall be valued pursuant to (4) below as if it had been reduced on the Effective Date by the Effective Date value of Annual Payments received (discounted at Basic plus Option B Incremental Rate) and credited thereafter with the Basic plus Option A Incremental Rate. In the event the Termination Date of such a Director precedes receipt of all Annual Payments because of death or disability, or in the event all Annual Payments are not made due to coincidence with annuity payments on or after the Annuity Starting Date, the Director or Beneficiary shall receive payments from the Supplemental Ledger valued at the Basic plus Option B Incremental Rate less any Annual Payments received by the Director.
(4) Except as provided below, the Director's Supplemental Ledger account shall be valued on the Annuity Starting Date or earlier distribution date if applicable, according to whichever of the following (a) or (b) produces the highest value:
(a) as if all amounts had remained in the Deferred Compensation
Ledger on the Effective Date in their separate accounts established
pursuant to Section 5(a) of the Plan and were credited pursuant to Plan
Section 5(b) in the absence of this Supplement; or
(b) by crediting the Director's Supplemental Ledger account each Year (with pro rata adjustment for partial years) with a percentage equal to the nine-month average composite yield on single A bonds rounded to the nearest 1/10 of 1% as published in the S&P Indexes of the Security Markets for the first nine months of the Second Calendar Year preceding the year such percentage is credited (hereinafter referred to as the "Basic Rate"), PLUS a percentage (hereinafter referred to as the "Incremental Rate") based on the Director's age on the Effective Date and his/her choice of Option A or Option B according to the following table:
Incremental Rate
Age Option A Option B --- -------- -------- 39 and under 4% 7% 40-44 5% 8% 45-49 7% 9% 50-54 8% 10% 55-59 11% 11% 60 and over 12% -- |
In no event, however, shall the valuation reflect the addition of the Incremental Rate to the Basic Rate if the Director's Termination Date (for reasons other than death or disability) precedes his/her 55th birthday, or if prior to his/her 55th birthday, a distribution is made to a Director due to adverse tax or economic consequences.
(5) All level annuities paid under this Supplement shall be computed using an interest rate percentage equal to an average of the valuation percentages credited under (4) above during the three-year period immediately preceding the Year in which the first annuity payment is made to a Director.
(6) Except as provided in (7) below, the Board of Directors of the Company may amend or terminate the Plan or this Supplement as provided in Section 7 of the Plan.
(7) Notwithstanding any other provision contained herein, in no event, including but not limited to termination or amendment of the Plan or Supplement or liquidation or reorganization of the Company:
(a) shall a Director who has not reached his/her 55th birthday receive less than the amount credited to the Director's Supplemental Ledger account with interest at the Basic Rate, or the total amounts credited to his/her Deferred Compensation Ledger accounts as provided in (4)(a) above, if greater;
(b) shall the Basic Rate and Incremental Rate of interest which has been or will be credited to the account of a Director who has reached his/her 55th birthday, or the interest rate percentage for level annuities provided in (5) above, be changed unless the tax laws of the United States change to increase the cost of the Incremental Rate to the Company in which event the Incremental Rate may be adjusted only to the extent necessary to reflect such change in cost, nor shall the rights of the Director or Beneficiary to commence or continue distributions from the Supplemental Ledger (including its valuation) be affected.
1. Adopted effective August 1, 1985.
2. Amendments to Section (3) and (5) adopted effective as of October 1,
1987.
SECOND AMENDMENT
TO
1985 SUPPLEMENT TO
THE MEAD CORPORATION
DEFERRED COMPENSATION PLAN FOR DIRECTORS
WHEREAS The Mead Corporation (the "Company") heretofore established 1985 Supplement to The Mead Corporation Deferred Compensation Plan for Directors (the "Supplement") and subsequently amended the Supplement; and
WHEREAS the Company desires to further amend the Supplement pursuant to the power reserved to the Company's Board of Directions by Section 6 of the Supplement;
NOW, THEREFORE, the Supplement is hereby amended, effective as of June 24, 1998, as follows:
1. The paragraph of Section 3 of the Supplement which begins with the words "An Annuity Starting Date and/or number of installments chosen by the Director...." is amended by the addition of the following sentence at the end thereof:
"Notwithstanding the foregoing provisions of this paragraph, upon and after the occurrence of a Change in Control (as defined in Section 8 hereof), the discretionary power given the Compensation Committee to change the Annuity Starting Date and/or the number of installments chosen by a Director shall be exercisable in a manner which postpones the Annuity Starting Date or postpones or reduces any installment payment only if the Compensation Committee shall have previously received a written request from the Director for such change and such power shall be exercisable only to determine whether to grant the particular change requested or to retain existing Annuity Starting Date and existing installments."
2. The Supplement is amended by the addition of the following new
Section 8:
"(8) For purposes of the Supplement, a 'Change in Control' shall be deemed to have occurred if an event set forth in any one of the following paragraphs shall have occurred:
"(i) date of expiration of a Tender Offer (other than an offer by the Company), if the offeror acquires Shares pursuant to such Tender Offer;
"(ii) the date of approval by the shareholders of the Company of a definitive agreement: (x) for the merger or consolidation of the Company or any direct or indirect subsidiary of the Company into or with another corporation, other than (1) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of the Company, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of the Company, either by remaining outstanding if the Company continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 25% or more of the combined voting power of the Company's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of the Company, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition;
"(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x)(l) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of the Company and a
majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
"(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected, or were nominated for election, by the Company's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
"Notwithstanding the foregoing, a 'Change in Control' shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
"'Affiliate' shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
"'Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the Exchange Act.
"'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended from time to time.
"'Person' shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that
such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities,
or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
"'Shares' shall mean shares of common stock, without par value, of The Mead Corporation.
"'Tender Offer' shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time."
AMENDMENT TO
THE MEAD CORPORATION
1985 SUPPLEMENT TO THE
DEFERRED COMPENSATION PLAN FOR DIRECTORS
WHEREAS, The Mead Corporation ("Mead") established The Mead Corporation 1985 Supplement to the Deferred Compensation Plan for Directors (the "Directors' Supplement") and subsequently amended the Directors' Supplement, and
WHEREAS, Mead desires to further amend the Supplement pursuant to the power reserved to Mead's Compensation Committee by Section 7 of the Plan;
NOW, THEREFORE, the Supplement is hereby amended, effective as of October 26, 2001, as follows:
1. Section 3 is revised to add a new fifth paragraph to read as follows and the current fifth paragraph becomes the sixth paragraph:
Notwithstanding any provision in the Directors' Supplement to the contrary but subject to this Section 3, third paragraph (except as specifically otherwise provided in this paragraph), a former or current Director can revise the commencement date of distributions and the number of installments (including a lump sum payment) with respect to the amount credited to an Employee's account as follows:
(i) prior to a Change in Control, a former or current Director may revise a previously elected commencement date and number of installments (such revision being permitted to include receiving all or a portion of an account in a lump sum following a Change in Control and prior to termination of service), provided that any such revision is effective only for distributions on or following a Change in Control and occurring during January 2003 and thereafter and with respect to all or a portion of the balance of such Director's account on a Change in Control; and
(ii) at least three months prior to termination of service as a Director (whether before or after a Change in Control), a current Director may file such revision with respect to the balance of such Director's account on such termination of service.
A Director can make revisions in accordance with this paragraph on a form furnished by and filed with the person responsible for administering the Directors' Supplement at any time prior to the dates stated in this paragraph.
Exhibit 10.xxxviii
TABLE OF CONTENTS
SECTION 1 - GENERAL......................................................... 1 1.1 Purpose and Effective Date................................... 1 1.2 Plan Funding and Administration.............................. 1 1.3 Applicable Law............................................... 1 1.4 Gender and Number............................................ 1 1.5 Assignment................................................... 1 1.6 Plan Year.................................................... 2 1.7 Supplements.................................................. 2 1.8 Plan Elections............................................... 2 SECTION 2 - PARTICIPATION................................................... 2 2.1 Participation Requirement.................................... 2 2.2 Continued Participation...................................... 2 SECTION 3 - DEFERRAL OF INCOME.............................................. 3 3.1 Deferred Income Amount....................................... 3 3.2 Annual Election to Participate............................... 3 SECTION 4 - PARTICIPANT ACCOUNTS............................................ 3 SECTION 5 - DCPD ROLLOVERS.................................................. 4 SECTION 6 - CREDITING OPTIONS............................................... 4 6.1 Establishment of Crediting Options........................... 4 6.2 Participant Change of Crediting Options...................... 5 SECTION 7 - ADJUSTMENT OF PARTICIPANT ACCOUNTS.............................. 5 7.1 Adjustment of Participants' Participant Accounts............. 5 7.2 Quarterly Statement of Participant Accounts Balances......... 6 SECTION 8 - DISTRIBUTION OF PARTICIPANT ACCOUNTS TO PARTICIPANTS............ 6 8.1 Annual Distributions......................................... 6 8.2 Emergency Distributions...................................... 7 SECTION 9 - DISTRIBUTION OF PARTICIPANT ACCOUNTS TO BENEFICIARIES........... 7 9.1 Distribution to Beneficiary.................................. 7 9.2 Beneficiary.................................................. 8 SECTION 10 - DISTRIBUTIONS TO INCAPACITATED PERSONS......................... 8 |
SECTION 11 - CHANGE IN CONTROL.............................................. 9 11.1 In General................................................... 9 11.2 Certain Definitions.......................................... 11 SECTION 12 - AMENDMENT AND TERMINATION...................................... 11 EXHIBIT I - CREDITING OPTIONS SUPPLEMENT A |
transfers by death or mental incompetency; no attempted assignment or transfer thereof shall be effective; and no such right or interest shall be liable for, or subject to, any obligation or liability of any Participant or Beneficiary; except that a Participant may direct that payments be made during his lifetime, when due, to a trust established by him and evidenced to his Employer to be a trust treated as a grantor trust within the meaning of section 671 of the Code.
(a) is an Eligible Director;
(b) has executed an Annual Participation Election form (as described in subsection 3.3); and
(c) has executed such forms as the Plan Administrator may determine necessary to permit Mead (at its discretion and expense) to maintain a policy of insurance on his life under the terms of which Mead shall be the policyholder, owner and beneficiary.
Each individual who becomes an Eligible Director on or after January 1, 2000 will become a Participant in the Plan (on a prospective basis) on the earlier of the date on which the Plan Administrator has received his executed Annual Participation
Election form if that date is within 30 days of the date he becomes an Eligible Director or on any subsequent January 1 if he then meets the requirements set forth in paragraphs (a) through (c) above.
(a) the deferral percentages elected by the Participant in accordance with subsection 3.1 for that calendar year;
(b) the percentage of his total deferral that is allocated to each of the "Crediting Options" (as described in subsection 6.1) selected by him;
(c) the "Distribution Period" (as defined below) that he elects to be applicable with respect to the amounts deferred pursuant to that Annual Election to Participate; and
(d) subject to the provisions of paragraph 8.1(b), the calendar year in which the Distribution Period is to commence.
Each Annual Election to Participate shall be irrevocable by the Participant after the last day of the calendar month preceding its effective date. The term "Distribution Period" means, with
respect to any Participant Account, a period of 5, 10, 15 or 20 calendar years as elected by the Participant for whom the Account is maintained.
For each calendar year, the Plan Administrator shall cause a Participant Account to be established and maintained by Mead in the name of each Participant to reflect the amount of any deferrals that are the subject of the Participant's Annual Election to Participate for that calendar year. A Participant's Participant Accounts shall be periodically adjusted as provided in subsection 7.1 and shall be distributed to a Participant in accordance with the provisions of Section 8 or, in the event of the Participant's death, to his Beneficiary in accordance with the provisions of Section 9.
Notwithstanding any provision of the Plan to the contrary, a Participant for whose benefit a balance is maintained under the Deferred Compensation Plan for Directors (the "DCPD") may elect, during December, 1994, to have that balance transferred to the Plan and credited to a separate Participant Account (to be identified as his "DCPD Participant Account") established hereunder as of January 1, 1995, subject to the following:
(a) In no event may a Participant elect to transfer to this Plan any amount credited under the Supplement to the DCPD.
(b) No DCPD rollover to the Plan shall be permitted after January 1, 1995.
(c) A Participant's Distribution Period with respect to his DCPD Participant Account shall commence on the date on which payment of his balance under the DCPD would have commenced.
(d) To the extent necessary for self-employment tax purposes, the Committee shall maintain a Participant's DCPD Participant Account in the form of sub-accounts.
Plan. On advance written notice to the Participants, the Committee may cause any Crediting Option to be prospectively deleted and may designate other Crediting Options. In no event shall the assets of a Crediting Option be constituted of securities of any Employer or Affiliate. Should Mead determine to invest any of its funds in the asset or assets constituting a Crediting Option, amounts representing such investment shall be the sole property of Mead and shall be subject to the claims of its general creditors. No Participant or Beneficiary shall have any claim or right with respect to any such amounts. Notwithstanding the foregoing provisions of this subsection 6.1, upon and after the occurrence of a "Change in Control" (as described in subsection 11.1), the Committee shall have no power to eliminate any Crediting Option which was available immediately prior to the Change in Control and, if any Crediting Option shall be eliminated through circumstances beyond the control of the Committee, the Committee shall immediately add a Crediting Option which will provide an investment return equal to one-hundred-twenty percent (120%) of the long-term Federal interest rate determined monthly under section 1274(d) of the Code, compounded semi-annually.
(b) that all or a portion (expressed as a multiple of 1 percent) of the amount of the aggregate balances of the Participant Accounts then maintained for his benefit that constitutes an Adjustment Portion be changed to another Adjustment Portion.
(a) FIRST, by charging to the proper Participant Accounts of each Participant the amount of any distribution made to, or on account of, the Participant from the Account since the last preceding Accounting Date which charge shall be
made, pro rata, according to the Adjustment Portions of that Participant Account;
The term "Accounting Date" means each business day.
(a) in the case of a Participant whose service as a Director terminates at any age on account of "disability" (as determined by the Plan Administrator) or for any reason at or after
reaching age 55 years, on or about the Distribution Payment Date of the calendar year elected by him; and
(b) in all other cases, and notwithstanding any previous election, on or about the Distribution Payment Date of the calendar year next following the calendar year during which his termination of service as a Director occurs;
and continuing for the number of calendar years constituting the Distribution Period he has irrevocably elected with respect to that Participant Account. If on the June 30 preceding his initial Distribution Payment Date the aggregate balances of a Participant's Participant Accounts is an amount that is less than $50,000, those balances shall be distributed to him on or about his initial Distribution Payment Date in a single lump sum. The amount of the annual "Installment Distribution" from a Participant Account for a calendar year shall be equal to the balance of that Participant Account as of June 30 of that year, divided by the number of calendar years remaining in the Distribution Period elected by the Participant with respect to that Account. Notwithstanding any of the foregoing to the contrary, if a Participant with respect to whom a Participant Account has been established for calendar year 1995 or 1996 has elected a Distribution Period that is less than 10 calendar years, then, at any time, but at least one year prior to his initial Distribution Payment Date, he may elect to have his Distribution Period with respect to any such Participant Account occur over a period of 10 or more years commencing on the previously elected initial Distribution Payment Date. The term "Distribution Payment Date" means July 20 of each year.
(a) through reimbursement or compensation by insurance or otherwise;
(b) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship;
(c) by cessation of deferrals under the Plan; or
(d) other distributions to be made to the Participant from the Plan.
A determination with respect to whether a Participant has experienced an Unforeseeable Emergency shall be made by the Committee.
(a) if distribution has commenced prior to his death, continue to be distributed in annual Installment Distributions, to the deceased Participant's Beneficiary with respect to the Participant Account during the remainder of the Distribution Period applicable to that Account as if the deceased Participant had lived; and
(b) if distribution has not commenced prior to his death, be distributed in annual Installment Distributions commencing on the Distribution Payment Date and over the Distribution Period elected by the deceased Participant with respect to that Participant Account.
successive Beneficiary designated by a Participant), the balance will be paid to any person designated by such Beneficiary. If a Participant (or his Beneficiary) is not survived by any Beneficiary, the Plan Administrator shall distribute the aggregate amount of the balances of that Participant's Accounts to the legal representative or representatives of the estate of the Participant (or his Beneficiary). Notwithstanding any provision of the Plan to the contrary, if a Participant or Beneficiary under the Plan as of December 31, 1999 elects to change a Beneficiary designation to be effective on or after January 1, 2000, he must designate a common Beneficiary or Beneficiaries to receive the remaining aggregate balance of his Participant's Accounts if he dies before a total distribution of the balance is made to him. Until such time as a change in Beneficiary is made with respect to any of the Participant Accounts maintained for a Participant or Beneficiary under the Plan on December 31, 1999, such multiple designations shall continue.
Notwithstanding any other provision of the Plan, if a Participant or other person entitled to a distribution under the Plan is determined by a court of competent jurisdiction to be physically, mentally or legally incapacitated and unable to manage his financial affairs and claim is made by a conservator or other person legally charged by such court with the care of his person, the Plan Administrator shall make distributions to such conservator or other person. Any distribution made in accordance with this Section shall fully acquit and discharge all persons from all further liability on account thereof.
(a) date of expiration of a Tender Offer (other than an offer by Mead), if the offeror acquires Shares pursuant to such Tender Offer;
(b) the date of approval by the shareholders of Mead of a definitive agreement:
(i) for the merger or consolidation of Mead or any direct or indirect subsidiary of Mead into or with another corporation, other than:
(A) a merger or consolidation which would result in the voting securities of
Mead outstanding immediately prior thereto continuing to represent,
(I) in the case of a merger or consolidation of Mead, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or
(II) in the case of a merger or consolidation of any direct or indirect subsidiary of Mead, either by remaining outstanding if Mead continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof;
at least 51 percent of the combined voting power of the voting securities of Mead or such surviving or parent entity outstanding immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a recapitalization of Mead (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below) directly or indirectly, of securities of Mead (not including in the securities Beneficially Owned by such Person any securities acquired directly from Mead or its Affiliates) representing 25 percent or more of the combined voting power or Mead's then outstanding securities, or
(ii) for the sale or disposition of all or substantially all of the assets of Mead, other than a sale or disposition by Mead of all or substantially all of Mead's assets to an entity, at least 51 percent of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of Mead in substantially the same proportions as their ownership of Mead immediately prior to such sale or disposition;
(c) any Person is or becomes the Beneficial Owner of 25 percent or more of the voting power of the then outstanding securities of Mead (not including in the securities beneficially owned by such Person any securities acquired directly from Mead or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in subparagraph (b)(i)(A) or the date of authorization, by both a majority of the voting power of Mead and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
(d) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Mead) who were elected, or were nominated for election, by Mead's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of Mead immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of Mead immediately following such transaction or series of transactions.
(i) Mead or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit plan of Mead or any of its Affiliates,
(iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the shareholders of Mead in substantially the same proportions as their ownership of stock of Mead.
The Committee reserves the right to amend the Plan at any time, except that no amendment shall reduce a Participant's Participant Account balances to less than the amounts that he would have been entitled to receive on the later of the effective date of the amendment or the date on which the amendment is adopted. The Plan will terminate on the date on which it is terminated by the Committee, provided, however, that:
(a) at least two Crediting Options shall be maintained until the aggregate balances of all Participant Accounts have been distributed; and
(b) distributions from the Plan shall continue to be made under Section 8 or Section 9, as the case may be, pursuant to elections previously made by Participants or as otherwise provided under Section 8 or 9.
The Crediting Options available under the Plan as of January 1, 2000 are:
Type Fund Managed By --------- ---------- (1) Money Market PacMutual (2) Managed Bond PIMCO (3) Multi Strategy J.P. Morgan (4) Equity Income J.P. Morgan (5) Equity Index Bankers Trust (6) Small Cap Stock Cap Guardian Trust Equity Fund (7) Growth L.T. Janus Capital (8) International Morgan Stanley |
A-1 Purpose. The purpose of this Supplement A is to modify certain ------- provisions of the Plan as they apply to: (1) Participants in the Plan as of December 31, 1999; and (2) Beneficiaries of deceased Participants who are eligible to receive distributions from the Plan as of January 1, 2000. ("Supplement A Individuals"). A-2 Effective Date. This Supplement A shall be effective as of January 1, -------------- 2000. A-3 Plan Modifications. Notwithstanding any other provision of the Plan, ------------------ the Plan, as applied to a Supplement A Individual, is modified as follows: (1) his Crediting Options shall continue to be changed by writing filed with the Plan Administrator on or before the last business day of February, May, August or November and will be effective as of the first day of the following calendar quarter; (2) his Crediting Option election shall apply separately to each of his Accounts; (3) his Accounts shall be adjusted monthly; and (4) the term "Accounting Date" means the last business day of each calendar quarter. In all other respects the foregoing provisions of the Plan shall be applicable to Supplement A Individuals. A-4 Change of Status. A Supplement A Individual's status as such shall be ---------------- irrevocably revoked: (1) automatically, effective as of the effective date of any election to change an Adjustment Portion in accordance with paragraph 6.2(b) of the Plan; or (2) effective as of the date the Supplement A Individual elects to revoke his status as such in accordance with rules, if any, established by the Plan Administrator. |
AMENDMENT TO
THE MEAD CORPORATION
DIRECTORS CAPITAL ACCUMULATION PLAN
WHEREAS, The Mead Corporation ("Mead') heretofore established The Mead Corporation Directors Capital Accumulation Plan (the "Plan") and subsequently amended the Plan, and
WHEREAS, Mead desires to further amend the Plan pursuant to the power reserved to Mead's Compensation Committee by subsection 12 of the Plan;
NOW THEREFORE, the Plan is hereby amended, effective as of October 26, 2001 as follows:
1. Section 3.2 is revised to delete the last two sentences and add the following in substitute thereof:
Except as provided in the Plan, each Annual Election to Participate shall be irrevocable by the Participant after the last day of the calendar month preceding its effective date. The term "Distribution Period" means, with respect to any Participant Account, a period of 5, 10, 15 or 20 calendar years (and includes a one-day period on which a lump sum amount is distributed on or after a Change in Control) as elected by the Participant for whom the Account is maintained.
Subject to Section 8.1 (except as specifically otherwise provided in this Section 3.2), a Participant may revise an Annual Election to Participate with respect to the Distribution Period, the calendar year during which the Distribution Period commences and reduce or delay an Interim Distribution as follows:
(i) prior to a Change in Control, a Participant may revise a previously elected Distribution Period and the calendar year during which distributions are made for a Participant Account (such revision being permitted to include receiving all or a portion of a Participant Account in a lump sum following a Change in Control and prior to employment termination), provided that any such revision is effective only for distributions on or following a Change in Control and with respect to the balance of a Participant Account on a Change in Control.
(ii) at least three months prior to termination of service as a Director (whether before or after a Change in Control), a Participant may (A) revise (1) the Distribution Period or (2) the calendar year during which distributions commence following such termination with respect to the balance of a Participant Account on termination of service and (B) reduce or delay an Interim Distribution payable following employment termination.
A Participant can revise an Annual Election to Participate in
accordance with this subsection on a form furnished by and filed with
the Plan Administrator at any time prior to the date stated in (i) or
(ii), as applicable, in this subsection 3.2.
2. Section 8.1 is revised to delete the word "irrevocably" in the first sentence and to restate the last sentence to read as follows:
The term "Distribution Payment Date" means July 20 of each year, except that if an election is filed in accordance with subsection 3.2 with respect to distributions following a Change in Control, the term includes July 20 of the year selected by a Participant to receive a lump sum distribution.
3. Section 12 is revised to (i) delete the word "and" at the end of (a), (ii) add a semi colon at the end of (b) and (iii) add the following:
(c) a Participant's right to revise Distribution Payment Date(s) in accordance with Subsection 3.2 shall continue.
Exhibit 10.xxxix
CERTIFICATE SCHEDULE
GROUP NUMBER: 960000945G
POLICYHOLDER: CT-0000000004
EMPLOYER: THE MEAD CORPORATION
CERTIFICATE NUMBER: 005722786A
INSURED: _____________________
CERTIFICATE DATE: JAN 01, 2000
ISSUE AGE OF THE INSURED: ____________
RATING CLASS: UNISMOKE
FACE AMOUNT:________________
MINIMUM FACE AMOUNT: $100,000
MINIMUM INCREASE IN FACE AMOUNT: 25,000
DEATH BENEFIT OPTION: OPTION B
ANNUAL PLANNED PERIODIC PREMIUM:____________
ELIGIBILITY PERIOD: 0 DAYS
LOAN INTEREST RATE PER YEAR, PAYABLE IN ARREARS: 8%
MINIMUM LOAN AMOUNT: $500
PREMIUM EXPENSE CHARGE: ACTUAL STATE PREMIUM TAX RATE, CURRENTLY
MAXIMUM ADMINISTRATION EXPENSE CHARGE PER CERTIFICATE: $4.00 PER MONTH
MORTALITY TABLE:
100% OF THE 1980 COMMISSIONERS STANDARD ORDINARY MORTALITY TABLE B,
AGE LAST BIRTHDAY
GUARANTEED INTEREST RATE: 4% PER YEAR, MONTHLY EQUIVALENT 00327
COVERAGE IS PROVIDED FROM THE EFFECTIVE DATE OF THE CERTIFICATE TO THE INSUREDS AGE 95 OR THE INSUREDS PRIOR DEATH. WHEN ANY OF THE ADDITIONAL BENEFITS ABOVE CEASE, THE MONTHLY DEDUCTION WILL BE REDUCED BY THE COST OF THAT ADDITIONAL BENEFIT COVERAGE WILL EXPIRE PRIOR TO THE INSUREDS AGE 95 IF PREMIUMS PAID AND INTEREST CREDITED ARE INSUFFICIENT TO CONTINUE COVERAGE TO SUCH TIME.
CERTIFICATE SCHEDULE CONTINUED
EXCESS INTEREST RATE:
FOR LOANED PORTIONS OF THE FUND VALUE:
THE EXCESS INTEREST RATE FOR LOANED PORTIONS OF THE FUND VALUE WILL BE DECLARED BY OUR BOARD OF DIRECTORS AND WILL BE BASED ON OUR ESTIMATES OF FUTURE INVESTMENT EARNINGS. THE RATE WILL BE DECLARED IN ADVANCE AND GUARANTEED FOR A PERIOD OF AT LEAST ONE MONTH. HOWEVER, THE RATE APPLIED WILL NOT BE LESS THAN THE GUARANTEED INTEREST RATE.
FOR UNLOANED PORTIONS OF THE FUND VALUE:
THE FOLLOWING RULES APPLY DURING THE FIRST TEN YEARS THAT THE CERTIFICATE
IS INFORCE.
NEW MONEY: THE EXCESS INTEREST RATE PLUS THE GUARANTEED RATE WILL NOT BE LESS THAN THE YIELD ON FIVE-YEAR TREASURY BONDS FOR THE FIRST FULL WEEK OF THE MONTH PRECEDING THE CALENDAR QUARTER FOR WHICH THE NEW MONEY EXCESS INTEREST RATE IS DECLARED. THE RATE SO DECLARED WILL BE APPLICABLE FOR NEW MONEY RECEIVED DURING THIS CALENDAR QUARTER UNTIL THE BEGINNING OF THE CORRESPONDING CALENDAR QUARTER IN THE NEXT CALENDAR YEAR. AT THAT TIME, NEW MONEY BECOMES OLD MONEY. FOR PURPOSES OF THIS RULE, NEW MONEY IS ANY PREMIUM RECEIVED DURING THE CALENDAR QUARTER.
OLD MONEY: THE EXCESS INTEREST RATE PLUS THE GUARANTEED RATE FOR THE UNLOANED PORTIONS OF THE FUND VALUE WILL NOT BE LESS THAN THE AVERAGE OF THE YIELD ON FIVE-YEAR TREASURY BONDS FOR THE FIRST FULL WEEK OF EACH CALENDAR QUARTER FOR THE TWENTY MOST RECENT CALENDAR QUARTERS, NOT INCLUDING THE QUARTER FOR WHICH THE CURRENT EXCESS INTEREST RATE IS DECLARED, LESS TWO TENTHS OF ONE PERCENT.
NOT WITHSTANDING THE ABOVE, IF THE AVERAGE YIELD AS DEFINED ABOVE IS LESS THAN 5%, THEN OUR BOARD OF DIRECTORS MAY, AT ITS DISCRETION, CREDIT INTEREST AT THE GUARANTEED RATE ONLY, WITH NO EXCESS INTEREST.
THE YIELD FOR THE FIVE-YEAR TREASURY BONDS WILL BE THE YIELD AS PUBLISHED IN THE "SALOMON BROTHERS BOND MARKET ROUND-UP". IN THE EVENT THAT THE "SALOMON BROTHERS BOND MARKET ROUND-UP" DISCONTINUES PUBLICATION OF THE YIELD, THEN OUR BOARD OF DIRECTORS MAY SUBSTITUTE ANOTHER REFERENCE SOURCE FOR THE RATE, AT THEIR DISCRETION. IN THE EVENT THAT THE UNITED STATES GOVERNMENT NO LONGER ISSUES FIVE-YEAR TREASURY BONDS, THEN OUR BOARD OF DIRECTORS MAY SUBSTITUTE ANOTHER TYPE OF UNITED STATES GOVERNMENT OBLIGATION, AT THEIR SOLE DISCRETION.
CERTIFICATE SCHEDULE CONTINUED
AFTER THE FIRST TEN YEARS THAT THE CERTIFICATE IS INFORCE, THE EXCESS INTEREST RATE FOR UNLOANED PORTION OF THE FUND VALUE WILL BE DECLARED BY OUR BOARD OF DIRECTORS AND WILL BE BASED ON OUR ESTIMATES OF OUR FUTURE INVESTMENT EARNINGS. THE RATE WILL BE DECLARED IN ADVANCE AND GUARANTEED FOR A PERIOD OF AT LEAST ONE MONTH. HOWEVER, THE RATE APPLIED WILL NOT BE LESS THAN THE GUARANTEED INTEREST RATE.
REDUCED PAID-UP COVERAGE - MORTALITY TABLE AND GUARANTEED INTEREST RATE:
100% OF THE 1980 COMMISSIONERS STANDARD ORDINARY MORTALITY TABLE B. AGE
LAST BIRTHDAY
GUARANTEED INTEREST RATE: 4.0%
PER YEAR: MONTHLY EQUIVALENT .00327
TABLE OF SURRENDER CHARGES
CERTIFICATE % INITIAL YEAR SURRENDER CHARGE 1 100% 2 80% 3 60% 4 40% 5 20% THEREAFTER 0% |
SURRENDER CHARGE: $ 3.08 PER $1,000 OF FACE AMOUNT
MINIMUM PARTIAL SURRENDER AMOUNT: $500
TITLE PAGE
INSURED:________________________
BENEFICIARY
TO________________________WIFE OF THE INSURED, AS PRIMARY, TO __________________ AND ___________________, CHILDREN OF THE INSURED AS SECONDARIES IN EQUAL SHARES.
OWNER
TABLE OF CONTENTS
Page Definitions................................................................... 4 General Provisions............................................................ 4 Owner Beneficiary Premium Provisions............................................................ 6 Grace Period.................................................................. 7 Reinstatement Proceeds...................................................................... 8 Death Benefit Provisions...................................................... 8 Optional Changes In An Insured's Coverage..................................... 9 Certificate Values............................................................10 Continuation Of Insurance.....................................................12 Surrender Provisions..........................................................12 Certificate Loans.............................................................14 Termination Or Discontinuance.................................................15 Income Settlement Options.....................................................15 Endorsements, If Any Riders, If Any |
CERTIFICATE SCHEDULE CONTINUED
TABLE OF DEATH BENEFIT FACTORS
PER $1,000 OF INSURED'S FACE AMOUNT
ATTAINED ATTAINED AGE FACTORS AGE FACTORS 18 7.04 57 2.10 19 6.83 58 2.04 20 6.63 59 1.99 21 6.44 60 1.94 22 6.25 61 1.89 23 6.06 62 1.84 24 5.88 63 1.80 25 5.69 64 1.75 26 5.52 65 1.71 27 5.34 66 1.67 28 5.17 67 1.64 29 5.00 68 1.60 30 4.84 69 1.57 31 4.68 70 1.53 32 4.53 71 1.50 33 4.38 72 1.47 34 4.24 73 1.44 35 4.10 74 1.42 36 3.97 75 1.39 37 3.84 76 1.37 38 3.72 77 1.35 39 3.60 78 1.32 40 3.48 79 1.30 41 3.37 80 1.29 42 3.27 81 1.27 43 3.17 82 1.25 44 3.07 83 1.23 45 2.97 84 1.22 46 2.88 85 1.20 47 2.80 86 1.19 48 2.71 87 1.17 49 2.63 88 1.16 50 2.56 89 1.14 51 2.48 90 1.13 52 2.41 91 1.11 53 2.34 92 1.09 54 2.28 93 1.07 55 2.21 94 1.04 56 2.15 95 1.00 |
CERTIFICATE SCHEDULE CONTINUED
TABLE OF MONTHLY GUARANTEED MAXIMUM COST OF INSURANCE RATES
PER $1,000 AMOUNT OF TERM INSURANCE
ATTAINED ATTAINED AGE RATE AGE RATE 18 0.138 57 1.005 19 0.143 58 1.088 20 0.145 59 1.178 21 0.145 60 1.280 22 0.143 61 1.394 23 0.142 62 1.526 24 0.139 63 1.675 25 0.137 64 1.839 26 0.135 65 2.016 27 0.134 66 2.203 28 0.135 67 2.400 29 0.137 68 2.610 30 0.139 69 2.842 31 0.143 70 3.103 32 0.149 71 3.405 33 0.156 72 3.753 34 0.163 73 4.149 35 0.173 74 4.586 36 0.185 75 5.055 37 0.198 76 5.548 38 0.214 77 6.059 39 0.233 78 6.594 40 0.253 79 7.170 41 0.274 80 7.808 42 0.298 81 8.527 43 0.322 82 9.343 44 0.348 83 10.252 45 0.377 84 11.235 46 0.407 85 12.274 47 0.438 86 13.356 48 0.473 87 14.478 49 0.510 88 15.640 50 0.553 89 16.852 51 0.600 90 18.132 52 0.653 91 19.516 53 0.714 92 21.058 54 0.781 93 22.898 55 0.852 94 25.343 56 0.927 |
CERTIFICATE SCHEDULE CONTINUED
For amounts which were fully underwritten, the risk factors below apply to the attained age rate table.
Class of Risk Risk Factor Class of Risk Risk Factor Class of Risk Risk Factor ------------- ----------- ------------- ----------- ------------- ---------- Standard 1.00 Class F 2.50 Class L 4.00 Class A 1.25 Class G 2.75 Class M 4.25 Class B 1.50 Class H 3.00 Class N 4.50 Class C 1.75 Class I 3.25 Class O 4.75 Class D 2.00 Class J 3.50 Class P 5.00 Class E 2.25 Class K 3.75 |
For guaranteed Issue, the guaranteed monthly cost of insurance rate is 100% of the above attained age rate table. For simplified acceptance, the guaranteed monthly cost of insurance rate is 100% of the above attained age rate table unless a greater class of risk factor is applicable.
DEFINITIONS
WE, OUR, US, COMPANY - Connecticut Mutual Life Insurance Company.
YOU OR YOUR - the Owner shown in the Certificate Schedule.
HOME OFFICE - Our office at 140 Garden Street, Hartford, Connecticut 06154.
AGE - age last birthday.
ATTAINED AGE - the Issue Age of an Insured shown on the Certificate Schedule increased by the number Certificate Years lapsed.
CERTIFICATE YEAR, CERTIFICATE ANNIVERSARY, CERTIFICATE MONTH - The Certificate Date is the date coverage begins for an Insured. Certificate months, years and anniversaries are computed from the Certificate Date.
MONTHLY ANNIVERSARY DAY - the same day of each calendar month as the Certificate Date.
INSURED means the insured shown in the Certificate Schedule.
AGE 95 means the Certificate Anniversary on or next following the Insured's 95th birthday.
DEBT means any outstanding Loan, plus any Loan Interest due or accrued.
WRITTEN REQUEST - a request in writing in a form satisfactory to us and received at our Home Office, 140 Garden Street, Hartford, Connecticut 06154.
GENERAL PROVISIONS
Certificate
This Certificate contains a summary of the terms of the Policy. Any changes or
amendments to the Policy which affect the coverage under this Certificate will
be described in an endorsement to this Certificate or a revised Certificate
furnished to you. This Certificate supersedes and replaces any previously issued
Certificate.
. All statements made by the Policyholder or by an Owner or an Insured will be deemed representations and not warranties. No statement made by any Insured will be used in any contest of coverage under the Policy unless a copy of the instrument containing such statement has been furnished to the Insured, if living, otherwise to the Beneficiary of the coverage being contested.
. No change in any Certificate will be valid unless it is submitted in writing and until it is approved by one of our officers.
. No agent may change or waive any provision of the Policy or this Certificate issued under the Policy.
. We may modify the terms and conditions of the Policy or this Certificate to conform to any new law or regulation affecting the Policy.
Owner
The Owner has the exclusive right to exercise all rights and privileges and to
receive all benefits under the Certificate during the lifetime of the Insured.
If no Owner designated under this Certificate is living and the Policy does not provide otherwise, the Owner will be the successor in interest to said Owner.
. If the Owner is an entity (other than a natural person) which ceases to exist, the Owner will be the successor in interest to said Owner.
Beneficiary
The Beneficiary is the Beneficiary shown in the Certificate Schedule unless
later changed.
. If no beneficiary survives an Insured, the Beneficiary will be the estate of
the Insured, unless the Certificate states otherwise.
. The interest of any Beneficiary will be subject to:
(1) any assignment of this Certificate which is binding on us; and
(2) any optional settlement agreement in effect at an Insured's death.
Change of Owner or Beneficiary
. While the Insured is alive you can change the Owner or the Beneficiary. Any
request for a change must be in writing to us.
. The change will take effect on the date the request is signed whether or not
the Insured is living when we receive the request at our Home Office. However,
the change will be subject to any payment made or actions taken by us before
receiving the request.
Misstatement of Age
If the age of the Insured has been misstated, we will adjust the amount of any
Death Benefit payable. The Death Benefit will be the benefit that would be
purchased by the most recent mortality charge at the Insured's correct age.
Incontestability
We cannot contest an Insured's coverage after it has been in force during the
lifetime of the Insured for a period of two years from the Certificate Date.
We cannot contest any optional increase in an Insured's coverage after the increase has been in force during the Insured's lifetime for two years after the Effective Date of the increase. After this Certificate has been in force for two years, any contest of an increase will be based solely on the application for such increase.
Suicide
If an Insured dies by suicide, whether sane or insane, within one year from the
Certificate Date, the proceeds we will pay will be limited to the premiums paid
less any Debt and less any Partial Surrenders.
If an Insured dies by suicide, whether sane or insane, within one year from the Effective Date of any optional increase in Face Amount, the amount we will pay with respect to such increase will be limited to its cost.
Assignment
You may assign this Certificate. Written notice of the terms of transfer or a
copy of any assignment must be filed at our Home Office. Until we receive such
notice we will not be required to take notice of or be responsible for any
transfer of interest in this Certificate by an assignment, agreement or
otherwise.
. We will not be responsible for the validity of any assignment.
. Any assignment made after the Insured's death will be valid only with our
consent.
Periodic Report
At least once a year we will furnish you a report which includes:
(1) the current status of this Certificate;
(2) all transactions in connection with this Certificate since the last report;
and
(3) any other information required by the state in which this Certificate was
delivered.
Illustration of Benefits and Values
Upon written request we will send you an illustration of future benefits and
values illustrated on both a guaranteed and current basis. The illustration may
also be based upon such assumptions as you may specify. We may limit the number
of such illustrations in any Certificate Year. We reserve the right to charge a
fee not to exceed $10.00 for each illustration.
Claims of Creditors
To the extent allowed by law, the amount held and the payments made by us shall
not be subject to the claims of any Insured's, Owner's or Beneficiary's
creditors.
PREMIUM PROVISIONS
Payment of Premiums
The initial premium for the Insured's coverage under the Group Policy must be
paid before the Certificate Date. Such premium is payable in advance at our Home
Office. The Policyholder may request a receipt signed by our President or
Secretary and countersigned by our authorized agent.
Certificate Planned Periodic Premiums
The Insured's planned periodic premium amount and frequency are shown on the
Certificate Schedule. Changes in frequency and increases or decreases in amount
of Planned Periodic Premium payments may be made by you. We reserve the right to
limit any increase in Planned Periodic Premiums as described in the Certificate
Premium Limits provision.
Certificate Unscheduled Premiums
Any premium we receive under this Certificate in an amount different from the
Planned Periodic Premium will be considered an unscheduled premium. Unscheduled
premium payments can be made at any time while this Certificate is in Force.
They will be credited to the Certificate Fund Value on the date we receive them,
subject to the limits described below.
Certificate Premium Limits
We may refuse to accept any Certificate Premium payment in any Certificate Year
which:
(1) would result in an increase in an Insured's Death Benefit by more than it
would increase the Fund Value as a result of the application of the Death
Benefit Factors, unless we receive evidence satisfactory to us of the
Insured's insurability; or
(2) would prevent the coverage under the Certificate from continuing to qualify as life insurance under the Internal Revenue Code of 1954, as amended.
If any premiums in excess of the limits described above are accepted, we may return them to you as soon as we determine that they are in violation of any of these limits.
GRACE PERIOD
Grace Period for Payment of Certificate Premiums If on any Certificate Monthly Anniversary Day, the Fund Value less any Debt, is not enough to cover the Monthly Deduction for the following month, a grace period of 61 days will be allowed for payment of any balance needed for the Monthly Deduction. If the balance needed is not paid within the grace period, the coverage under this Certificate will end without value at the end of the grace period. Notice of the required premium will be mailed to you and to any Assignee of record at your last known address(es) at least 30 days before the end of the grace period. If the Insured should die during the Grace Period, the death proceeds will be reduced by the required premium.
Reinstatement
If this Certificate terminates other than by maturity, or death of the Insured,
you may reinstate it within 5 years after the date of termination. We require
the following:
(1) a written application for reinstatement;
(2) evidence of the Insured's insurability satisfactory to us;
(3) payment of the amount that remained unpaid at the end of the grace period;
(4) a premium large enough to pay Monthly Deductions for at least three months
from the date of reinstatement.
The Certificate date of reinstatement will be the Certificate Monthly Anniversary on or next following our approval. If the Insured's coverage before the end of the grace period includes benefits provided by rider, such benefits will be reinstated subject to the terms of the rider.
The Fund Value on the date of reinstatement will be the amount provided by the Net Certificate Premium paid on reinstatement less the monthly deduction for the first certificate month following reinstatement. The Surrender Charge for the reinstated Policy will be based on the number of years the Insured's coverage was in force before the reinstatement. The time the coverage was not in force will not be counted.
DIVIDENDS
Each year, we will ascertain the surplus, if any, to be allotted on the Policy
as a dividend. It will be allotted as of the end of each Policy Year. If this
Policy ends, any surplus to be allotted as a final dividend may be reduced to
provide for a terminal claim reserve. The dividend and terminal claim reserve
will be in accordance with our rules then in effect.
The Certificate Owner may elect to have any surplus allotted on the Policy:
(1) to be paid in cash to the Certificate Owner; or
(2) to be used to pay any premium for coverage under the Policy; or
(3) to be converted into a participating paid-up addition to the face amount of
the Certificate.
The Certificate Owner may, at any time, surrender to us for cash any such
dividends outstanding. The cash amount will be equal to the reserve of the
paid-up additions.
Any dividends paid under the Policy will be used for the sole benefit of the Insureds.
We do not expect to pay dividends on the Policy.
PROCEEDS
General
Proceeds means the amount payable on the Maturity Date, upon Surrender or at the
death of the Insured prior to the Maturity Date.
. If the Insured is alive on the Certificate Maturity Date, the proceeds will
be the Fund Value on that date, less any Debt.
. If the Certificate is surrendered before the Certificate Maturity Date, the
proceeds will be the Surrender Value.
. The proceeds on the death of an Insured will be the Death Benefit, plus any
insurance provided by an additional benefit rider on the life of the Insured,
less any Debt. The Death Benefit is described in the Death Benefit provision.
. Proceeds may be subject to adjustment as provided in the Misstatement of Age,
Suicide and Grace Period provisions.
Settlement
. All amounts payable by us are payable only at our Home Office.
. Unless an optional settlement agreement is elected, proceeds will be paid in
a single sum.
. We may require the return of the Certificate before paying proceeds.
Interest on Death Proceeds
We will pay interest on death proceeds paid in a single sum from the Insured's
date of death to the date of payment. The rate of interest will not be less than
the current rate credited on death proceeds left on deposit with us under the
regular interest option or the rate required by law, but in no case less than 3%
a year.
DEATH BENEFIT PROVISIONS
Death Benefit
The Death Benefit will depend on the Death Benefit option in effect on the date
of the Insured's death.
Option A.
The Death Benefit is the Face Amount on the date of death, or, if greater, the
Fund Value on the date of death multiplied by the Death Benefit Factor for the
Insured's Attained Age at death.
Option B.
The Death Benefit is the Face Amount plus the Fund Value on the date of death,
or, if greater, the Fund Value on the date of death multiplied by Death
Benefit factor for the Insured's Attained Age at death.
. The Death Benefit Factors are listed in the Certificate Schedule.
. The Death Benefit Option in effect is shown in Insured's Certificate
Schedule.
Face Amount
The Initial Face Amount and the Minimum Face Amount are shown in the Certificate
Schedule. You may request a change in the Face Amount as described in the
Optional Changes in Face Amount provision.
OPTIONAL CHANGES IN COVERAGE
Optional Changes in Face Amount
The existing Face Amount may be increased or decreased by written request from
you. Any change will be effective on the Certificate Monthly Anniversary Day on
or next following the date we approve the request, unless you request a later
date. No change in the Face Amount is allowed in the first Certificate Year. We
will issue an endorsement to this Certificate to reflect any change.
. Decreases Any decrease in Face Amount is subject to the following conditions.
(1) no decrease is permitted until the first Certificate Anniversary;
(2) the Face Amount in effect after a decrease may never be less than the
Minimum Face Amount.
(3) any decrease will reduce the Face Amount in the following order:
(a) against any increases beginning with the most recent; and then
(b) against the Initial Face Amount.
. Increases Any increase in Face Amount is subject to the following conditions:
(1) submission of an application for an increase and satisfactory evidence of
insurability of the Insured.
(2) if the Fund Value, less any Debt, is not sufficient to continue the
coverage in force for three months at guaranteed rates of mortality and
interest, a premium sufficient to increase the Fund Value to such amount
is required.
(3) the minimum amount of any increase in Face Amount is shown in the
Certificate Schedule.
. Increases are not available if the Certificate Monthly Deduction is being waived under the terms of a waive rider.
Changing to Reduced Paid-Up Coverage
Prior to the Certificate Maturity Date, you may elect that the Insured's
coverage under the Group Policy be changed to a reduced paid-up status. The
following conditions will apply:
. The election must be made by a written request.
. If Death Benefit Option B is in effect on the date of request, it will be changed to Death Benefit Option A immediately prior to the Effective Date of the paid-up coverage and the Face Amount after such change shall be equal to the Face Amount prior to such change plus the Fund Value on the date of change.
. The Cash Value will be applied as a net single premium at the Insured's Attained Age to determine a paid-up Face Amount.
. The maximum amount of Cash Value that may be applied without evidence of insurability is the amount needed to provide a paid-up Face Amount not greater than the Death Benefit immediately prior to the Effective Date of the paid-up coverage. If the entire Cash Value is not applied to purchase the paid-up Face Amount, any excess Surrender Value will be refunded to the Insured.
. The Cash Value must be an amount that will provide a paid-up Face Amount of not less than the Minimum Face Amount shown on the Certificate Schedule.
The election will go into effect on the Certificate Monthly Anniversary Date on or next following the date we receive your election request.
. Once the election for reduced paid-up coverage goes into effect:
(1) we will not accept any further Certificate Premiums for the Insured's
coverage;
(2) no further optional changes in the Insured's coverage may be made;
(3) any Debt which existed on the date the coverage was changed to a reduced
paid-up status will be continued under the paid-up coverage and any loan
interest will be due and payable as described in the Certificate Loans
provision; and
(4) any additional benefits provided by rider will terminate.
(5) This Certificate may be reinstated as described in the Reinstatement
provision.
. We will issue an endorsement to the Certificate to reflect the election of the paid-up option.
. The endorsement will show the new paid-up Face Amount and the guaranteed cash value at age 95.
. If the entire Surrender Value is not applied to purchase the paid-up insurance, the excess Surrender Value will be refunded to you.
. The guaranteed net single premium rates will be based on the attained age and rating class of the Insured and the mortality table and guaranteed interest rate for the Reduced Paid-Up Coverage as shown in the Certificate Schedule. We may use a lower net single premium rate at our discretion.
. The paid-up coverage may be surrendered for its cash value less any debt at any time. The cash value of the paid-up coverage will equal the present value of future guaranteed benefits based on the mortality table and interest rate that are shown in the certificate schedule determined on the date of the change. If the paid-up coverage is surrendered within 30 days after a Certificate Anniversary, the cash value will not be less than the value on such anniversary.
. The paid-up coverage will be eligible for dividends.
CERTIFICATE VALUES
Fund Value
The Fund Value on the Certificate Date is the Initial Certificate Net Premium
paid less the Monthly Deduction for the first Certificate Month.
On any Certificate Monthly Anniversary Day, the Fund Value of an Insured's coverage will be equal to:
(1) the Fund Value on the prior Monthly Anniversary Day; plus
(2) one month's interest on item (1); plus
(3) the sum of net certificate premiums received at our Home Office since the
prior Monthly Anniversary Day; plus
(4) interest on item (3) from the date of receipt to the Certificate Monthly
Anniversary Day; less
(5) any Partial Surrenders plus Surrender Charge made on the Monthly Anniversary
Day; less
(6) the Monthly Deduction due on the Certificate Monthly Anniversary Day.
On any other day the Fund Value will be calculated in a consistent manner.
Net Certificate Premium
The net certificate premium is the premium paid less the Premium Expense Charge
shown in the Certificate Schedule.
Monthly Deduction
The Monthly Deduction due on any Monthly Anniversary Day is:
(1) the Cost of Insurance for the following month; plus
(2) the cost of any additional benefits provided by the rider for the following
month; plus
(3) the Administration Expense Charge shown in the Certificate Schedule.
Fund Value Interest Rate Calculations
. On each Certificate Monthly Anniversary Day we will credit interest
separately to the portion of the Fund Value equal to any existing Debt and
to the balance of the Fund Value.
. The Guaranteed Interest Rate is shown on the Certificate Schedule.
Excess Interest Rate
. An interest rate in excess of the Guaranteed Interest Rate may be applied in
the calculation of the Fund Value. Descriptions of how the excess interest
rate for the Loaned and Unloaned portions of the Fund Value are shown on the
Certificate Schedule.
. In no event will the interest rate credited to the Fund Value be less than the Guaranteed Interest Rate shown on the Certificate Schedule.
. All interest rates stated are effective annual rates. They will be applied to properly reflect the date of receipt of any Certificate Planned Periodic Premiums and any changes in Debt during a Certificate Month.
Cost of Insurance
The Cost of Insurance for an Insured is determined on a monthly basis on each
Certificate Monthly Anniversary Day. The Cost of Insurance is determined
separately for each of the following, in the order shown:
(1) the Initial Face Amount as follows:
(a) that part which is on a guaranteed issue basis; next
(b) that part which is on a simplified issue basis; next
(c) that part which is fully underwritten;
(2) each increase in Face Amount, successively, in the order in which it took effect; and
(3) any portion of the Insured's Death Benefit which is a result of the Death Benefit being equal to the Fund Value multiplied by the Death Benefit Factor.
The Cost of Insurance for each of (1), (2) and (3) above is calculated by multiplying its Cost of Insurance Rate by its Amount at Risk.
The "Amount at Risk" at the beginning of the Certificate Month is the difference
between:
(a) the Insured's Death Benefit that would have been payable in the event of the
Insured's death on that day divided by one plus the Guaranteed Monthly
Equivalent Interest Rate; and
(b) the Fund Value at the beginning of the Certificate Month, decreased by the monthly deduction for any additional benefit riders. The Fund Value for the Insured's coverage as described in (b) is applied in the order shown above in (1), (2) and (3) to determine the Amount at Risk for each. If the Fund Value when so applied equals or exceeds the Initial Face Amount there is no Amount at Risk for that Initial Face Amount and no Cost of Insurance for it. If the Fund Value when so applied equals or exceeds the Initial Face Amount plus an increase in Face Amount, there is no Amount at Risk for that increase and no cost of Insurance for it.
Cost of Insurance Rate
The monthly Cost of Insurance Rate is based on the Insured's attained age and
rating class. The rating class for the Insured's Initial Face Amount is the
Insured's rating class on the Certificate Date as shown in the Certificate
Schedule. The Insured's rating class for optional increases in Face Amount is
the Insured's rating class on the Effective Date of the Increase in Face Amount.
The rating class with the most recent Effective Date will apply to any portion
of the Death Benefit which is a result of the Death Benefit being equal to the
Fund Value on the date of death multiplied by the Death Benefit Factor.
Monthly Cost of Insurance Rates will be determined by us based on our expectations as to future mortality, interest, expenses, and persistency. We can change the rates from time to time, but they will never be more than the Monthly Guaranteed Cost of Insurance Rates shown on the Certificate Schedule. Any change in rates, and the way in which they are determined, will be made on a uniform basis for Insureds of the same age and rating class. We will file any such changes with the insurance supervisory official of the state in which the Certificate is delivered.
Cash Value
The Cash Value is the Fund Value less any Surrender Charge.
CONTINUATION OF INSURANCE
If Certificate premium payments are not continued, the coverage under this
Certificate will be continued as long as the Fund Value less any Debt is
sufficient to cover any Monthly Deductions. The coverage will not be continued
beyond the Certificate Maturity Date. If the Insured is living on the
Certificate Maturity Date, the Fund Value, if any, less any Debt will be paid to
you.
The planned periodic premium may not provide coverage to the Certificate Maturity Date even if the planned periodic premium is paid as scheduled. The period for which coverage under the Certificate will continue will be effected by the following:
(a) the amount, timing and frequency of premium payments;
(b) change in the Face Amount and Death Benefit Options;
(c) change in interest credits and Monthly Deduction charges;
(d) deductions for additional riders; and
(e) any Partial Surrenders or loans.
SURRENDER PROVISIONS
Surrender Value
The Insured's coverage may be surrendered by you for its Surrender Value at any
time while the Insured is living and before the Maturity Date.
The Surrender Value is the Cash Value less any Debt.
We may postpone payment for up to 6 months after we receive your request unless the surrender is to pay premiums to us. We will not defer a payment for more than 6 months after we receive your written request. If we defer a payment for 10 working days or more, we will pay interest at a rate not less than 3% a year for the period the payment is deferred.
Surrender Charge
The Surrender Charge is a charge made against the Fund Value in the event of
Total or Partial Surrender. The amounts and durations of the Surrender Charges
are shown in the Table of Surrender Charges shown in the Certificate Schedule.
The Surrender Charges applicable to the Initial Face Amount are the charges shown in the Table of Surrender Charges.
For any requested increase in the Face Amount that is approved, Surrender Charges will apply to the amount of the increase. Such charges will be the charges shown in the Table of Surrender Charges effective on the date the requested increase is approved and for the duration shown in the Table of Surrender Charges.
For a Partial Surrender a Surrender Charge will be made against the amount of the Fund Value that is surrendered. This Surrender Charge will be applied if the amount of the Partial Surrender is greater than 25% of the Fund Value in any certificate year. This charge will be in proportion to the charge for the total Surrender Value. The proportion will be computed as the amount of Surrender Value that is surrendered divided by the total Surrender Value. When a partial Surrender is made, future Surrender Charges will be reduced in the same proportion.
Any requested decrease in the Face Amount will not reduce the applicable Surrender Charges.
Surrender
. You may surrender this Certificate by:
(1) filing a written request in a form acceptable to us; and
(2) returning the Certificate to our Home Office.
. The date of surrender will be the Certificate Monthly Anniversary on or next following our receipt of the request.
. The surrender proceeds equal the Surrender Value on the date of surrender.
However, the surrender proceeds within 30 days after a Certificate
Anniversary will not be less than:
(1) the surrender proceeds on that Certificate Anniversary; plus
(2) any unscheduled premiums received since that Anniversary but not yet
credited; less
(3) any increase in Debt or any partial surrender since that Anniversary.
. This Certificate of Insurance will terminate as of the date of surrender.
Partial Surrender
You may make a Partial Surrender of the Surrender Value by written request. The
date of the Partial Surrender will be the Monthly Anniversary Day on or next
following our receipt of the request.
. Partial Surrenders are subject to the following conditions:
(1) Partial Surrenders are not allowed before the first Certificate
Anniversary.
(2) The amount of any Partial Surrender must be at least the Minimum Partial
Surrender amount shown in the Certificate Schedule.
(3) A Partial Surrender may not result in a remaining Cash Value equal to less than twelve Monthly Deductions.
. The amount of a Partial Surrender, plus the Surrender Charge, will be deducted from the Fund Value. This will result in a reduction of the Cash Value and Death Benefit.
If Death Benefit Option A is in effect on the Monthly Anniversary Day on which a Partial Surrender is made, the Face Amount will be reduced by the amount of the Partial Surrender. The reduction will apply first against any increases beginning with the most recent and then against the Initial Face Amount.
Partial withdrawals are not allowed if the resulting decrease in the specified amount goes below the minimum shown in the following schedule.
Basis of Values
Minimum Cash Values are based on the mortality table and Guaranteed Interest
Rate shown in the Certificate Schedule.
The Cash Values are not less than the minimum values required by the law in the state in which this Certificate is delivered. Where required, the method of determining Cash Values has been filed with the insurance supervisory official of the state in which this Certificate is delivered.
CERTIFICATE LOANS
General
On or after the first Certificate Anniversary, while the Certificate is in
force, you may, by written request, borrow against it. We will lend any sum up
to the Certificate's Maximum Loan Value, less existing Debt. This Certificate
will be the sole security for the loan.
Maximum Loan Value
The Maximum Loan Value on any date is the Cash Value on such date less three
Monthly Deductions.
Interest Rate
A loan bears interest at the Loan Interest Rate shown on the Certificate
Schedule.
Interest accrues daily from the date of the loan and is due at the end of each Certificate Year. If the interest is not paid when it is due, it will be added to the loan and will bear interest at the same loan rate.
Minimum Loan Amount
The Minimum Loan Amount as shown on the Certificate Schedule.
Repayment
You may repay all or part of a Certificate Loan at any time while the Insured is
alive and the insurance is in force. Every payment to us will be considered a
premium payment unless clearly marked for Debt repayment.
Termination
This Certificate will terminate if Debt equals or exceeds the Cash Value unless
an additional premium or loan repayment is made. The due date for such payment
will be the 61st day after the date when Debt first equals or exceeds the Cash
Value. We will mail 30 days notice of pending termination to your last known
address
and the last known address(es) of any assignee of record. The notice will indicate the loan repayment or premium required to keep this Certificate in force. Unless we receive such amount by the 62nd day, the Certificate will terminate without value on that date.
We may postpone payment for up to 6 months after we receive your request unless the loan is to pay premiums to us. We will not defer a payment for more than 6 months after we receive your written request.
TERMINATION OR DISCONTINUANCE
Termination of the Policy
The Policy will terminate without the right of reinstatement on the date the
coverage ends for the last remaining Insured under the Policy.
Continuation of Insured's Coverage After Discontinuance If the Group Policy is discontinued, any insurance then in effect will remain in force under the Policy, provided it is not cancelled or surrendered by the Owner. The continuance of the coverage is subject to the Continuation of Insurance provision of this Certificate. All insurance that is continued will be automatically changed from deduction from wages to a direct billing status. Certificate Premiums will then be payable directly to us.
Individual Termination
The Insured's coverage under the Policy will terminate when one of the following
occur:
(1) the Insured dies;
(2) the Insured's coverage matures;
(3) the date the Insured's coverage ends without value;
(4) the date the Insured's coverage is surrendered for its Surrender Value; or
(5) the date the Group Policy terminates or is discontinued, except as provided
in the Continuance of Insured's Coverage After Discontinuance provision.
If, for any reason, contributions for coverage are no longer being deducted from wages, the status of the insurance under this Certificate will change from deduction of contributions to direct billing.
INCOME SETTLEMENT OPTIONS
If elected, we will pay proceeds under the terms of an optional settlement agreement, rather than in a single sum. You may elect such an agreement before proceeds become payable. If proceeds are at least $10,000, the payee may elect such an agreement if none is in effect. The following options are available.
Option 1. Installments for a Special Period. Equal payments for a stated number of years, not more than 30. The amount is shown in the Option 1 Table.
Option 2. Life Income. Equal monthly payments while the payee is alive, as shown in the Option 2 Table. Payments with or without installments certain may be elected.
Option 3. Interest. Interest payments while the payee is alive or for a shorter period. Interest will be paid at an effective rate of 3% per year. Payments are increased by any additional interest earnings we may apportion. For each $1,000 of proceeds, interest payments equal $30 annually, $14.89 semi-annually, $7.42 quarterly and $2.47 monthly.
Option 4. Installments of Specified Amount. Equal annual, semi-annual, quarterly or monthly payments for a stated amount. Payments will be made until the proceeds and interest are all paid out. The total yearly amount paid must be at least 6% of the original proceeds. Any unpaid balance left with us will be increased by interest at 3% a year. We will also add any additional interest earnings we may apportion.
Option 5. Life Income With Installment Refund. Equal monthly payments as shown in the Option 5 Table. Payments will be made until the total amount paid equals the proceeds and as long thereafter as the payee lives.
Option 6. Joint Life Income for the Payee and One Other Person With Two-Thirds to Survivor. (One Hundred and Twenty Months Certain). Based on the Option 6 Table, we will pay a joint income to the payee and one other person designated at exercise of this option. We will pay the income for 120 months certain, and as long afterwards as both payees are living. After the death of either payee, and following payment of any remaining income certain, monthly payments equal to two-thirds of monthly income will be continued to the surviving payee for life. The Alternate Life Income and Payment Provisions paragraphs apply to this option.
Alternate Life Income
If Option 2, 5 or 6 is elected, the payee may elect to receive an alternate life
income. This is instead of receiving income based upon the rates shown in the
following tables. The election must be made at the time the income is to begin.
. The alternate life income will be more than the monthly income provided by a new single premium immediate annuity (first payment immediate), based upon our published rate then in use.
Payment Provisions
. If an optional settlement agreement becomes effective, we will issue a
supplementary contract in exchange for this Certificate and agreement. The
contract will show the rights and benefits provided by the agreement.
. We may change the payment basis to quarterly, semi-annual, or annual if any payment is less than $50.
. Payments under Option 2, 5 and 6 will be subject to proof of the payees' age.
. The first installment under Options 1, 2, 4, 5 and 6 is due as of the date the proceeds become payable.
. Installments certain under Options 1, 2, 5 and 6 are computed at 3% interest compounded annually. This does not apply when alternate life income is selected.
Installments certain, after the first, will be increased by additional interest earnings we may apportion. If the alternate life income is elected, we will not increase payments certain by additional interest earnings.
Number Annual Monthly of Years Installment Installment ----------------------------------------- 1 $1000.00 $84.47 2 507.39 42.86 3 343.23 28.99 4 261.19 22.06 5 212.00 17.91 6 179.22 15.14 7 155.83 13.16 8 138.31 11.68 9 124.69 10.53 10 113.82 9.61 11 104.93 8.86 12 97.54 8.24 13 91.29 7.71 14 85.95 7.26 15 81.33 6.87 16 77.29 6.53 17 73.74 6.23 18 70.59 5.96 19 67.78 5.73 20 65.25 5.51 21 62.98 5.32 22 60.92 5.15 23 59.04 4.99 24 57.33 4.84 25 55.76 4.71 26 54.31 4.59 27 52.97 4.47 28 51.74 4.37 29 50.60 4.27 30 49.53 4.18 ----------------------------------------- |
------------------------------------------------------------------------------------------------------------------------ MONTHLY LIFE INCOME PER $1,000 OF PROCEEDS ------------------------------------------------------------------------------------------------------------------------ OPTION 2 OPTION 5 OPTION 2 OPTION 5 --------------------------------------------- -------------------------------------------- PAYEE Without Number of With PAYEE Without Number of With Age Installments Monthly Installment Age Installments Monthly Installment Nearest Certain Installments Refund Nearest Certain Installments Refund Birthday Certain Birthday Certain 120 120 ------------------------------------------------------------------------------------------------------------------------ 20 $3.00 $2.99 $2.98 55 $ 4.49 $4.44 $4.27 21 3.01 3.01 2.99 56 4.58 4.52 4.34 22 3.03 3.03 3.01 57 4.68 4.61 4.42 23 3.05 3.05 3.03 58 4.79 4.71 4.50 24 3.07 3.07 3.05 59 4.90 4.81 4.58 25 3.09 3.09 3.07 60 5.01 4.91 4.67 26 3.12 3.11 3.09 61 5.14 5.02 4.76 27 3.14 3.14 3.11 62 5.27 5.14 4.86 28 3.16 3.16 3.14 63 5.42 5.26 4.96 29 3.19 3.18 3.16 64 5.57 5.39 5.07 30 3.21 3.21 3.18 65 5.74 5.53 5.19 31 3.24 3.24 3.21 66 5.91 5.67 5.31 32 3.27 3.27 3.23 67 6.10 5.81 5.43 33 3.30 3.30 3.26 68 6.30 5.96 5.56 34 3.33 3.33 3.29 69 6.51 6.12 5.70 35 3.37 3.36 3.32 70 6.74 6.28 5.85 36 3.40 3.39 3.35 71 6.98 6.44 6.00 37 3.44 3.43 3.38 72 7.24 6.61 6.16 38 3.47 3.47 3.42 73 7.51 6.79 6.33 39 3.51 3.51 3.45 74 7.81 6.96 6.51 40 3.56 3.55 3.49 75 8.12 7.14 6.70 41 3.60 3.59 3.53 76 8.46 7.31 6.90 42 3.65 3.63 3.56 77 8.82 7.49 7.10 43 3.69 3.68 3.61 78 9.21 7.67 7.32 44 3.74 3.73 3.65 79 9.62 7.84 7.58 45 3.80 3.78 3.69 80 10.07 8.01 7.80 46 3.85 3.83 3.74 81 10.54 8.17 8.05 47 3.91 3.89 3.79 82 11.05 8.33 8.32 48 3.97 3.94 3.84 83 11.59 8.48 8.60 49 4.03 4.01 3.89 84 12.16 8.62 8.90 50 4.10 4.07 3.95 85 12.78 8.75 9.22 51 4.17 4.14 4.01 and over 52 4.25 4.21 4.07 53 4.32 4.28 4.13 54 4.41 4.36 4.20 ------------------------------------------------------------------------------------------------------------------------ |
-------------------------------------------------------------------------------------- MONTHLY INCOME FOR EACH $1,000 OF PROCEEDS - OPTION 6 -------------------------------------------------------------------------------------- FIRST PAYEE SECOND PAYEE - Age Nearest Birthday ------------------------------------------------------------------------------ Age Nearest Birthday 50 51 52 53 54 55 56 57 58 59 60 -------------------------------------------------------------------------------------- 45 $3.63 $3.66 $3.68 $3.70 $3.72 $3.74 $3.77 $3.79 $3.82 $3.84 $3.86 46 3.66 3.68 3.70 3.73 3.75 3.77 3.80 3.82 3.85 3.87 3.90 47 3.69 3.71 3.73 3.75 3.78 3.80 3.83 3.85 3.88 3.90 3.93 48 3.71 3.73 3.76 3.78 3.81 3.83 3.86 3.88 3.91 3.94 3.96 49 3.74 3.76 3.79 3.81 3.84 3.86 3.89 3.92 3.94 3.97 4.00 50 3.77 3.79 3.82 3.84 3.87 3.89 3.92 3.95 3.98 4.00 4.03 51 3.79 3.82 3.85 3.87 3.90 3.93 3.96 3.98 4.01 4.04 4.07 52 3.82 3.85 3.88 3.90 3.93 3.96 3.99 4.02 4.05 4.08 4.11 53 3.85 3.88 3.91 3.94 3.97 3.99 4.02 4.05 4.08 4.12 4.15 54 3.88 3.91 3.94 3.97 4.00 4.03 4.06 4.09 4.12 4.16 4.19 55 3.91 3.94 3.97 4.00 4.03 4.07 4.10 4.13 4.16 4.20 4.23 56 3.94 3.97 4.01 4.04 4.07 4.10 4.13 4.17 4.20 4.24 4.27 57 3.97 4.01 4.04 4.07 4.11 4.14 4.17 4.21 4.24 4.28 4.32 58 4.01 4.04 4.07 4.11 4.14 4.18 4.21 4.25 4.29 4.32 4.36 59 4.04 4.07 4.11 4.14 4.18 4.22 4.25 4.29 4.33 4.37 4.41 60 4.07 4.11 4.14 4.18 4.22 4.26 4.29 4.33 4.37 4.41 4.45 61 4.11 4.14 4.18 4.22 4.26 4.30 4.34 4.38 4.42 4.46 4.50 62 4.14 4.18 4.22 4.26 4.30 4.34 4.38 4.42 4.46 4.51 4.55 63 4.18 4.21 4.25 4.29 4.34 4.38 4.42 4.47 4.51 4.56 4.60 64 4.21 4.25 4.29 4.33 4.38 4.42 4.47 4.51 4.56 4.60 4.65 65 4.25 4.29 4.33 4.37 4.42 4.46 4.51 4.56 4.61 4.65 4.70 66 4.28 4.33 4.37 4.41 4.46 4.51 4.55 4.60 4.65 4.71 4.76 67 4.32 4.36 4.41 4.45 4.50 4.55 4.60 4.65 4.70 4.76 4.81 68 4.36 4.40 4.45 4.50 4.54 4.59 4.65 4.70 4.75 4.81 4.87 69 4.39 4.44 4.49 4.54 4.59 4.64 4.69 4.75 4.80 4.86 4.92 70 4.43 4.48 4.53 4.58 4.63 4.68 4.74 4.80 4.85 4.91 4.97 -------------------------------------------------------------------------------------- |
*Second Payee - Ages 61 to 70 appears on the next page.
The rate for any combination of ages not stated in the table will be furnished on request.
PAYEE SECOND PAYEE - Age Nearest Birthday ------------------------------------------------------------- Age Nearest Birthday 61 62 63 64 65 66 67 68 69 70 ------------------------------------------------------------------------ 45 $3.89 $3.91 $3.94 $3.97 $3.99 $4.02 $4.04 $4.07 $4.09 $4.12 46 3.92 3.95 3.97 4.00 4.03 4.05 4.08 4.10 4.13 4.16 47 3.95 3.98 4.01 4.03 4.06 4.09 4.12 4.14 4.17 4.19 48 3.99 4.02 4.04 4.07 4.10 4.13 4.15 4.18 4.21 4.24 49 4.02 4.05 4.08 4.11 4.14 4.17 4.19 4.22 4.25 4.28 50 4.06 4.09 4.12 4.15 4.18 4.21 4.24 4.27 4.29 4.32 51 4.10 4.13 4.16 4.19 4.22 4.25 4.28 4.31 4.34 4.37 52 4.14 4.17 4.20 4.23 4.26 4.29 4.32 4.36 4.39 4.42 53 4.18 4.21 4.24 4.27 4.31 4.34 4.37 4.40 4.43 4.47 54 4.22 4.25 4.29 4.32 4.35 4.39 4.42 4.45 4.48 4.52 55 4.26 4.30 4.33 4.37 4.40 4.44 4.47 4.50 4.54 5.57 56 4.31 4.34 4.38 4.41 4.45 4.49 4.52 4.56 4.59 4.63 57 4.35 4.39 4.43 4.46 4.50 4.54 4.57 4.61 4.65 4.68 58 4.40 4.44 4.48 4.51 4.55 4.59 4.63 4.67 4.71 4.74 59 4.45 4.49 4.53 4.57 4.61 4.65 4.69 4.73 4.77 4.80 60 4.49 4.54 4.58 4.62 4.66 4.70 4.75 4.79 4.83 4.87 61 4.54 4.59 4.63 4.68 4.72 4.76 4.81 4.85 4.89 4.94 62 4.60 4.64 4.69 4.73 4.78 4.82 4.87 4.91 4.96 5.00 63 4.65 4.70 4.74 4.79 4.84 4.89 4.93 4.98 5.03 5.07 64 4.70 4.75 4.80 4.85 4.90 4.95 5.00 5.05 5.10 5.15 65 4.76 4.81 4.86 4.91 4.96 5.02 5.07 5.12 5.17 5.22 66 4.81 4.86 4.92 4.97 5.03 5.08 5.14 5.19 5.25 5.30 67 4.87 4.92 4.98 5.04 5.09 5.15 5.21 5.27 5.32 5.38 68 4.92 4.98 5.04 5.10 5.16 5.22 5.28 5.34 5.40 5.46 69 4.98 5.04 5.10 5.16 5.23 5.29 5.35 5.42 5.48 5.54 70 5.04 5.10 5.17 5.23 5.30 5.36 5.43 5.50 5.56 5.63 ------------------------------------------------------------------------ |
The rate for any combination of ages not stated in the table will be furnished on request.
Provisions detailed in Attachment 1 and forming a part of this Plan govern in the event of a Change in Control of the company.
1. The S&P 500 Index
2. Mead's Forest Products peers (FP Peers), comprising of those members of the Forest and Paper Industry Compensation Association (FPICA) whose major business lines are similar to the Mead business segments, and for which public financial reporting is provided by Value Line Reports. For the Plan cycle ending December 31, 2002, these companies are identified as:
Boise Cascade
Bowater
Georgia Pacific
International Paper
Potlatch
Smurfit/Stone Container
Temple-Inland
Westvaco
Weyerhaeuser
Willamette
For the current plan period, the TSR of Mead, of the S&P 500 Index and of the FP Peers are each measured at the end of each calendar quarter for the two-year period:
------------------------------------------------------------- Period Quarter Ending TSR Measured ------------------------------------------------------------- 1 Mar 31, 2001 From 03/31/1999 to 03/31/2001 ------------------------------------------------------------- 2 Jun 30, 2001 From 06/30/1999 to 06/30/2001 ------------------------------------------------------------- 3 Sep 30, 2001 From 09/30/1999 to 09/30/2001 ------------------------------------------------------------- 4 Dec 31, 2001 From 12/31/1999 to 12/31/2001 ------------------------------------------------------------- 5 Mar 31, 2002 From 03/31/2000 to 03/31/2002 ------------------------------------------------------------- 6 Jul 30, 2002 From 06/30/2000 to 06/30/2002 ------------------------------------------------------------- 7 Sep 30, 2002 From 09/30/2000 to 09/30/2002 ------------------------------------------------------------- 8 Dec 31, 2002 From 12/31/2000 to 12/31/2002 ------------------------------------------------------------- |
Mead's TSR ranking with respect to the FP Peers is averaged for all eight periods to determine an Overall Mead FP Rank; and Mead's TSR relative to that of the S&P 500 Index is averaged for all eight periods to determine an Overall Mead Competitive Return.
A single matrix (Attachment 3) determines the Payout Factor on the basis of the Overall Mead FP Rank and the Overall Mead Competitive Return. Interpolation between matrix values will be calculated.
The long term incentive payout is determined as:
L. T. Incentive Payout = L.T. Incentive Target X Payout Factor
1. The Committee may, but is not obligated to, determine a ZERO payout if Mead TSR for the two-year performance period is negative, even if Mead TSR exceeds either or both comparator groups; or
2. There shall be no payout to any participant if corporate earnings are negative in the final year of the performance period, after adjustments for special items by the Committee; or
3. Payout is capped at 200% of target, for any level of performance.
The CEO recommends all individual payouts to the Compensation Committee of the Board of Directors for approval. Payouts for the CEO and the COO are approved by the Board of Directors.
Form of payout will be determined by the Compensation Committee. The Committee anticipates that the payout will normally be delivered to all participants as a minimum of 25% restricted stock (with a 3-year vesting period), and the balance delivered in either cash, or deferred into Mead's Executive Capital Accumulation Plan, or as restricted stock, as elected by each participant. The Board of Directors may require a mandatory deferral of all or any portion of the payout to ensure full deductibility of compensation paid to any executive.
Attachment 1
Notwithstanding any foregoing Plan provision to the contrary (and notwithstanding any lack of satisfaction of any condition or requirement which would otherwise apply to an award), immediately upon the occurrence of a Change in Control (as defined in the next section hereof), (i) if the Change in Control occurs after the completion of the performance period ending December 31, 2002 (the "Performance Period"), any award with respect to the Performance Period which has already been determined, but has not yet been paid or deferred, shall be immediately paid in full in cash to the respective Participant, (ii) if the Change in Control occurs after the completion of the Performance Period, if no awards have been determined with respect to the Performance Period, the amount (if any) of each such award shall be immediately determined in accordance with the provisions of the Plan and shall be immediately paid in full in cash to the respective Participant, and (iii) if the Change in Control occurs during the Performance Period (the `Change-in-Control Performance Period'), each Participant shall immediately be paid a pro-rata award for the Performance Period, the amount of which shall equal the product of multiplying the Participant's individual incentive target by a fraction, the numerator of which shall be the number of days in the Change-in-Control Performance Period which have elapsed as of the date of the Change in Control, and the denominator of which shall be the number of days in the Performance Period. Notwithstanding the immediately preceding sentence, no amounts shall be paid pursuant thereto which would, in the opinion of counsel selected by Mead's independent auditors, constitute `parachute payments' within the meaning of Section 280G(b)(2)(A) of the Internal Revenue Code (the `Code') and, when added to any other `parachute payments' which would be received by the Participant pursuant to the terms of any other plan, arrangement or agreement with Mead, any person whose actions result in a change in control of Mead or any person affiliated with Mead or such person, would be subject to the tax imposed by Section 4999 of the Code.
Notwithstanding any provision to the contrary in the Plan, upon and after the occurrence of a Change in Control, (i) the Compensation Committee shall have no power to cause a Participant's award to be paid in any manner other than as a cash lump sum, (ii) the Board of Directors shall have no power to require a mandatory deferral of all or any portion of the award, and (iii) neither the Compensation Committee, the Board of Directors nor any other person or entity shall have the right to terminate or amend the Plan in any manner which would adversely affect the rights or expectancies of a Participant with respect to payment of an award pursuant to this section, as in effect immediately before the Change in Control.
(i) date of expiration of a Tender Offer (as defined below), other than an offer by Mead, if the offeror acquires Shares (as defined below) pursuant to such Tender Offer;
(ii) the date of approval by the shareholders of Mead of a definitive agreement:
(x) for the merger or consolidation of Mead or any direct or indirect subsidiary
of Mead into or with another corporation, other than (1) a merger or
consolidation which would result in the voting securities of
Mead outstanding immediately prior thereto continuing to represent ((i) in the case of a merger or consolidation of Mead, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of Mead, either by remaining outstanding if Mead continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of Mead or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of Mead (or similar transaction) in which no Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of Mead (not including in the securities Beneficially Owned by such Person any securities acquired directly from Mead or its Affiliates) representing 25% or more of the combined voting power of Mead's then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of Mead, other than a sale or disposition by Mead for all or substantially all of Mead's assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of Mead in substantially the same proportions as their ownership of Mead immediately prior to such sale or disposition.
(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of Mead (not including in the securities beneficially owned by such Person any securities acquired directly or indirectly from Mead or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x)(1) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of Mead and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Mead) who were elected, or were nominated for election by Mead's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
Notwithstanding the foregoing, a `Change in Control' shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of Mead immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of Mead immediately following such transaction or series of transactions.
`Affiliate' shall have the meaning set forth in Rule 12b-2 promulgated under
Section 12 of the Exchange Act.
`Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the Exchange Act.
`Exchange Act' shall mean the Securities Exchange Act of 1934, as amended from time to time.
`Person' shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) Mead or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Mead or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of Mead in substantially the same proportions as their ownership of stock of Mead.
`Shares' shall mean shares of common stock, without par value, of The Mead Corporation.
`Tender Offer' shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time.
Attachment 2
2001-2002 Plan Period --------------------- 2001 Payout Targets ------------------- Grade Incentive Target ----- ---------------- 33 $834,700 32 692,700 31 571,200 30 471,000 29 385,900 28 316,800 27 260,400 26 214,800 25 178,300 24 146,000 23 125,800 22 75,700 21 59,300 |
Payout - % of Target -------------------- +35% 1.70 0% 136% 153% 170% 187% 200% 200% +30% 1.60 0% 128% 144% 160% 176% 192% 200% +25% 1.50 0% 120% 135% 150% 165% 180% 195% +20% 1.40 0% 112% 126% 140% 154% 168% 182% +15% 1.30 0% 104% 117% 130% 143% 156% 169% +10% 1.20 0% 96% 108% 120% 132% 144% 156% +5% 1.10 0% 88% 99% 110% 121% 132% 143% Overall Mead Average 1.00 0% 80% 90% 100% 110% 120% 130% Industrial Return -5% 0.90 0% 72% 81% 90% 99% 108% 117% -10% 0.80 0% 64% 72% 80% 88% 96% 104% Mead 2-Yr TSR -15% 0.70 0% 56% 63% 70% 77% 84% 91% Relative to S&P 500 -20% 0.60 0% 48% 54% 60% 66% 72% 78% average of 8 periods -25% 0.50 0% 40% 45% 50% 55% 60% 65% -30% 0.40 0% 32% 36% 40% 44% 48% 52% -35% 0.30 0% 24% 27% 30% 33% 36% 39% -40% 0.20 0% 16% 18% 20% 22% 24% 26% -45% 0.10 0% 8% 9% 10% 11% 12% 13% -50% 0.00 0% 0% 0% 0% 0% 0% 0% ------------------------------------------------------------------------------------ Multipliers 0 0.80 0.90 1.00 1.10 1.20 1.30 ------------------------------------------------------------------------------------ 7-11 6 5 4 3 2 1 Median Top Max Payout: 200% Overall Mead FP Rank Mead vs. Forest Products Ranking of 2-Year TSR - average of 8 periods |
AMENDMENT TO
THE MEAD CORPORATION
THE CORPORATE LONG TERM INCENTIVE PLAN
2002
WHEREAS, The Mead Corporation maintains The Mead Corporation The Corporate Long Term Incentive Plan 2002 (the "Plan") and amendment of the Plan is now deemed to be desirable;
NOW, THEREFORE, the Plan be, and it hereby is, amended as follows:
1. Effective August 24, 2001, the last sentence of the first paragraph of Attachment 1 to the Plan is deleted.
2. Effective August 28, 2001, the following new second paragraph shall be inserted after the first paragraph of Attachment 1 to the Plan:
"The Corporation having entered into an Agreement and Plan of Merger dated as of August 28, 2001, with MW Holding Corporation, Michael Merger Sub, Westvaco Corporation, and William Merger Sub (the "Merger Agreement"), any Change in Control which would otherwise occur in accordance with the provisions of this Attachment 1 upon any approval by the shareholders of the Corporation of the Merger Agreement shall, for all purposes of the first paragraph of this Attachment 1 be deemed to occur instead at the Effective Time (as defined in the Merger Agreement). Further, any pro-rata award for the Change-in-Control Performance Period which, pursuant to clause (iii) of such first paragraph, thereby becomes payable immediately after the Effective Time shall be based on the level of actual achievement of the payout factors calculated by the funding formula through the Effective Time and not on any participant's individual incentive target."
EXECUTED at Dayton, Ohio this 7th day of November, 2001.
THE MEAD CORPORATION
By: /s/ A. ROBERT ROSENBERGER ----------------------------- Its: Vice President (Human Resources) ATTEST: /s/ DAVID L. SANTEZ ------------------- Assistant Secretary |
Exhibit 10.xxxxi
TABLE OF CONTENTS
SECTION 1 - GENERAL.......................................................... 1 1.1 Purpose and Effective Date.................................... 1 1.2 Plan Funding and Administration............................... 1 1.3 Applicable Law................................................ 2 1.4 Gender and Number............................................. 2 1.5 Assignment.................................................... 2 1.6 Plan Year..................................................... 2 1.7 Supplements................................................... 2 1.8 Plan Elections................................................ 2 SECTION 2 - PARTICIPATION.................................................... 3 2.1 Participation Requirement..................................... 3 2.2 Continued Participation....................................... 3 2.3 Participation Not Contract of Employment...................... 3 SECTION 3 - DEFERRAL OF INCOME............................................... 4 3.1 Deferred Income Amount........................................ 4 3.2 Certain Conditions Relating to Income Deferral................ 4 3.3 Annual Election to Participate................................ 6 3.4 Additional Elections to Defer................................. 6 SECTION 4 - PARTICIPANT ACCOUNTS............................................. 7 SECTION 5 - ROLLOVERS........................................................ 7 5.1 ICEP Rollovers................................................ 7 5.2 SERP Rollovers................................................ 7 5.3 Excess Plan Rollovers......................................... 7 5.4 415 Plan Rollovers............................................ 8 SECTION 6 - CREDITING OPTIONS................................................ 8 6.1 Establishment of Crediting Options............................ 8 6.2 Participant Change of Crediting Options....................... 9 SECTION 7 - ADJUSTMENT OF PARTICIPANT ACCOUNTS............................... 9 7.1 Adjustment of Participants' Participant Accounts.............. 9 7.2 Matching Amount............................................... 10 7.3 Quarterly Statement of Participant Accounts Balances.......... 10 SECTION 8 - DISTRIBUTION OF PARTICIPANT ACCOUNTS TO PARTICIPANTS............. 11 8.1 Annual Distributions.......................................... 11 8.2 Interim Distributions......................................... 11 |
8.3 Emergency Distributions....................................... 12 8.4 Elective Distributions........................................ 13 8.5 Change in Control Distributions............................... 13 8.6 Withholding................................................... 13 SECTION 9 - DISTRIBUTION OF PARTICIPANT ACCOUNTS TO BENEFICIARIES............ 13 9.1 Distribution to Beneficiary................................... 13 9.2 Beneficiary................................................... 14 SECTION 10 - DISTRIBUTIONS TO INCAPACITATED PERSONS.......................... 14 SECTION 11 - SECTION 162(m) LIMITATION ON DISTRIBUTIONS...................... 14 11.1 Tentative Section 162(m) Determination........................ 14 11.2 Tentative Determination Amount Not in Excess of 162(m) Limit.. 15 11.3 Tentative Determination Amount in Excess of 162(m) Limit...... 15 11.4 Change in Control............................................. 16 11.5 Certain Definitions........................................... 18 SECTION 12 - DISPUTE RESOLUTION.............................................. 19 12.1 Notice of Denial.............................................. 19 12.2 Notice of Appeal.............................................. 19 12.3 Decision on Appeal............................................ 19 SECTION 13 - AMENDMENT AND TERMINATION....................................... 20 |
EXHIBIT I - CREDITING OPTIONS
SUPPLEMENT A
(a) who is employed in the United States of America or to whom the Plan has been extended by the Compensation Committee of the Board of Directors of Mead (the "Committee") or its delegate; and
(b) who either:
(i) is compensated by his Employer at a salary grade at least equivalent to Mead's salary grade 19; or
(ii) has compensation that exceeds an amount equal to the amount taken into account for purposes of section 415 of the Internal Revenue Service Code of 1986 (the "Code") and who is designated by the Committee or its delegate as an Eligible Employee, but only for such period as the Committee or its delegate shall decide.
The term "Affiliate" means any entity during the period that it is, along with
Mead, a member of a controlled group of corporations, a controlled group of
trades and businesses, an affiliated service group or any other entity
designated by the Secretary of the Treasury (as described in sections 414(b),
414(c), 414(m), and 414(o), respectively, of the Code.
discretion, may establish or maintain a trust to pay such amounts, which trust shall be subject to the claims of Mead's unsecured general creditors in the event of Mead's bankruptcy or insolvency; and provided, further, that Mead shall remain responsible for the payment of any such amounts which are not so paid by any such trust. The Plan shall be administered by a "Plan Administrator" who is appointed by, and serves at the pleasure of, the Committee and who has the rights, powers and duties with respect to the Plan that are hereinafter set forth and such other rights, powers and duties as are reasonably necessary for the administration of the Plan. As of the effective date, the Plan Administrator is the Vice President-Human Resources of Mead except as to distributions and dispute resolution matters relating to him.
Plan will be deemed to have been properly made and filed with the Plan Administrator if made by such method as the Plan Administrator may require.
(a) is an Eligible Employee;
(b) has executed an Annual Participation Election form (as described in subsection 3.3); and
(c) has executed such forms as the Plan Administrator may determine necessary to permit Mead (at its discretion and expense) to maintain a policy of insurance on his life under the terms of which Mead shall be the policyholder, owner and beneficiary.
Each employee of the Employers who becomes an Eligible Employee on or after January 1, 2000 will become a Participant in the Plan (on a prospective basis) on the earlier of the date on which the Plan Administrator has received his executed Annual Participation Election form if that date is within 30 days of the date he becomes an Eligible Employee or on any subsequent January 1 if he then meets the requirements set forth in paragraphs (a) through (c) above.
(a) as of the first day of the month next following the date on which he is no longer an Eligible Employee; and
(b) for any period during which his right to make "Before-tax Contributions" under The Mead 401(k) Plan (the "401(k) Plan") is suspended by reason of
a Financial Hardship distribution made to him under the terms of that plan.
(a) to defer a portion of the amount of the base salary, the annual incentive pay (which, for purposes of the Plan, shall include any spot bonus) and the cash portion of the long-term incentive pay that would otherwise be payable to him for services performed during the period that the Annual Election to Participate is effective;
(b) whether or not he has made an election pursuant to paragraph (a) above, a Participant who has elected to make the maximum Before-tax Contribution that he is permitted under the 401(k) Plan for the period for which the Annual Election to Participate is effective may elect to make a 401(k) Top-Up Contribution for that period; and
(c) to defer a retention bonus or a severance benefit.
The term "401(k) Top-Up Contribution" means an
additional deferral amount which begins in the month
that the maximum Before-tax contribution allowed
under the 401(k) Plan is reached. The monthly amount
of the additional deferral is calculated by
multiplying the deferral percentage elected under the
401(k) Plan by the salary and incentive compensation
that would be eligible for Before-tax Contributions
to the 401(k) Plan (but for section 402(g) of the
Code and any 401(k) Plan limitations) for the month
and subtracting from such product the amount, if any,
of Before-tax Contributions to the 401(k) Plan for
such month. The deferral percentage used for purposes
of the 401(k) Top-Up Contribution is the percentage
currently elected under the 401(k) Plan for
Before-tax Contributions. Subject to the
provisions of paragraph 7.1(d), a Participant's
401(k) Top-Up Contribution and a portion of his other
additional deferral during any month shall be
credited with a "Matching Amount" (as described in
subsection 7.2).
(a) The amount of a Participant's annual base salary deferral:
(i) shall not exceed 80 percent of the amount of that salary, determined as of the last day of the month during which the election is made;
(ii) shall, at a Participant's election made on his written Annual Election to Participate, be automatically increased by an amount equal to all or any part of the amount of the income realized by the Participant on the exercise of non-qualified stock options and the exercise of incentive stock options immediately followed by the sale of the underlying shares, subject to the limitations of paragraph (i) next above and to the following:
(A) the amount of increased deferral shall:
(1) not exceed an amount equal to the Participant's remaining unpaid annual base salary for the year of exercise;
(2) be made in equal monthly increments, beginning with the calendar month next following the month of exercise of the stock option and continuing for the remainder of the calendar year;
(B) a Participant may not elect an increased deferral with respect to income realized on account of his exercise of a stock option during the month of December of any calendar year; and
(C) if a Participant is subject to stock ownership guidelines established by Mead, the increased deferral
contemplated by this paragraph 3.2(a) is conditioned on the Participant's conformance with those guidelines.
(b) a Participant may defer up to 80 percent of the amount of his annual incentive pay and of any spot bonus paid in lieu of incentive pay;
(c) a Participant may defer up to 100 percent of the amount of the cash portion of his long-term incentive pay, spot bonuses (other than spot bonuses paid in lieu of incentive pay), retention bonuses and severance benefits;
(d) all deferrals shall be expressed in multiples of 1 percent; and
(e) in no event shall any portion of the amount of any
excess Before-tax Contribution returned to a
Participant in accordance with the terms of the
401(k) Plan be subject to deferral under this Plan.
(a) the deferral percentages elected by the Participant in accordance with paragraphs 3.1(a) and (b) for that calendar year;
(b) the percentage of his total deferral that is allocated to each of the "Crediting Options" (as described in subsection 6.1) selected by him;
(c) the "Distribution Period" (as defined below) that he elects to be applicable with respect to the amounts deferred pursuant to that Annual Election to Participate and, if applicable, the "Interim Distribution" amount or percentage that he elects to have applicable to such amounts as permitted by subsection 8.2; and
(d) subject to the provisions of paragraph 8.1(b), the calendar year in which the Distribution Period is to commence.
Each Annual Election to Participate shall be irrevocable by the Participant after the last day of the calendar month preceding its effective date. The term "Distribution Period" means, with
respect to any Participant Account, a period of 5, 10, 15 or 20 calendar years as elected by the Participant for whom the Account is maintained.
(a) with respect to retention bonuses, within 30 days after the employee is notified that he is eligible for such bonus, but before such amount becomes payable; and
(b) with respect to a severance benefit, before such benefit has been agreed.
For each calendar year, the Plan Administrator shall cause a Participant Account to be established and maintained by Mead in the name of each Participant to reflect the amount of any deferrals that are the subject of the Participant's Annual Election to Participate for that calendar year and of any Matching Amounts attributable thereto. A Participant's Participant Accounts shall be periodically adjusted as provided in subsection 7.1 and shall be distributed to a Participant in accordance with the provisions of Section 8 or, in the event of the Participant's death, to his Beneficiary in accordance with the provisions of Section 9.
(a) In no event may a Participant elect to transfer to this Plan any amount credited under the Supplement to the ICEP.
(b) No ICEP rollover to the Plan shall be permitted after January 1, 1995.
(c) A Participant's Distribution Period with respect to his ICEP Participant Account shall commence on the date on which payment of his balance under the ICEP would have commenced.
available as of January 1, 2000 are set forth on Exhibit I of the Plan. On advance written notice to the Participants, the Committee may cause any Crediting Option to be prospectively deleted and may designate other Crediting Options. In no event shall the assets of a Crediting Option be constituted of securities of any Employer or Affiliate. Should any Employer determine to invest any of its funds in the asset or assets constituting a Crediting Option, amounts representing such investment shall be the sole property of that Employer and shall be subject to the claims of its general creditors. No Participant or Beneficiary shall have any claim or right with respect to any such amounts. Notwithstanding the foregoing provisions of this subsection 6.1, upon and after the occurrence of a "Change in Control" (as described in subsection 11.4), the Committee shall have no power to eliminate any Crediting Option which was available immediately prior to the Change in Control and, if any Crediting Option shall be eliminated through circumstances beyond the control of the Committee, the Committee shall immediately add a Crediting Option which will provide an investment return equal to one-hundred-twenty percent (120%) of the long-term Federal interest rate determined monthly under section 1274(d) of the Code, compounded semi-annually.
(a) with respect to amounts to be credited to any Participant Account on and after that day pursuant to subsection 3.1, the portion (expressed as a multiple of 1 percent) thereof that is to be adjusted pursuant to subsection 7.1 to reflect the investment experience of any Crediting Option (referred to below as an "Adjustment Portion"); and
(b) that all or a portion (expressed as a multiple of 1 percent) of the amount of the aggregate balances of the Participant Accounts then maintained for his benefit that constitutes an Adjustment Portion be changed to another Adjustment Portion.
preceding Accounting Date and with the amount of any forfeiture resulting from an Elective Distribution made to him pursuant to the provisions of subsection 8.4, which charges shall be made, pro rata, according to the Adjustment Portions of that Participant Account;
The term "Accounting Date" means each business day.
(a) in the case of a Participant whose employment terminates at any age on account of "disability" (as determined by the Plan Administrator) or for any reason at or after reaching age 55 years, on or about the Distribution Payment Date of the calendar year elected by him; and
(b) in all other cases, and notwithstanding any previous election, on or about the Distribution Payment Date of the calendar year next following
the calendar year during which his termination of employment occurs;
and continuing for the number of calendar years constituting the Distribution Period he has irrevocably elected with respect to that Participant Account. If on the June 30 preceding his initial Distribution Payment Date the aggregate balances of a Participant's Participant Accounts is an amount that is less than $50,000, those balances shall be distributed to him on or about his initial Distribution Payment Date in a single lump sum. The amount of the annual "Installment Distribution" from a Participant Account for a calendar year shall be equal to the balance of that Participant Account as of June 30 of that year, divided by the number of calendar years remaining in the Distribution Period elected by the Participant with respect to that Account. Notwithstanding any of the foregoing to the contrary, if a Participant with respect to whom a Participant Account has been established for calendar year 1995 or 1996 has elected a Distribution Period that is less than 10 calendar years, then, at any time, but at least one year prior to his initial Distribution Payment Date, he may elect to have his Distribution Period with respect to any such Participant Account occur over a period of 10 or more years commencing on the previously elected initial Distribution Payment Date. The term "Distribution Payment Date" means July 20 of each year.
(a) through reimbursement or compensation by insurance or otherwise;
(b) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship;
(c) by cessation of deferrals under the Plan; or
(d) other distributions to be made to the Participant from the Plan.
A determination with respect to whether a Participant has experienced an Unforeseeable Emergency shall be made:
(a) in the case of a Participant employed, or last employed, by an Employer at a salary grade below salary grade 24 (exclusive of an elected officer of an Employer) and his Beneficiary, the Plan Administrator; and
(b) in the case of a Participant employed, or last employed, by an Employer at salary grade 24 or above or as an elected officer of an Employer and their Beneficiaries, the Committee.
The provisions of Section 12 of the Plan shall not be applicable with respect to any determination made pursuant to this subsection 8.3.
Plan Administrator, to receive an Elective Distribution from one or more of his Participant Accounts, provided, however, that if a Participant receives an Elective Distribution he shall forfeit an amount equal to 20 percent of the amount of that Elective Distribution, which amount shall be charged to his Participant Accounts as provided in paragraph 7.1(a).
(a) if distribution has commenced prior to his death, continue to be distributed in annual Installment Distributions, to the deceased Participant's Beneficiary with respect to the Participant Account during the remainder of the Distribution Period applicable to that Account as if the deceased Participant had lived; and
(b) if distribution has not commenced prior to his death, be distributed in annual Installment Distributions commencing on the Distribution Payment Date and over the Distribution Period elected by the deceased Participant with respect to that Participant Account.
cancel any Beneficiary designation form signed and filed earlier. The same also applies to a Beneficiary designation filed by a Beneficiary. If a Beneficiary survives a Participant and such Beneficiary dies before a total distribution of the aggregate balances of the Participant's Accounts (without a contingent or successive Beneficiary designated by a Participant), the balance will be paid to any person designated by such Beneficiary. If a Participant (or his Beneficiary) is not survived by any Beneficiary, the Plan Administrator shall distribute the aggregate amount of the balances of that Participant's Accounts to the legal representative or representatives of the estate of the Participant (or his Beneficiary). Notwithstanding any provision of the Plan to the contrary, if a Participant or Beneficiary under the Plan as of December 31, 1999 elects to change a Beneficiary designation to be effective on or after January 1, 2000, he must designate a common Beneficiary or Beneficiaries to receive the remaining aggregate balance of his Participant's Accounts if he dies before a total distribution of the balance is made to him. Until such time as a change in Beneficiary is made with respect to any of the Participant Accounts maintained for a Participant or Beneficiary under the Plan on December 31, 1999, such multiple designations shall continue.
Notwithstanding any other provision of the Plan, if a Participant or other person entitled to a distribution under the Plan is determined by a court of competent jurisdiction to be physically, mentally or legally incapacitated and unable to manage his financial affairs and claim is made by a conservator or other person legally charged by such court with the care of his person, the Plan Administrator shall make distributions to such conservator or other person. Any distribution made in accordance with this Section shall fully acquit and discharge all persons from all further liability on account thereof.
(a) amounts otherwise distributable to the Participant under the Plan as of that Distribution Payment Date; and
(b) all other compensation expected to be payable to the Participant and deductible by the Employers for that calendar year;
will exceed the maximum deductible amount permitted with respect to the Participant for that calendar year by section 162(m) of the Code. Based on the Chairperson's tentative decision, the provisions of subsection 11.2 or 11.3, as the case may be, shall become applicable with respect to the Participant. Notwithstanding the foregoing, the provisions of this Section shall not be applicable with respect to any distribution payable from the Plan during any calendar year following the calendar year in which a "Change in Control" (as defined in subsection 11.4) occurs.
before that last day of that calendar year. Any such distribution shall be charged to the Participant's Participant Account from which it was distributed as of the Accounting Date coincident with or next following the date of distribution.
(a) date of expiration of a Tender Offer (other than an offer by Mead), if the offeror acquires Shares pursuant to such Tender Offer;
(b) the date of approval by the shareholders of Mead of a definitive agreement:
(i) for the merger or consolidation of Mead or any direct or indirect subsidiary of Mead into or with another corporation, other than:
(A) a merger or consolidation which would result in the voting securities of Mead outstanding immediately prior thereto continuing to represent,
(I) in the case of a merger or consolidation of Mead, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or
(II) in the case of a merger or consolidation of any direct or indirect subsidiary of Mead, either by remaining outstanding if Mead continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof;
at least 51 percent of the combined voting power of the voting securities of Mead or such surviving or parent entity outstanding immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a recapitalization of Mead (or similar transaction) in which no
Person (as defined below) is or becomes the Beneficial Owner (as defined below) directly or indirectly, of securities of Mead (not including in the securities Beneficially Owned by such Person any securities acquired directly from Mead or its Affiliates) representing 25 percent or more of the combined voting power or Mead's then outstanding securities, or
(ii) for the sale or disposition of all or substantially all of the assets of Mead, other than a sale or disposition by Mead of all or substantially all of Mead's assets to an entity, at least 51 percent of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of Mead in substantially the same proportions as their ownership of Mead immediately prior to such sale or disposition;
(c) any Person is or becomes the Beneficial Owner of 25 percent or more of the voting power of the then outstanding securities of Mead (not including in the securities beneficially owned by such Person any securities acquired directly from Mead or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in subparagraph (b)(i)(A) or the date of authorization, by both a majority of the voting power of Mead and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and
(d) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Mead) who were elected, or were nominated for election, by Mead's shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year
period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of Mead immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of Mead immediately following such transaction or series of transactions.
(i) Mead or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit plan of Mead or any of its Affiliates,
(iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the shareholders of Mead in substantially the same proportions as their ownership of stock of Mead.
offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time.
(a) the provisions of the Plan upon which the resolution was based; and
(b) an explanation of this claims procedure.
If Mead rejects a Claimant's application for failure to furnish certain necessary materials or information, the written notice to the Claimant will explain what additional material is needed and why, and advise the Claimant that he may refile a proper application. In the event that Mead fails to take any action on the Claimant's initial application within 90 days after receipt, the application will be deemed denied, and the Claimant's appeal rights under subsection 11.2 will be in effect as of the end of such period.
(a) in the case of a Participant employed, or last employed, by an Employer at a salary grade below salary grade 24 (exclusive of an elected officer of an Employer) and of his Beneficiary, a panel of 3 persons appointed by the Plan Administrator; and
(b) in the case of a Participant employed, or last employed by an Employer at salary grade 24 or above or as an elected officer of an Employer and their Beneficiaries, the Chairperson of the Committee.
The Committee reserves the right to amend the Plan at any time, except that no amendment shall reduce a Participant's Participant Account balances to less than the amounts that he would have been entitled to receive on the later of the effective date of the amendment or the date on which the amendment is adopted. The Plan will terminate on the date on which it is terminated by the Committee, provided, however, that:
(a) at least two Crediting Options shall be maintained until the aggregate balances of all Participant Accounts have been distributed; and
(b) distributions from the Plan shall continue to be made under Section 8 or Section 9, as the case may be, pursuant to elections previously made by Participants or as otherwise provided under Section 8 or 9.
EXHIBIT I
TO
THE MEAD CORPORATION
The Crediting Options available under the Plan as of January 1, 2000 are:
Type Fund Managed By --------- ---------- (1) Money Market PacMutual (2) Managed Bond PIMCO (3) Multi Strategy J.P. Morgan (4) Equity Income J.P. Morgan (5) Equity Index Bankers Trust (6) Small Cap Stock Cap Guardian Trust Equity Fund (7) Growth L.T. Janus Capital (8) International Morgan Stanley |
A-1 Purpose. The purpose of this Supplement A is to modify certain ------- provisions of the Plan as they apply to: (1) Participants in the Plan as of December 31, 1999; and (2) Beneficiaries of deceased Participants who are eligible to receive distributions from the Plan as of January 1, 2000. ("Supplement A Individuals"). A-2 Effective Date. This Supplement A shall be effective as of January 1, -------------- 2000. A-3 Plan Modifications. Notwithstanding any other provision of the Plan, ------------------ the Plan, as applied to a Supplement A Individual, is modified as follows: (1) his Crediting Options shall continue to be changed by writing filed with the Plan Administrator on or before the last business day of February, May, August or November and will be effective as of the first day of the following calendar quarter; (2) his Crediting Option election shall apply separately to each of his Accounts; (3) his Accounts shall be adjusted monthly; and (4) the term "Accounting Date" means the last business day of each calendar quarter. In all other respects the foregoing provisions of the Plan shall be applicable to Supplement A Individuals. A-4 Change Of Status. A Supplement A Individual's status as such shall be ---------------- irrevocably revoked: (1) automatically, effective as of the effective date of any election to change an Adjustment Portion in accordance with paragraph 6.2(b) of the Plan; or (2) effective as of the date the Supplement A Individual elects to revoke his status as such in accordance with rules, if any, established by the Plan Administrator. |
AMENDMENT TO
THE MEAD CORPORATION
EXECUTIVE CAPITAL ACCUMULATION PLAN
WHEREAS, The Mead Corporation ("Mead") heretofore established The Mead Corporation Executive Capital Accumulation Plan (the "Plan") and subsequently amended the Plan, and
WHEREAS, Mead desires to further amend the Plan pursuant to the power reserved to Mead's Compensation Committee by subsection 13 of the Plan;
NOW THEREFORE, the Plan is hereby amended, effective as of October 26, 2001 as follows:
1. Section 3.3 is revised to delete the last two sentences following (d) and add the following in substitution thereof:
Except as provided in the Plan, each Annual Election to Participate shall be irrevocable by the Participant after the last day of the calendar month preceding its effective date. The term "Distribution Period" means, with respect to any Participant Account, a period of 5, 10, 15 or 20 calendar years (and includes a one-day period on which a lump sum amount is distributed on or after a Change in Control) as elected by the Participant for whom the Account is maintained.
Subject to Section 8.1 (except as specifically otherwise provided in this Section 3.3), a Participant may revise an Annual Election to Participate with respect to the Distribution Period, the calendar year during which the Distribution Period commences and reduce or delay an Interim Distribution as follows:
(i) prior to a Change in Control, a Participant may revise a previously elected Distribution Period and the calendar year during which distributions are made for a Participant Account (such revision being permitted to include receiving all or a portion of a Participant Account in a lump sum following a Change in Control and prior to employment termination), provided that any such revision is effective only for distributions on or following a Change in Control and with respect to the balance of a Participant Account on a Change in Control or
(ii) at least three months prior to employment termination (whether before or after a Change in Control), a Participant may (A) revise (1) the Distribution Period or (2) the calendar year during which distributions commence following employment termination with respect to the balance of a Participant Account on employment termination and (B) reduce or delay an Interim Distribution payable following employment termination.
A Participant can revise an Annual Election to Participate in
accordance with this subsection on a form furnished by and filed with
the Plan Administrator at any time prior to the date stated in (i) or
(ii), as applicable, in this subsection 3.3.
2. Section 3.4(b) is revised to read as follows:
(b) with respect to a severance benefit payable prior to a Change in Control, the election must be made before such benefit has been agreed and with respect to a severance benefit payable after a Change in Control, the election must be made at least three months prior to employment termination.
3. Section 8.1 is revised to delete the word "irrevocably" in the first sentence and to restate the last sentence to read as follows:
The term "Distribution Payment Date" means July 20 of each year, except that if an election is filed in accordance with subsection 3.3 with respect to distributions following a Change in Control, the term includes July 20 of the year selected by a Participant to receive a lump sum distribution.
4. Section 13 is revised to (i) delete the word "and" at the end of (a), (ii) add a semi colon at the end of (b) and (iii) add the following:
(c) a Participant's right to revise Distribution Payment Date(s) in accordance with Subsection 3.3 shall continue;
(d) a Participant's right to defer severance pay in accordance with Subsection 3.4 (b) shall continue; and
(e) a Participant's right to rollover other benefits into the Plan in accordance with Section 5 shall continue.
Exhibit 13
MEADWESTVACO Merger
MeadWestvaco Corporation was formed on January 29, 2002, as a result of a merger of equals between The Mead Corporation and Westvaco Corporation, creating a global company with leading positions in packaging, coated and specialty papers, consumer and office products, and specialty chemicals. As part of the merger, the company has announced plans to achieve significant cost savings and operational synergies of $325 million by the end of two years of combined operations.
Mead and Westvaco announced their agreement in August 2001. The transaction was approved by the Boards of Directors of both companies and was approved by the shareholders of both companies at special meetings held on January 28, 2002. Under the terms of the transaction, Mead shareholders received one share of MeadWestvaco stock for each share of Mead stock held, and Westvaco shareholders received 0.97 shares of MeadWestvaco stock for each share of Westvaco stock held. Mead shareholders also received a cash payment of $1.20 per share. The merger was structured as a stock-for-stock exchange and will be accounted for as an acquisition of Mead by Westvaco. Note A in the Consolidated Financial Statements provides summary pro forma data and details on the merger accounting.
Recent Developments
On March 4, 2002, MeadWestvaco announced plans to permanently shut down four coated paper machines and related equipment from its paper segment in Luke, MD, and Chillicothe, OH. The company expects restructuring and other merger-related charges to earnings taken in 2002 to approximate $100 million, all of which relates to the former Westvaco operations, of which about $40 million is expected to be taken in the first quarter. Of the total estimated $100 million in charges, about 70% or $70 million are expected to be noncash charges. The total estimated charges include $12 million attributable to the shutdown of the Luke, MD, paper machine. Under merger accounting rules, charges for the writedown of assets and severance relating to the former Mead operations, including the paper machine shutdowns in Chillicothe, OH, are recorded in purchase accounting and do not affect current earnings. The restructuring will result in the elimination of about 350 positions in Ohio and approximately 75 positions in Maryland. It is expected that, over time, production will be transferred to more efficient machines elsewhere in the company's paper segment as market conditions improve. These actions will take effect beginning April 1, 2002, and it is anticipated that they will be completed by May 31, 2002.
The net loss from operations for the two months ended December 31, 2001 was $21.7 million, or $.21 per share, compared to earnings of $26.0 million, or $.26 per share for the same period last year. Results for the two
months ended December 31, 2001 reflect the effect of market-related downtime of about 70,000 tons, with an estimated negative impact on earnings of $15 million pretax, or $.09 per share, compared to only 31,000 tons, or about $8 million pretax, or $.05 per share, for the same period last year. Results for the period also include $.10 per share in higher costs and expenses for the writedowns of plant and equipment taken out of service, writedowns of inventories due to lower cost or market evaluations, increased costs associated with the acceleration of maintenance to coincide with market-related downtime and other items principally relating to employee benefits and receivables.
The company's export sales from the United States for the two months ended December 31, 2001 increased 3.2% to $91.5 million, compared to the same period last year, and accounted for approximately 15% of the company's consolidated sales. Total sales outside of the United States, including sales of the company's foreign operating subsidiaries, increased 22% from the same period last year and accounted for approximately 32% of consolidated sales. The increase was largely due to improved results from the company's European media packaging business and the acquisition of Alfred Wall AG, a European consumer packaging company, which was acquired in the third fiscal quarter of 2001.
Gross profit margin for the two months ended December 31, 2001 was 10% compared with 20% for the same period last year, as a result of lower prices for some of the company's paper and paperboard grades, higher repair and maintenance costs incurred during machine downtime and inventory writedowns. Depreciation and amortization increased by 8% for the two-month period, or $4.5 million, largely due to acquisitions in fiscal year 2001. For the two months ended December 31, 2001, operating results benefited from noncash pension credits of $22.9 million, compared to $22.5 million for the same period last year.
Unless otherwise indicated, all earnings per share information relates to basic and diluted; see Notes to Consolidated Financial Statements.
Packaging segment Two months ended ----------------- ---------------- December 31 ----------- (in millions) 2001 2000 ---- ---- Sales $393.3 $402.2 Operating profit [loss] [6.4] 40.8 |
Sales for the packaging segment decreased 2.2% for the two months ended December 31, 2001, compared to the same period last year due to weak business conditions and lower sales prices across the sector. Volume for the segment increased 9.6% during the two-month period as a result of acquisitions in fiscal year 2001, while average prices were 11.8% lower. The packaging segment experienced a loss of $6.4 million for the two months ended December 31, 2001, compared to operating profit of $40.8 million in the same period last year, due to the weaker economy as well as lower demand and prices for some bleached and unbleached paperboard, particularly heavy-weight paperboards and food service products. Higher energy and chemical costs and the acceleration of maintenance projects during machine downtime also contributed to lower operating profits. Responding to market conditions, the company took downtime at the Charleston, SC, Covington, VA, and Evadale, TX, mills of about 57,000 tons with an estimated negative impact on earnings of approximately $11 million pretax, or $.07 per share.
Additional downtime of approximately 30,000 tons was taken in January 2002 due to the temporary shutdown of four paper machines and other equipment at the Evadale mill to make necessary repairs and manufacturing improvements. The downtime is estimated to reduce first quarter profit for the segment by about $6 million pretax. In addition, MeadWestvaco plans to take a total of 58,000 tons of market-related downtime during the first calendar quarter of 2002, which is estimated to negatively impact segment quarterly profit by about $13 million pretax.
For the two months ended December 31, 2001, sales to the tobacco industry accounted for approximately 16% of packaging segment sales compared to approximately 18% last year. Of these sales to tobacco markets,
approximately 9% of the segment sales were exported or used to produce products for export while the remaining 7% was sold to the domestic tobacco industry for sale in the United States. The current legal, regulatory and legislative pressures on the tobacco industry may have an adverse effect on packaging segment profitability. While we would expect to compensate for such an adverse effect with growth in other consumer product markets, these alternatives may not, in the short run, fully offset any decline in profitability related to sales to the tobacco industry.
For 2002, the company believes that demand for packaging for high-value consumer products will continue to be relatively stable, although demand for consumer media products for which the company produces packaging, such as DVDs and computer games, is growing rapidly. If the economic weakness persists, commodity-based markets, specifically linerboard, will continue to be negatively impacted. The packaging segment will continue to focus on controllable items, including manufacturing efficiency programs and cost containment initiatives.
Paper segment Two months ended ------------- ---------------- (in millions) December 31 ----------- 2001 2000 ---- ---- Sales $157.3 $170.5 Operating profit [loss] [2.8] 14.5 |
Paper segment sales for the two months ended December 31, 2001 decreased 7.7% from the same period last year due to a decrease in average prices of 9.8%, offset by an increase in volume of 2.1%. The paper segment experienced a loss of $2.8 million for the two months ended December 31, 2001, compared to operating profit of $14.5 million for the same two-month period last year, principally due to a slower economy, the effect of a strong U.S. dollar and the resulting competitiveness of imports, weak pricing and market-related downtime of approximately 13,000 tons which negatively impacted segment profit by about $4 million pretax, or $.02 per share.
As stated earlier, MeadWestvaco announced on March 4, 2002 that three coated paper machines and associated equipment will be permanently closed at the Chillicothe, OH, mill and one coated paper machine at the Luke, MD, mill will be permanently shut down. Over time, production will be transferred to more efficient machines elsewhere in the company's paper segment as market conditions improve.
For 2002, management expects volume and pricing will continue to be under pressure if the U.S. economy remains weak and the U.S. dollar continues to be strong. In addition, in the first quarter MeadWestvaco plans to take about 37,000 tons of market-related downtime, which is expected to negatively impact segment quarterly profit by about $14 million pretax. MeadWestvaco intends to continue to focus on higher margin specialty and digital papers, to introduce other high-value products and to continue to implement cost reduction measures.
Chemicals segment Two months ended ----------------- ---------------- (in millions) December 31 ----------- 2001 2000 ---- ---- Sales $50.0 $56.2 Operating profit 4.4 9.2 |
Sales for the chemicals segment declined by 10.9% due to a decrease in average price of 12.5%, partially offset by an increase in volume of 1.6%. Sales declined due to slower economic activity and increased competition from products produced in the Far East. As a result of current weak economic conditions, the company took market-related downtime to manage production and overall inventory levels. Near term, the company does not anticipate the need for further downtime. Operating profit for the two months ended December 31, 2001 for the chemicals segment declined 52% from the same period last year to a level of $4.4 million due to weak market conditions and lower production.
Overall, the company expects stable earnings for the chemicals segment for 2002, but may be negatively affected to some degree by higher prices for crude tall oil, lower prices for printing ink resins and the loss of carbon business not related to the automotive industry of approximately 5% of the segment's annual sales.
Net income from operations in fiscal year 2001 was $88.2 million, or $.87 per share, compared to $245.9 million, or $2.44 per share, for fiscal year 2000. Earnings for fiscal year 2001 included a pretax restructuring charge of $56.9 million, or $.35 per share after tax, due to fixed asset writedowns, employee terminations and other exit costs, primarily due to the closings of the company's fine papers mill in Tyrone, PA, and consumer packaging plants in Richmond, VA, and Memphis, TN. Fiscal 2001 also included a $.10 per share benefit resulting from increased utilization of domestic research and foreign tax credits and the resolution of prior years tax issues and a gain of $5.2 million, or $.03 per share after tax, from the sale of a real estate lease in New York City. Earnings for fiscal year 2000 included a pretax restructuring charge of $27.2 million, or $.18 per share after tax, resulting primarily from a writedown of assets due to the anticipated decline in future sales of folding cartons to domestic tobacco markets, a pretax gain of $11.2 million, or $.07 per share after tax, from the sale of a liquid packaging plant previously written down as part of the restructuring charge in 1999, an after-tax extraordinary charge of $8.8 million, or $.09 per share, from the early retirement of higher interest rate debt and an after-tax gain of $3.6 million, or $.04 per share after tax, from the sale of an interest in a joint venture in China.
Due to the effects of the strong U.S. dollar, the company's export sales from the United States decreased 4.8% to $562.4 million, compared to fiscal year 2000, and accounted for approximately 14% of the company's consolidated sales due primarily to a decrease in price and a weaker product mix. Total sales to customers outside of the United States, including sales of the company's foreign operating subsidiaries, increased 22% from the prior year largely due to acquisitions, and accounted for approximately 25% of consolidated sales.
Gross profit margin for the year was 18% compared with 22% for the prior year as a result of lower prices for certain paper and paperboard grades, and higher energy and pulpwood costs. Earnings for the year also reflect the effect of market-related downtime of approximately 194,000 tons, or $44 million pretax, compared to only 12,000 tons, or $2 million pretax in the prior year. In addition, the current year's earnings reflect the impact of a LIFO (last in-first out) charge of $2.9 million, compared to a charge of $17.0 million in the prior year. Increasing energy costs negatively impacted manufacturing costs and reduced operating profits. Energy costs were 19% higher for the year compared with the prior year. In response to higher energy prices, the company
switched to alternative fuels where possible. Depreciation and amortization increased by 11% largely due to acquisitions in the current year, as well as in fiscal year 2000 where they were included for only a portion of the year. Fiscal year 2001 operating results also benefited from an increase in noncash pension credits of $26.9 million as a result of cumulative favorable investment returns on pension plan assets. The company anticipates that earnings in fiscal year 2002 will benefit from an increase in noncash pension credits of $2.6 million to approximately $138 million pretax.
Unless otherwise indicated, all earnings per share information relates to basic and diluted; see Notes to Consolidated Financial Statements.
Packaging segment ----------------- (in millions) Fiscal year ended October 31, --------------------------------- 2001 2000 1999 ---- ---- ---- Sales $2,503.2 $2,264.6 $1,542.3 Operating profit 196.1 351.2 190.5 |
Sales for the packaging segment increased 10.5% from fiscal year 2000 due to the acquisitions of AGI (formerly known as IMPAC), which was acquired in July 2000, and Alfred Wall AG, which was acquired in the third quarter of 2001. Volume for the segment increased 13.8% and price decreased by 3.3%. Operating profit for the packaging segment for fiscal year 2001 decreased by 44% to $196.1 million from the fiscal year 2000, due to the weaker economy and increased energy costs, as well as lower demand and prices for some bleached and unbleached paperboard. Responding to market conditions, the company took downtime at the Charleston, SC, Covington, VA, and Evadale, TX, mills of about 174,000 tons with an estimated negative impact on annual earnings of $37 million before taxes. An additional 17,000 tons of downtime was taken in August 2001 due to a manufacturing interruption at the Evadale mill, but the production rate was fully recovered by September.
During fiscal year 2001, approximately 15% of packaging segment sales were made to the tobacco industry for packaging tobacco products, compared to approximately 19% for fiscal year 2000. Of these tobacco sales, approximately 8% of segment sales were exported or used to produce products for export, with the remaining 7% sold to the domestic tobacco industry for sale in the United States. The current legal, regulatory and legislative pressures on the tobacco industry may have an adverse effect on packaging segment profitability. While we would expect to compensate for such an adverse effect with growth in other consumer product markets, these alternatives may not, in the short run, fully offset any decline in profitability related to sales to the tobacco industry.
Rigesa, Ltda., Westvaco's Brazilian subsidiary, benefited from good demand for most of its value-added products, particularly fruit packaging, although its operating profit and revenues declined compared to the fiscal year 2000 period, as a result of weaker local currency exchange rates.
Paper segment ------------- (in millions) Fiscal year ended October 31, ---------------------------------- 2001 2000 1999 ---- ---- ---- Sales $1,058.3 $1,225.8 $1,085.7 Operating profit 50.8 140.6 62.0 |
Paper segment sales for the fiscal year 2001 decreased 13.7% from the fiscal year 2000 due to decreases in volume of 10.5% and price of 3.2%. A strong U.S. dollar and the resulting competitiveness of imports affected pricing and volumes in coated papers, as did the lower level of economic activity. Paper segment operating profit decreased substantially to $50.8 million for the fiscal year 2001, compared to $140.6 million for fiscal year 2000, principally due to a slowing economy, as well as higher energy costs and market-related downtime of approximately 21,000 tons which negatively impacted segment profit by about $7 million pretax.
Chemicals segment ----------------- (in millions) Fiscal year ended October 31, ---------------------------------- 2001 2000 1999 ---- ---- ---- Sales $347.8 $358.0 $327.7 Operating profit 62.9 64.5 52.5 |
Sales for the chemicals segment declined by 2.9% in fiscal year 2001 due to a decrease in volume of 5.7%, partially offset by an increase in price of 2.8%. Sales of resins used in printing inks and other products increased while sales of fabric dye dispersants declined due to slower economic activity and increased competition from products produced in the Far East. Sales of carbon products for emission protection in the automotive markets were weaker due to a lower level of economic activity. The fiscal year 2001 operating profit for the chemicals segment declined 2.4% to a level of $62.9 million due to higher fuel prices.
Export sales from the United States in fiscal year 2000 increased 17% compared to fiscal year 1999 and accounted for 16% of the company's consolidated sales. Total sales outside of the United States, including sales of our foreign operating subsidiaries, accounted for approximately 22% of consolidated sales compared to 24% in the prior year. Gross profit margin for the year improved to 23% from 20% in the prior year, due primarily to savings resulting from our 1999 restructuring and other cost reduction initiatives, partially offset by the impact of a provision to reflect inventories at LIFO value. Fiscal year 2000 operating results also benefited from an increase in noncash pension credits of $26.0 million, as a result of cumulative favorable investment returns on pension plan assets.
acquisition of a bleached paperboard mill in Evadale, TX; segment volume increased 43.0% and price improvements increased revenues by 3.8%. The increase in shipment volume reflects the contributions by acquisitions including the Evadale, TX, mill, AGI and Mebane. Fourth quarter shipments were well ahead of 1999 fourth quarter levels, but demand softened in the fourth quarter relative to the second and third quarters of 2000. To balance demand and production, the company took downtime at the Covington, VA, and Evadale, TX, mills of about 12,000 tons or $2 million. Operating profit for the packaging segment for 2000 increased by 84.4% to $351.2 million due to acquisitions, product mix improvements, reduced costs and stronger business conditions. Revenues and profits for Rigesa, Ltda; showed strong improvement as a result of improved economic conditions in Brazil and product mix enhancements.
During fiscal year 2000, approximately 19% of packaging segment sales were made to the tobacco industry compared to about 26% for fiscal year 1999. About 13% of segment sales were for overseas tobacco markets with the remaining 6% for tobacco sales in the United States. Competitive conditions as well as the legal and regulatory pressures on the tobacco industry had an adverse effect on packaging segment profitability.
The above segment discussion does not take into account the restructuring charges for fiscal years 2000 and 1999 which are included in Corporate and other segment information.
At December 31, 2001, the ratio of current assets to current liabilities was 1.4 compared to 1.9 at December 31, 2000 and 1.4 and 1.9 at October 31, 2001 and 2000, respectively. Cash flows from operations totaled $34.1 million for the two months ended December 31, 2001, compared to $9.3 million for the same period in 2000 and $252.6 million, $583.1 million and $412.7 million in fiscal years ended 2001, 2000 and 1999, respectively.
Prior to the merger, Westvaco maintained a $500 million revolving credit agreement. Borrowings under the agreement could have been in unsecured domestic or Eurodollar notes and at rates approximating prime or the London Interbank Offered Rate (LIBOR) at the company's option. There was no borrowing under this arrangement during the current period, except for the support of commercial paper borrowings, which were $75.0 million and $264.6 million at December 31, 2001 and 2000, respectively, with a weighted average interest rate of 2.9% and 7.4%, respectively. The revolving credit agreement contained a financial covenant limiting the ratio of debt to capitalization to 0.55 to 1 and specified rates approximating prime or LIBOR at the company's option.
The ratio of debt to total capital for Westvaco was 46% at December 31, 2001 and 45% at December 31, 2000. In February 2001, Westvaco issued $300 million of 7.95% thirty-year notes to repay commercial paper, to fund working capital and other general requirements. At December 31, 2001, Westvaco had $166.6 million of notes payable and current maturities of long-term obligations, compared to $30.5 million at December 31, 2000. The weighted average interest rate for these borrowings was 8.6% for December 31, 2001.
In the third quarter of 2001, Westvaco entered into an interest rate swap with a notional principal amount of $100 million and a variable-rate of six-month LIBOR plus 1.115% with respect to $100 million of Sinking Fund Debentures with a fixed interest rate of 7.1%. The swap matures in November 2009. At October 31, 2001, the company had $200 million of unused debt registered with the Securities and Exchange Commission. During the two months ended December 31, 2001, the company declared a $.22 per share dividend payable January 2, 2002. During the two months ended December 2001, the company did not purchase any common stock under the repurchase program approved by the Board of Directors in 1997 and 145,498 shares were issued out of treasury stock to satisfy stock option exercises.
Following the merger, (i) debt issued by Westvaco has been unconditionally guaranteed, on a joint and several basis, by both MeadWestvaco and Mead, (ii) debt issued by Mead has been unconditionally guaranteed, on a joint and several basis, by both MeadWestvaco and Westvaco and (iii) future debt issued by MeadWestvaco will be guaranteed by either or both of Mead and/or Westvaco. In connection with its future financing and capital structure requirements, on March 8, 2002, MeadWestvaco filed a registration statement with the Securities and Exchange Commission on Form S-3, covering up to $1.0 billion in debt securities which the company may issue from time to time after the registration statement becomes effective, for general corporate purposes including repayment of short-term debt and maturing long-term debt and working capital.
Dividends declared during the transition period ended December 31, 2001 were $22.6 million and $89.3 million, $88.5 million and $88.2 million for the years ended October 31, 2001, 2000 and 1999, respectively. MeadWestvaco had announced an annual dividend rate of $.92 per share.
A portion of anticipated future environmental capital expenditures of MeadWestvaco will concern compliance with regulations promulgated under the Clean Air Act and Clean Water Act (the "Cluster Rules") designed to reduce air and water discharges of specific substances from U.S. pulp and paper mills by 2006. MeadWestvaco has taken major steps to comply with the Cluster Rules. MeadWestvaco expects to incur capital expenditures beyond the expenditures stated above of approximately $85 million over the next five years to comply with the Cluster Rules. Additional operating expenses will be incurred as capital installations required by the Cluster Rules are put into service. Environmental organizations are challenging the Cluster Rules in the U.S. Court of Appeals. MeadWestvaco and other companies are participating in the litigation which could result in additional compliance costs in excess of $150 million over several years if the legal challenge by these environmental organizations is successful.
The U.S. Environmental Protection Agency (the "EPA") has undertaken several initiatives to reduce ozone-causing pollutants from large utility and industrial sources in the Midwest, including a call for states to adopt more stringent emission controls on all or some of the sources within their boundaries (the "NOx SIP Call") and the promulgation of new federal emission standards that may be applied to specific identified sources in the affected states. Alabama, Michigan and Ohio are among the states affected by these EPA initiatives. MeadWestvaco has developed plans for compliance with the applicable federal programs and the Alabama, Michigan and Ohio programs, and does not expect any significant capital expenditures beyond the expenditures stated above for the Mead facilities will be necessary in the next three years. MeadWestvaco also expects capital expenditures in the range of $15-20 million will be required to install additional controls at MeadWestvaco facilities located in Kentucky, Maryland and Virginia by 2004. Estimated expenditures assume
the technology identified by the EPA is capable of achieving the NOx reductions projected by the EPA, which MeadWestvaco has not independently confirmed.
Mead and Westvaco have been notified by the EPA or by various state or local governments that they may be liable under federal environmental laws or under applicable state or local laws with respect to the cleanup of hazardous substances at sites currently operated or used by each company. Mead and Westvaco are also currently named as potentially responsible parties ("PRP"), or have received third party requests for contribution under federal, state or local laws with respect to numerous sites. There are other sites which may contain contamination or which may be potential Superfund sites but for which MeadWestvaco has not received any notice or claim. The potential liability for all these sites will depend upon several factors, including the extent of contamination, the method of remediation, insurance coverage and contribution by other PRPs. Although the costs associated with remediation of all these sites are not certain at this time, MeadWestvaco has established reserves of approximately $57 million relating to current environmental litigation and proceedings which it believes are probable and reasonably estimable. These reserves were established after considering the number of other PRPs, their ability to pay their portion of the costs, Mead's or Westvaco's relative contribution to the site, and other factors. Expenses to be charged to this reserve are not included in the anticipated capital expenditures previously stated. MeadWestvaco believes that it is reasonably possible that costs associated with these sites may exceed current reserves by amounts that may prove insignificant or by as much as approximately $40 million. This estimate of the range of reasonably possible additional costs is less certain than the estimate upon which reserves are based. Payments made relating to these sites were not material to liquidity during the year and are not expected to be material for 2002.
MeadWestvaco is involved in other various legal proceedings and environmental actions, generally arising in the normal course of business. Although the ultimate outcome of such matters cannot be predicted with certainty, management does not believe that the currently expected outcome of any proceeding, lawsuit or claim that is pending or threatened, or all of them combined, will have a material adverse effect on its consolidated financial position, liquidity or results of operations.
Acquisitions
During the third quarter of fiscal year 2001, Westvaco completed, in a series of transactions, its previously disclosed acquisition of a 90% interest in Alfred Wall AG (Wall) and related assets. Wall is a leading European supplier of a wide range of consumer packaging based in Graz, Austria. The company used existing cash of $45 million and approximately 1.5 million shares of the company's common stock, with an assured value of $35 per share, to fund the purchase price of $98.7 million, net of debt assumed of $50.6 million. The acquisition was accounted for using the purchase method of accounting. The assets acquired and liabilities assumed were recorded using preliminary estimated fair values as determined by the company based on information currently available and on current assumptions as to future operations. The purchase price allocation for this acquisition is preliminary and further refinements are likely to be made upon completion of final valuation studies. Related goodwill of approximately $47 million, which represents the excess of purchase price over fair value of net tangible and intangible assets acquired, has been amortized under existing accounting standards on a straight-line basis over 40 years. See the section Recently Issued Accounting Standards below for further information regarding goodwill and other intangible assets.
Also in fiscal year 2001, Westvaco completed the acquisitions of Lakewood Industries, Inc. (known as Poly-Matrix) and TM Limited through its AGI Media Packaging subsidiary. Poly-Matrix has manufacturing operations in Pittsfield, MA, and is North America's largest producer of specialty plastic components for DVD, CD and other entertainment packaging. TM Limited is one of Europe's leading suppliers of specialty packaging design, prepress and print services to the movie industry. The company used existing cash to fund the combined purchase prices of $41.1 million, net of debt assumed of $14.6 million. Goodwill associated with the Poly-Matrix purchase will not be amortized per issued Statement of Financial Accounting Standards No. 142.
During 2001, the company refined the preliminary allocation of the purchase price of Mebane Packaging Group, acquired in fiscal year 2000. The result was an increase in identifiable intangible assets of $15.9 million and fixed assets of $20.5 million and credits to goodwill of $22.3 million and to deferred taxes of $14.1 million.
During the fourth quarter of 2001, the company refined the preliminary allocation of the purchase price of AGI. The result was an increase in identifiable intangible assets of $75.1 million and fixed assets of $24.2 million and a credit to goodwill of $61.3 million and to deferred taxes of $38.0 million.
Special Items Including Restructuring and Business Improvement Actions
MeadWestvaco expects restructuring and other merger-related costs charged to earnings in 2002 to approximate $100 million, all of which relates to the former Westvaco operations, of which about $40 million is expected to be taken in the first quarter. Of the total estimated $100 million in charges, about 70% or $70 million are expected to be noncash charges.
During fiscal year 2001, the company recorded total pretax restructuring charges of $56.9 million, including $5.2 million of inventory writedowns included within Cost of products sold.
The following table and discussion presents additional detail to the charges.
In millions Asset Employee Other Sub- Inventory ----------- writedowns costs costs Adjustments total writedowns Total ---------- --------- ----- ----------- ----- ---------- ----- Packaging $21.4 $3.2 $0.8 $[0.5] $24.9 $1.6 $26.5 Paper 15.5 5.7 4.6 [0.2] 25.6 3.6 29.2 Chemicals 1.2 - - - 1.2 - 1.2 ----- ---- ---- ------ ----- ---- ----- $38.1 $8.9 $5.4 $[0.7] $51.7 $5.2 $56.9 ===== ==== ==== ====== ===== ==== ===== Balance of related accruals remaining at December 31, 2001 $3.8 $1.8 $5.6 $5.6 ==== ==== ==== ==== |
During the fourth quarter of fiscal year 2001, Westvaco recorded a pretax restructuring charge of $53.7 million which consisted of $37.1 million of fixed asset writedowns, $6.7 million of employee termination costs and $5.0 million of other exit costs, primarily lease termination costs. Included in the restructuring charge are related inventory writedowns of $4.9 million, which have been included within Cost of products sold. Restructuring actions taken in the fourth quarter are expected to result in annual pretax savings of about $50 million, which are expected to be attained by the end of fiscal 2002.
Packaging segment: The realignment of the consumer packaging operations included the closing of the packaging plants in Richmond, VA, and Memphis, TN, and further streamlining of its remaining Richmond packaging operations by relocating equipment to other company facilities. The packaging charge also included the writedown of assets at the company's Covington, VA, mill as part of a plan to focus the mill's production at targeted markets. Charges associated with these shutdowns included $21.4 million to write down the assets, using an assets-to-be-held-and-used model. Severance costs of $3.2 million relating to the termination of approximately 320 employees and other exit costs of $0.8 million were recorded. In addition, the company recognized related inventory writedowns of $1.6 million, which have been included within Cost of products sold. At December 31, 2001, all of the plants' employees had been terminated.
Paper segment: The paper mill in Tyrone, PA, was shut down in October 2001 due to the competitive pressures caused by the economic slowdown, the strong U.S. dollar and the related increase in imported paper. Charges
associated with the shutdown included $14.5 million to write down the assets, using an assets-to-be-disposed-of model, $3.5 million of severance costs covering approximately 260 employees and other exit costs of $4.2 million which primarily relate to lease termination costs. In addition, the company recognized related inventory writedowns of $3.3 million, which have been included within Cost of products sold. At December 31, 2001, all of the mill's employees had been terminated. During the third quarter of fiscal year 2001, the company recorded a restructuring charge of $1.6 million, due primarily to a salaried workforce reduction of 20 employees at the company's Envelope Division headquarters in Springfield, MA. During the second quarter of fiscal year 2001, the company recorded a restructuring charge of $2.3 million which consisted of $1.0 million of fixed asset writedowns, $0.6 million of employee termination costs and $0.4 million of other exit costs. Included in the restructuring charge are related inventory writedowns of $0.3 million, which have been included within Cost of products sold. These actions were due to the curtailment of production on two of the three product lines at the company's Envelope Division flexible packaging operation.
Chemicals segment: The charge of $1.2 million related to the writedown of assets at the company's Covington, VA, carbon plant related to a program of concentrating production on high-growth markets.
Also included in the Restructuring charges line is a credit of $0.7 million for the reversal of reserves no longer required associated with the restructuring charge taken in the fiscal year 1999.
During the third quarter of fiscal year 2000, due to the anticipated decline in future sales of folding cartons to U.S. tobacco markets, the company reviewed certain long-lived assets in its consumer packaging business for impairment. As a result of the review, production facilities were written down to their fair value using an assets-held-for-use model and a pretax impairment charge of $24.3 million, including $3.3 million of associated goodwill, was recorded in the third quarter of fiscal year 2000. The impairment was recorded because undiscounted cash flows were less than the carrying value of the assets prior to the impairment charge. During the fourth quarter of fiscal year 2000, the company recorded an additional pretax charge of $2.9 million relating to the earlier charge and related employee termination costs. During the second quarter of fiscal 2000, the liquid packaging plant was sold, resulting in a pretax gain of $11.2 million, which was included in the Restructuring charges line in the Consolidated Statements of Income. As noted below, the liquid packaging plant had been written down in fiscal year 1999 in connection with the restructuring charge recorded in the fiscal 1999 fourth quarter. The gain resulted from a change in facts and circumstances in fiscal year 2000 from that existing during the fourth quarter of fiscal year 1999.
During the fourth quarter of fiscal year 1999, following completion of its strategic review process, the company adopted a plan to improve the company's performance, principally to enhance the strength and focus of its packaging-related businesses. Additionally, the company reviewed certain long-lived assets in its business for impairment. As a result of these initiatives, a pretax charge of $80.5 million was recorded in the fourth quarter of fiscal year 1999. Included in this charge were certain assets of the company's liquid packaging plant that were written down to reflect the plant's planned shutdown. This charge was primarily due to the writedown of impaired long-lived assets, involuntary employee termination and other exit costs. Production facilities were written down to their fair value using an asset-held-for-use model. An impairment of $67.4 million was recorded as undiscounted cash flows were less than the carrying value of the assets prior to the impairment. Further, the company wrote off a paper machine and certain equipment with a total carrying value of $8.6 million and abandoned the assets. During the fourth quarter of fiscal year 1999, in addition to the asset impairments described above, the company also recognized inventory writedowns of $1.7 million, which have been included within the Cost of products sold, employee termination costs of $1.5 million and other exit costs of $1.2 million. At October 31, 2001, reserves for the fiscal years 1999 and 2000 activities were fully utilized.
The company recognizes revenues at the point the risk of ownership passes. Export sales revenue is recognized at the point title passes, generally at the destination port.
Environmental expenditures that increase useful lives are capitalized, while other environmental expenditures are expensed. Liabilities are recorded when remedial efforts are probable and the costs can be reasonably estimated. The estimated closure costs for existing landfills based on current environmental requirements and technologies are accrued over the expected useful lives of the landfills.
The company provides retirement benefits for substantially all domestic employees under several noncontributory trusteed plans and also provides benefits to employees whose retirement benefits exceed maximum amounts permitted by current tax law under an unfunded benefit plan. Benefits are based on a final average pay formula for the salaried plans and a unit benefit formula for the hourly paid plans. Prior service costs are amortized on a straight-line basis over the average remaining service period for active employees. Contributions are made to the funded plans in accordance with ERISA requirements. The net pension credit reflects cumulative favorable investment returns on plan assets. The funded status of the plans and amounts recognized in the Consolidated Balance Sheets at December 31 and October 31 are based on valuation dates of September 30 and July 31 prepared by independent third-party actuaries.
The company periodically evaluates whether current events or circumstances indicate that the carrying value of its long-lived assets to be held and used may not be recoverable. An estimate of undiscounted future cash flows produced by the asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable value.
For a more complete listing of the company's significant accounting policies, see the Notes to the Consolidated Financial Statements.
In August 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which establishes one accounting model to be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. SFAS 144 supercedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets to Be Disposed Of, and the accounting and reporting provisions of Accounting Principles Board (APB) Opinion No. 30. SFAS 144 is effective for fiscal years beginning after December 15, 2001. The company does not anticipate any immediate financial statement impact with the adoption of this statement.
In June 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 141 supersedes APB Opinion No. 16, Business Combinations. The provisions of SFAS 141 (1) require that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, (2) provide specific criteria for the initial recognition and measurement of intangible assets apart from goodwill and (3) require that unamortized negative goodwill be written off immediately as an extraordinary gain instead of being deferred and amortized. The Poly-Matrix acquisition has been accounted for under SFAS 141. SFAS 141 also requires that upon adoption of SFAS 142 the company reclassify the carrying amounts of certain intangible assets into or out of goodwill, based on certain criteria. SFAS 142 supersedes APB Opinion No. 17, Intangible Assets, and is effective for fiscal years beginning after December 15, 2001. SFAS 142 primarily addresses the accounting for goodwill and intangible assets subsequent to their initial recognition. The provisions of SFAS 142 (1) prohibit the amortization of goodwill and indefinite-lived intangible assets, (2)
require that goodwill and indefinite-lived intangibles assets be tested annually for impairment (and in interim periods if certain events occur indicating that the carrying value of goodwill and/or indefinite-lived intangible assets may be impaired), (3) require that reporting units be identified for the purpose of assessing potential future impairments of goodwill, and (4) remove the 40 year limitation on the amortization period of intangible assets that have finite lives.
The company will adopt the provisions of SFAS 142 in its first quarter of 2002. The company is in the process of preparing for its adoption of SFAS 142 and is making the determinations as to what its reporting units are and what amounts of goodwill, intangible assets, other assets and liabilities should be allocated to those reporting units. The company expects that it will no longer record approximately $14 million of amortization relating to its existing goodwill and indefinite-lived intangibles, as adjusted for the reclassifications just mentioned.
SFAS 142 requires that goodwill and indefinite lived intangible assets be tested annually for impairment using a two-step process. The first step is to identify a potential impairment and, in transition, this step must be measured as of the beginning of the fiscal year. However, a company has six months from the date of adoption to complete the first step. The company expects to complete that first step of the goodwill and indefinite lived intangible assets impairment test during the first quarter of 2002. The second step of the goodwill and indefinite lived intangible assets impairment test measures the amount of the impairment loss (measured as of the beginning of the year of adoption), if any, and must be completed by the end of the company's fiscal year. Any impairment loss resulting from the transitional impairment tests will be reflected as the cumulative effect of a change in accounting principle as of the beginning of 2002. Based upon the goodwill assessment work to date, the company estimates that a noncash goodwill impairment charge in the range of $250-$350 million will be recorded in 2002 as the effect of adopting the new accounting standard. Any resulting goodwill impairment will be the same before and after taxes as the related goodwill is not deductible for tax purposes.
Forward-looking statements
Certain statements in this document and elsewhere by management of the company that are neither reported financial results nor other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, the business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of each company, or industry results, to differ materially from those expressed or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to, events or circumstances which affect the ability of Mead and Westvaco to integrate successfully and achieve the anticipated benefits of the transaction; competitive pricing for each company's products; changes in raw materials; energy and other costs; fluctuations in demand and changes in production capacities; changes to economic growth in the United States and international economies; government policies and regulations, including, but not limited to those affecting the environment and the tobacco industry; and currency movements. MeadWestvaco undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Investors are advised, however, to consult any further disclosures made on related subjects in the company's reports filed with the SEC.
Investor services plan
At December 31, 2001, approximately 15,300 shareholders, including members of the company's savings and investment plans for salaried and hourly employees, representing 16,828,152 shares of Westvaco
common stock, were participants in the company's Investor Services Plan.
Number of shareholders
At December 31, 2001, the number of individuals and institutions owning Westvaco common shares was about 18,920. This number includes 12,629 members of the company's salaried and hourly savings and investment plans. The plans, established in 1968 and 1995, respectively, hold 15,780,757 shares of Westvaco common stock for the accounts of participants. This represents 15% of the 102,554,826 shares of common stock outstanding at December 31, 2001.
Payroll and benefit costs
The total cost of payroll and benefits was $147 million for the transition period ended December 31, 2001, compared with $857 million and $742 million for the fiscal years ended 2001 and 2000, respectively. This includes $11.3 million in Social Security taxes in the transition period ended December 31, 2001, and $65.6 million and $52.5 million for the fiscal years ended 2001 and 2000, respectively. Payroll and benefit costs were 24% of sales in the transition period ended December 31, 2001 and 22% and 20% for the fiscal years ended 2001 and 2000, respectively.
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
In millions, except per share Transition period ended December 31, Fiscal year ended October 31, ------------------ ---------------------------------------- 2001 2001 2000 1999 Sales $602.7 $3,935.5 $3,856.5 $2,953.2 Other income [expense], net [2.3] 48.1 57.0 29.4 ----- ------- ------- ------- 600.4 3,983.6 3,913.5 2,982.6 ----- ------- ------- ------- Cost of products sold [excludes depreciation shown separately below] 482.2 2,893.9 2,706.0 2,120.9 Selling, research and administrative expenses 63.2 364.4 281.7 230.9 Depreciation and amortization 60.7 347.4 313.9 280.5 Restructuring charges - 51.7 16.1 78.8 Interest expense 32.9 207.7 192.2 123.5 ----- ------- ------- ------- 639.0 3,865.1 3,509.9 2,834.6 ----- ------- ------- ------- Income [loss] before taxes and extraordinary charge [38.6] 118.5 403.6 148.0 Income taxes [16.9] 30.3 148.9 36.8 ----- ------- ------- ------- Income [loss] before extraordinary charge [21.7] 88.2 254.7 111.2 Extraordinary charge - extinguishment of debt, net of taxes of $5.5 - - [8.8] - ----- ------- ------- ------- Net income [loss] $ [21.7] $ 88.2 $ 245.9 $ 111.2 ===== ======= ======= ======= Net income [loss] per share - basic and diluted Income [loss] before extraordinary charge $ [.21] $ .87 $ 2.53 $ 1.11 Extraordinary charge - - [.09] - ----- ------- ------- ------- Net income [loss] $ [.21] $ .87 $ 2.44 $ 1.11 ===== ======= ======= ======= Shares used to compute net income [loss] per share Basic 102.5 101.5 100.6 100.2 Diluted 102.6 101.6 100.9 100.5 |
The accompanying notes are an integral part of these financial statements.
MEADWESTVACO CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS
Consolidated balance sheets
In millions
At December 31, At October 31, -------------- --------------------- 2001 2001 2000 ASSETS Cash and marketable securities $ 102.4 $ 81.2 $ 225.3 Receivables 395.6 414.7 421.7 Inventories 434.6 426.4 333.3 Prepaid expenses and other current assets 101.0 93.4 83.4 ------- ------- ------- Current assets 1,033.6 1,015.7 1,063.7 Plant and timberlands: Machinery 5,908.0 5,875.1 5,673.4 Buildings 848.3 843.0 794.1 Other property, including plant land 265.0 261.2 248.8 ------- ------- ------- 7,021.3 6,979.3 6,716.3 Less: accumulated depreciation 3,223.9 3,170.6 2,916.4 ------- ------- ------- 3,797.4 3,808.7 3,799.9 Timberlands-net 264.2 263.7 268.7 Construction in progress 174.3 154.9 128.0 ------- ------- ------- 4,235.9 4,227.3 4,196.6 Prepaid pension asset 800.1 779.4 641.7 Goodwill 560.9 565.2 606.2 Other assets 197.8 199.4 61.7 ------- ------- ------- $6,828.3 $6,787.0 $6,569.9 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $ 543.9 $ 511.6 $ 523.2 Notes payable and current maturities of long-term obligations 166.6 172.9 30.1 Income taxes 15.3 16.5 13.6 ------- ------- ------- Current liabilities 725.8 701.0 566.9 Long-term debt 2,697.2 2,660.5 2,686.7 Other long-term obligations 83.0 76.8 76.0 Deferred income taxes 1,007.1 1,007.8 907.7 Shareholders' equity: Common stock, $5 par, at stated value Shares authorized: 300,000,000 Shares issued: 103,170,667 [2001 and 2000-103,170,667] 815.7 815.4 767.5 Retained income 1,687.5 1,731.8 1,761.8 Accumulated other comprehensive income [loss] [171.7] [186.8] [135.7] Common stock in treasury, at cost Shares held: 615,841 [2001-751,979; 2000-2,508,258] [16.3] [19.5] [61.0] ------- ------- ------- 2,315.2 2,340.9 2,332.6 -------- -------- -------- $6,828.3 $6,787.0 $6,569.9 ======== ======== ======== |
The accompanying notes are an integral part of these financial statements.
MEADWESTVACO CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS
Consolidated Statements of Shareholders' Equity In millions
Outstanding Common Common Retained Accumulated Total shares stock stock in income other shareholders' treasury comprehensive equity income [loss] Balance at October 31, 1998 100.3 $764.6 $[74.9] $1,588.9 $ [32.2] $2,246.4 Comprehensive income Net income - - - 111.2 - 111.2 Foreign currency translation - - - - [97.8] [97.8] Comprehensive income 13.4 Cash dividends - - - [88.2] - [88.2] Repurchases of common stock [0.5] - [11.9] - - [11.9] Issuances of common stock 0.5 1.2 14.8 [4.4] - 11.6 ----- ------ ------ -------- --------- -------- Balance at October 31, 1999 100.3 765.8 [72.0] 1,607.5 [130.0] 2,171.3 Comprehensive income Net income - - - 245.9 - 245.9 Foreign currency translation - - - - [5.7] [5.7] Comprehensive income 240.2 Cash dividends - - - [88.5] - [88.5] Repurchases of common stock [0.1] - [4.5] - - [4.5] Issuances of common stock 0.5 1.7 15.5 [3.1] - 14.1 ----- ------ ------ -------- --------- -------- Balance at October 31, 2000 100.7 767.5 [61.0] 1,761.8 [135.7] 2,332.6 Comprehensive income Net income - - - 88.2 - 88.2 Foreign currency translation - - - - [47.9] [47.9] Minimum pension liability net of taxes of $1.9 - - - - [3.2] [3.2] Comprehensive income 37.1 Cash dividends - - - [89.3] - [89.3] Repurchases of common stock [0.1] - [2.1] - - [2.1] Issuances of common stock 1.8 47.9 43.6 [28.9] - 62.6 ----- ------ ------ -------- --------- -------- Balance at October 31, 2001 102.4 815.4 [19.5] 1,731.8 [186.8] 2,340.9 Comprehensive [loss] Net loss - - [21.7] - [21.7] Foreign currency translation - - - 14.8 14.8 Minimum pension liability net of taxes of $0.1 - - - - 0.3 0.3 Comprehensive [loss] [6.6] Cash dividends - - - [22.6] - [22.6] Repurchases of common stock - - [0.3] - - [0.3] Issuances of common stock 0.2 0.3 3.5 - 3.8 ----- ------ ------ -------- --------- -------- Balance at December 31, 2001 102.6 $815.7 $[16.3] $1,687.5 $[171.7] $2,315.2 ===== ===== ===== ======= ====== ======= |
The accompanying notes are an integral part of these financial statements.
MEADWESTVACO CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions
Transition period ended December 31, Fiscal year ended October 31, ------------------ ----------------------------- 2001 2001 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES ------------------------------------------------------------------------------------------------------------------------------- Net income [loss] $ [21.7] $ 88.2 $ 245.9 $ 111.2 Adjustments to reconcile net income to net cash provided by operating activities: Provision for depreciation and amortization 60.7 347.4 313.9 280.5 Provision for deferred income taxes [4.8] 43.6 94.9 32.3 Restructuring charges - 51.7 16.1 78.8 Pension credit and other employee benefits [15.0] [131.2] [92.9] [78.7] Loss [gain] on sales of plant and timberlands 3.5 [37.7] [26.8] [17.9] Foreign currency transaction loss [gain] [0.4] 1.2 0.9 3.6 Loss on extinguishment of debt, net of taxes - - 8.8 - Net changes in assets and liabilities 13.1 [108.4] 25.3 [2.6] Other, net [1.3] [2.2] [3.0] 5.5 ------ ------ ------- ------- Net cash provided by operating activities 34.1 252.6 583.1 412.7 CASH FLOWS FROM INVESTING ACTIVITIES ------------------------------------------------------------------------------------------------------------------------------- Additions to plant and timberlands [54.1] [290.4] [214.0] [228.9] Payments for acquisitions, net of cash acquired - [81.2] [1,342.8] [22.7] Proceeds from sales of assets 0.6 48.2 81.6 22.8 Other, net [0.2] [0.2] 0.2 [1.1] ------ ------ ------- ------- Net cash used in investing activities [53.7] [323.6] [1,475.0] [229.9] CASH FLOWS FROM FINANCING ACTIVITIES ------------------------------------------------------------------------------------------------------------------------------- Proceeds from issuance of common stock 3.3 6.3 9.3 9.1 Proceeds from issuance of debt 79.9 1,125.3 2,611.5 881.5 Dividends paid - [89.3] [88.5] [88.2] Treasury stock purchases - [1.6] [2.4] [10.8] Repayment of notes payable and long-term debt [42.4] [1,103.6] [1,523.7] [952.2] ------ ------ ------- ------- Net cash provided by [used in] financing activities 40.8 [62.9] 1,006.2 [160.6] Effect of exchange rate changes on cash - [10.2] 2.2 [18.5] ------ ------ ------- ------- Increase [decrease] in cash and marketable securities 21.2 [144.1] 116.5 3.7 Cash and marketable securities: At beginning of period 81.2 225.3 108.8 105.1 ------ ------ ------- ------- At end of period $102.4 $ 81.2 $ 225.3 $ 108.8 ====== ====== ======= ======= |
The accompanying notes are an integral part of these financial statements.
MEADWESTVACO CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
Summary of significant accounting policies
Basis of consolidation and preparation of financial statements: The Consolidated
Financial Statements include the accounts of MeadWestvaco Corporation (see Note
A) and all subsidiaries more than 50% owned. Investments in 20% to 50% owned
companies are generally accounted for using the equity method. Accordingly, the
company's share of the earnings of these companies is included in consolidated
net income. In accordance with generally accepted accounting principles, the
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of some assets and liabilities and,
in some instances, the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Reclassification: Certain prior years' amounts have been reclassified to conform with the current presentation.
Translation of foreign currencies: Generally, the local currency is the functional currency for the company's operations outside the United States. The assets and liabilities of the company's foreign subsidiaries are translated into U.S. dollars using period-end exchange rates and adjustments resulting from these financial statement translations are included in Accumulated other comprehensive income [loss] in the Consolidated Balance Sheets. Revenues and expenses are translated at average rates prevailing during the period.
Marketable securities: For financial statement purposes, highly liquid securities purchased three months or less from maturity are considered to be cash equivalents.
Inventories: Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method for substantially all raw materials, finished goods and production materials of U.S. manufacturing operations. Cost of all other inventories, including stores and supplies inventories and inventories of non-U.S. manufacturing operations, is determined by the first-in, first-out (FIFO) or average cost method.
Plant and timberlands: Owned assets are recorded at cost. Also included in the cost of these assets is interest on funds borrowed during the construction period. When assets are sold, retired or disposed of, their cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in Other income [expense]. Costs of renewals and betterments of properties are capitalized; costs of maintenance and repairs are charged to income. Costs of reforestation of timberlands are capitalized.
Depreciation, amortization and impairment of long-lived assets: The cost of plant and equipment is depreciated, generally by the straight-line method, over the estimated useful lives of the respective assets, which range from 20 to 40 years for buildings and 5 to 30 years for machinery and equipment. The cost of standing timber is amortized as timber is cut, at rates determined annually based on the relationship of unamortized timber costs to the estimated volume of recoverable timber. The company periodically evaluates whether current events or circumstances indicate that the carrying value of its long-lived assets, including intangible assets to be held and used may not be recoverable. An estimate of undiscounted future cash flows produced by the asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable value.
Environmental: Environmental expenditures that increase useful lives are capitalized, while other environmental expenditures are expensed. Liabilities are recorded when remedial efforts are probable and the costs can be reasonably estimated. The estimated closure costs for existing landfills based on current environmental requirements and technologies are accrued over the expected useful lives of the landfills.
Goodwill and other intangible assets: Goodwill represents the excess of the cost over the fair value of net assets of purchased businesses and is being amortized through December 31, 2001 on a straight-line basis over periods not exceeding 40 years for goodwill arising prior to June 30, 2001. The company continually evaluates the
NOTES TO FINANCIAL STATEMENTS
carrying value of goodwill and other intangible assets as described above. Amortization expense charged to operations for the two-month transition period ended December 31, 2001 was $4.1 million. Amortization expense charged to operations for the year ended October 31, 2001 was $17.4 million (2000-$7.2 million, 1999-$30,000). See Note B for additional information.
Financial instruments: The company has, where appropriate, estimated the fair value of financial instruments. These fair value amounts may be significantly affected by the assumptions used, including the discount rate and estimates of cash flow. Accordingly, the estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. Where these estimates approximate carrying value, no separate disclosure of fair value is shown.
Derivatives: The company utilizes well-defined financial contracts in the normal course of its operations as means to manage its interest rate and commodity price risks. For those limited number of contracts that are considered derivative instruments, the company has formally designated each as a hedge of specific and well-defined risks. See Note N for further information.
Revenue recognition: The company recognizes revenues at the point the risk of ownership passes. Export sales revenue is recognized at the point title passes, generally at the destination port.
Income taxes: Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the enacted tax rates in effect for the years the differences are expected to reverse.
Income per share: Basic net income per share for all the periods presented has been calculated using the weighted average shares outstanding. In computing diluted net income per share, incremental shares issuable upon the assumed exercise of stock options have been added to the weighted average shares outstanding. For the two month transition period ended December 31, 2001, stock options of 5.8 million shares were not included because their effect was antidilutive. For the fiscal year ended October 31, 2001, stock options of 5.3 million shares were not included because their effect was antidilutive (2000-3.9 million options, 1999-1.9 million options).
NOTES TO FINANCIAL STATEMENTS
A. MeadWestvaco merger
On August 29, 2001, Westvaco and Mead announced that they agreed to a merger of equals creating a global company with leading positions in packaging, coated and specialty papers, consumer and office products, and specialty chemicals. The transaction has been approved by the Boards of Directors of both companies and was approved by the shareholders at special meetings held by both companies on January 28, 2002. The new company, MeadWestvaco Corporation, has approximately $8 billion in annual revenues, strong platforms in the company's four core businesses and a strong balance sheet with substantial financial capacity. Under the terms of the transaction, Mead shareholders received one share of MeadWestvaco stock for each share of Mead stock held, and Westvaco shareholders received 0.97 shares of MeadWestvaco stock for each share of Westvaco stock held. Mead shareholders also received a cash payment of $1.20 per share. The merger was structured as a stock-for-stock exchange and will be accounted for in 2002 as a purchase transaction under the recent guidelines for business combinations. Westvaco and Mead determined that the relative outstanding share ownership and the designation of certain senior management positions requires Westvaco to be the acquiring entity for accounting purposes with the historical financial statements of Westvaco becoming the consolidated financial statements of MeadWestvaco. The total acquisition cost of Mead is estimated at approximately $3.2 billion.
MeadWestvaco Corporation Selected Unaudited Pro Forma Combined Financial Data
The following table summarizes, under the purchase method of accounting, selected unaudited pro forma combined statement of operations data for the fiscal years ended October 31, 2001 and 2000 as if the business combination between Westvaco and Mead had been completed at the beginning of the periods presented. This selected unaudited pro forma combined financial data is included only for the purposes of illustration, and it does not necessarily indicate what the operating results would have been if the business combination between Westvaco and Mead had been completed on such date. Moreover, this information does not necessarily indicate what the future operating results of the combined company will be. The unaudited pro forma combined condensed statements of operations data reflect the full years ended October 31, 2001 and 2000 for Westvaco and the full years ended December 31, 2001 and 2000 for Mead. The unaudited pro forma combined condensed balance sheet data reflects the December 31, 2001 balance sheet of Westvaco and records, on a preliminary basis, the acquisition of Mead assuming the transaction had been completed at December 31, 2001. The Mead balance sheet at December 31, 2001 was used for purposes of estimating the preliminary purchase asset allocation. The allocation reflected in the unaudited pro forma information is preliminary and subject to adjustment as final valuations of tangible and intangible assets acquired and liabilities assumed are completed.
Pro forma in millions, except per share [unaudited] 2001 2000 -------- -------- Net sales $8,112.0 $8,224.6 Net income 37.8 376.1 Net income per common share from continuing operations -- assuming dilution $0.19 $1.88 Balance sheet data: Total assets $13,599.8 Working capital 437.8 Long-term debt 4,004.5 Shareholders' equity 5,387.4 |
Management expects the accounting for the acquisition to result in the recording of approximately $350 million of goodwill. Pro forma adjustments include recording Mead's tangible and intangible assets and liabilities at their fair market value, including related deferred income taxes. Identifiable intangible assets include product
NOTES TO FINANCIAL STATEMENTS
trademarks, tradenames and customer relationships. The adjustments also include additional borrowings associated with the $1.20 per share payment to existing Mead stockholders and transaction and merger-related costs.
MeadWestvaco expects restructuring and other merger-related costs charged to earnings in 2002 to approximate $100 million, all of which relates to the former Westvaco operations, of which about $40 million is expected to be taken in the first quarter. Of the total estimated $100 million in charges about 70% or $70 million are expected to be noncash charges.
The company's historical Consolidated Financial Statements presented herein do not reflect any accounting for the merger.
B. Acquisitions
During the third quarter of fiscal year 2001, Westvaco completed, in a series of transactions, its acquisition of a 90% interest in Alfred Wall AG (Wall) and related assets. Wall is one of Europe's leading suppliers of packaging for a wide range of consumer products. Westvaco used existing cash of $45 million and approximately 1.5 million shares of Westvaco's common stock, with an assured value of $35 per share, to fund the purchase price of $98.7 million, net of debt assumed of $50.6 million.
Also in fiscal year 2001, Westvaco completed the acquisitions of Poly-Matrix and TM Limited by its AGI Media Packaging subsidiary. Poly-Matrix has manufacturing operations in Pittsfield, MA, and is North America's largest producer of specialty plastic components for DVD, CD and other entertainment packaging. TM Limited is one of Europe's leading suppliers of specialty packaging design, prepress and print services to the movie industry. The company used existing cash to fund the combined purchase price of $41.1 million, net of debt assumed of $14.6 million.
The fiscal year 2001 acquisitions were accounted for using the purchase method of accounting. The tangible and intangible assets acquired and liabilities assumed were recorded at estimated fair values as determined by the company based on information currently available and on current assumptions as to future operations. The purchase price allocation for these acquisitions is preliminary and further refinements are likely to be made upon completion of final valuation studies. Accordingly, the assets and liabilities of the acquired businesses are included in the Consolidated Balance Sheet at December 31, 2001 and October 31, 2001. Preliminary goodwill recognized as a result of the Wall and TM Limited acquisitions was approximately $61.4 million and is being amortized on a straight-line basis over 40 years until Statement of Financial Accounting Standards (SFAS) No. 142 is adopted. Related goodwill for the Poly-Matrix acquisition of approximately $4.8 million has not been amortized, in accordance with SFAS 142, but will be reviewed annually for impairment. The results of operations of the acquired businesses are included in the accompanying financial statements from their respective dates of acquisition. On a pro forma basis, if the businesses acquired during fiscal year 2001 had been acquired at the beginning of fiscal year 2000, Sales and Net income would not differ materially from the amounts reported in the accompanying Consolidated Statements of Income.
In July 2000, Rigesa, Ltda., Westvaco's Brazilian subsidiary, acquired all of the assets of Agaprint Embalagens, a leading supplier of consumer packaging in Brazil. In August 2000, AGI Europe, a Westvaco subsidiary, acquired the privately held DuBOIS Holdings Limited, global licenser and European manufacturer of the DVD-Safe (TM) (or Amaray(R)) package, the world's top-selling DVD package. In October 2000, AGI Europe also acquired Sony Music Printing (Holland) BV. The plant is located adjacent to Sony's CD/DVD distribution center in Haarlem, The Netherlands, and produces printed booklets, folders and inlay cards for Sony as well as multimedia products sold to Sony and other companies throughout Europe. The combined purchase price for these acquisitions was $71.6 million. Goodwill recognized as a result of these acquisitions was approximately $48.9 million and is being amortized on a straight-line basis over 40 years until SFAS 142 is adopted.
Also in July 2000, Westvaco completed its acquisition of AGI (formerly IMPAC Group, Inc.), a leading global supplier of packaging for entertainment products, cosmetics and health and beauty aids with 13 plants in Europe
NOTES TO FINANCIAL STATEMENTS
and eight plants in the United States. The company used existing cash reserves, commercial paper and $400 million of notes issued in June 2000 to fund the purchase price of $253.4 million, net of debt assumed of $274.7 million, resulting in the recognition of goodwill of $368 million. During the fourth quarter of 2001, the company refined the preliminary allocation of the purchase price of AGI. The result was an increase in identifiable intangible assets of $75.1 million and fixed assets of $24.2 million and a credit to goodwill of $61.3 million and to deferred taxes of $38.0 million. Plant, property and equipment is being depreciated over not more than 40 years. Goodwill is being amortized on a straight-line basis over 40 years until SFAS 142 is adopted. Acquired other identifiable intangible assets consist primarily of customer lists, workforce, patents and trade names and are amortized over their useful lives, ranging from 2-40 years using the straight-line method.
In January 2000, Westvaco completed the purchase of Mebane Packaging Group (Mebane), a leading supplier of packaging for pharmaceutical products and personal care items, based in Mebane, NC, for approximately $209.8 million, net of $15.7 million of debt assumed. During fiscal year 2001, the company refined the preliminary allocation of the purchase price of Mebane. The result was an increase in identifiable intangible assets of $15.9 million and fixed assets of $20.5 million and credits to goodwill of $22.3 million and to deferred taxes of $14.1 million. Plant, property and equipment is being depreciated over not more than 15 years. Goodwill is being amortized on a straight-line basis over 40 years until SFAS 142 is adopted. Acquired other identifiable intangible assets consists primarily of customer lists, workforce and trade names and are amortized over their useful lives, ranging from 10-20 years using the straight-line method.
In December 1999, Westvaco completed its acquisition of Temple-Inland's bleached paperboard mill in Evadale, TX (Evadale). The total purchase price, net of $82 million of debt assumed, was $566 million. The company used existing cash reserves, commercial paper and $400 million of debentures issued in November 1999 to fund the purchase. The purchase price was allocated to the net assets of the mill, primarily plant, property and equipment based on independent appraisals of fair values.
Westvaco accounted for all of these transactions using the purchase method of accounting. The purchase price for these acquisitions, including transaction costs, has been allocated to tangible and intangible assets acquired and liabilities assumed based on fair market values at the date of acquisition. The following unaudited pro forma consolidated results of operations are presented as if the Evadale mill, Mebane and AGI acquisitions had been made at the beginning of the periods presented.
The following unaudited pro forma data for the fiscal year 2000 reflects 308 days, 299 days and 113 days of Westvaco's operation of the Evadale mill, Mebane and AGI, respectively. The balance of the fiscal year 2000 and all of the fiscal year 1999 reflect the results of these operations under the management of the prior owners. The unaudited pro forma amounts of the other fiscal year 2000 acquisitions are not included, as their effect is not material to the company's results of operations.
Pro forma in millions, except per share [unaudited] 2000 1999 ---- ---- Net sales $4,185.0 $3,821.1 Income before extraordinary items 236.5 77.5 Per share of common stock: Basic $2.35 $.77 Diluted 2.34 .77 Net income $ 227.7 $ 77.5 Per share of common stock: Basic and diluted $2.26 $.77 |
The pro forma consolidated results of operations include adjustments to give effect to depreciation, amortization of goodwill on a straight-line basis over 40 years and interest expense on acquisition debt, together with related income tax effects. The pro forma information is not necessarily indicative of the results of operations that
NOTES TO FINANCIAL STATEMENTS
would have occurred had the purchases been made at the beginning of the periods presented, nor is it necessarily indicative of the future results of the combined operations.
C. Provisions for restructuring
During the fiscal year ended October 31, 2001, Westvaco recorded total pretax restructuring charges of $56.9 million, including $5.2 million of inventory writedowns included within Cost of products sold.
The following table and discussion presents additional detail to the charges.
In millions ----------- Asset Employee Other Sub- Inventory Writedowns Costs Costs Adjustments Total Writedowns Total ---------- --------- ----- ----------- ----- ---------- ----- Packaging $21.4 $3.2 $0.8 $[0.5] $24.9 $1.6 $26.5 Paper 15.5 5.7 4.6 [0.2] 25.6 3.6 29.2 Chemicals 1.2 - - - 1.2 - 1.2 ----- ----- ----- ----- ----- ----- ----- $38.1 $8.9 $5.4 $[0.7] $51.7 $5.2 $56.9 ===== ==== ==== ===== ===== ==== ===== Balance of related accruals remaining at December 31, 2001 $3.8 $1.8 $5.6 $5.6 ==== ==== ==== ==== |
During the fourth quarter of fiscal 2001, the company recorded a pretax restructuring charge of $53.7 million which consisted of $37.1 million of fixed asset writedowns and $6.7 million of employee termination costs and $5.0 million of other exit costs, primarily lease termination costs. Included in the restructuring charge is related inventory writedowns of $4.9 million, which have been included within Cost of products sold.
Packaging: The realignment of the consumer packaging operations included the closing of the packaging plants in Richmond, VA, and Memphis, TN, by mid-November 2001 and further streamlining of its remaining Richmond packaging operations by relocating equipment to other company facilities. The packaging charge also included the writedown of assets at the company's Covington, VA, mill as part of a plan to focus the mill's production at targeted markets. Charges associated with the shutdowns included $21.4 million to write down the assets using an asset-to-be-held-and-used-model. Severance costs of $3.2 million relate to the termination of approximately 320 employees and other exit costs amounted to $0.8 million. In addition, the company recognized related inventory writedowns of $1.6 million, which have been included within Cost of products sold. At December 31, 2001, all of the plants' employees had been terminated.
Paper: The paper mill in Tyrone, PA, was shutdown in October 2001 due to the competitive pressures caused by the economic slowdown, the strong U.S. dollar and the related sharp increase in imported paper. Charges associated with the shutdown included $14.5 million to write down the assets using an assets-to-be-disposed-of model, $3.5 million of severance costs covering approximately 260 employees and other exit costs of $4.2 million which primarily related to lease termination costs. In addition, the company recognized related inventory writedowns of $3.3 million, which have been included within Cost of products sold. At December 31, 2001, all of the mill's employees had been terminated. During the third quarter of fiscal year 2001, the company recorded a restructuring charge of $1.6 million, due primarily to a salaried workforce reduction of 20 employees at the company's Envelope Division headquarters in Springfield, MA. During the second quarter of fiscal year 2001, the company recorded a restructuring charge of $2.3 million, which consisted of $1.0 million of fixed asset writedowns, $0.6 million of employee termination costs and $0.4 million of other exit costs. Included in the restructuring charge are related inventory writedowns of $0.3 million, which have been included within Cost of products sold. These actions were due to the curtailment of production on two of the three product lines at the company's Envelope Division flexible packaging operation.
Chemicals: The restructuring charge incorporates the writedown of assets at the company's Covington, VA, carbon plant related to a program to concentrate production on high-growth markets.
Also included in the restructuring charges line is a credit of $0.7 million for the reversal of reserves no longer required associated with the restructuring charge taken in fiscal year 1999.
During the third quarter of fiscal year 2000, due to the anticipated decline in future sales of folding cartons to U.S. tobacco markets, Westvaco reviewed certain long-lived assets in its consumer packaging business for impairment. As a result of the review, production facilities were written down to their fair value using an assets-held-for-use model and a pretax impairment charge of $24.3 million, including $3.3 million of associated goodwill, was recorded in the third quarter of fiscal year 2000 in restructuring charges. The impairment was recorded because undiscounted cash flows were less than the carrying value of the assets prior to the impairment charge. During the fourth quarter of 2000, the company recorded an additional pretax charge of $2.9 million relating to the earlier charge and related employee termination costs. Such reserves for these activities were fully utilized at October 31, 2001. During the second quarter of fiscal year 2000, the liquid packaging plant was sold, resulting in a pretax gain of $11.2 million, which is included in the restructuring charges. As noted below, the liquid packaging plant was written down in fiscal year 1999 in connection with the restructuring charge recorded in the fiscal year 1999 fourth quarter. The gain resulted from a change in facts and circumstances in 2000 from that existing during the fourth quarter of fiscal year 1999.
During the fourth quarter of fiscal year 1999, following completion of its strategic review process, Westvaco adopted a plan to improve the company's performance, principally to enhance the strength and focus of its packaging-related businesses. Additionally, Westvaco reviewed certain long-lived assets in its business for impairment. As a result of these initiatives, a pretax charge of $80.5 million was recorded in the fourth quarter of fiscal year 1999. Included in this charge are certain assets of the company's liquid packaging plant that were written down to reflect the plant's planned shutdown. This charge was primarily due to the writedown of impaired long-lived assets, involuntary employee termination and other exit costs. Production facilities were written down to their fair value using an assets-held-for-use model. An impairment of $67.4 million was recorded as undiscounted cash flows were less than the carrying value of the assets prior to the impairment. Further, the company wrote off a paper machine and certain equipment with a total carrying value of $8.6 million and abandoned the assets. During the fourth quarter of fiscal year 1999, in addition to the asset impairments described above, the company also recognized inventory writedowns of $1.7 million, which have been included within the Cost of products sold, employee termination costs of $1.5 million and other exit costs of $1.2 million. Such reserves for these activities were fully utilized at October 31, 2001.
D. Recently issued accounting standards
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS 141,
Business Combinations, and SFAS 142, Goodwill and Other Intangible Assets. SFAS
141 supersedes Accounting Principles Board Opinion (APB) No. 16, Business
Combination. The provisions of SFAS 141 (1) require that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001,
(2) provide specific criteria for the initial recognition and measurement of
intangible assets apart from goodwill, and (3) require that unamortized negative
goodwill be written off immediately as an extraordinary gain instead of being
deferred and amortized. The Poly-Matrix acquisition has been accounted for under
SFAS No. 141. SFAS 141 also requires that upon adoption of SFAS 142, Westvaco
reclassify the carrying amounts of certain intangible assets into or out of
goodwill, based on certain criteria. SFAS 142 supersedes APB 17, Intangible
Assets, and is effective for fiscal years beginning after December 15, 2001.
SFAS 142 primarily addresses the accounting for goodwill and intangible assets
subsequent to their initial recognition. The provisions of SFAS 142 (1) prohibit
the amortization of goodwill and indefinite-lived intangible assets, (2) require
that goodwill and indefinite-lived intangibles assets be tested annually for
impairment (and in interim periods if certain events occur indicating that the
carrying value of goodwill and/or indefinite-lived intangible assets may be
impaired), (3) require that reporting units be identified for the purpose of
assessing potential future impairments of goodwill and (4) remove the forty-year
limitation on the amortization period of intangible assets that have finite
lives.
NOTES TO FINANCIAL STATEMENTS
The company will adopt the provisions of SFAS 142 during the first quarter of fiscal year 2002. The company is in the process of preparing for its adoption of SFAS 142 and is making the determinations as to what its reporting units are and what amounts of goodwill, intangible assets, other assets and liabilities should be allocated to those reporting units. The company expects that it will no longer record approximately $14.0 million of amortization relating to its existing goodwill and indefinite-lived intangibles.
SFAS 142 requires that goodwill be tested annually for impairment using a two-step process. The first step is to identify a potential impairment and, in transition, this step must be measured as of the beginning of the fiscal year. However, a company has six months from the date of adoption to complete the first step. The company expects to complete that first step of the goodwill impairment test during the first quarter of 2002. The second step of the goodwill impairment test measures the amount of the impairment loss (measured as of the beginning of the year of adoption), if any, and must be completed by the end of the company's fiscal year. Intangible assets deemed to have an indefinite life will be tested for impairment using a one-step process which compares the fair value to the carrying amount of the asset as of the beginning of the fiscal year, and pursuant to the requirements of SFAS 142 will be completed during the first quarter of 2002. Any impairment loss resulting from the transitional impairment tests will be reflected as the cumulative effect of a change in accounting principle in the first quarter 2002. Based upon the goodwill assessment work to date, the company estimates that a noncash goodwill impairment charge in the range of $250-350 million will be recorded in 2002 as the effect of adopting the new accounting standard. Any resulting impairment charge will be the same before and after taxes as the related goodwill cannot be deducted for tax purposes.
In August 2001, the FASB issued SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which establishes one accounting model to be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. SFAS 144 supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets to Be Disposed Of and the accounting and reporting provisions of APB Opinion 30. SFAS 144 is effective for fiscal years beginning after December 15, 2001. The company does not anticipate any immediate financial statement impact with the adoption of this statement.
E. Other income [expense]
Components of other income [expense] are as follows:
Transition period ended December 31, Fiscal year ended October 31, ------------- -------------------------------------- In millions 2001 2001 2000 1999 ----------- ------------- ----- ----- ----- Gains [losses] on sales of plant, equipment and timberlands $[3.5] $37.7 $26.8 $17.9 Interest income 0.9 11.5 28.4 15.1 Foreign currency transaction gains [losses] 0.4 [1.2] [0.9] [3.6] Other, net [0.1] 0.1 2.7 - ----- ---- ----- ---- $[2.3] $48.1 $57.0 $29.4 ===== ==== ==== ==== |
F. Research and development
Expenditures of $7.3 million for the transition period ended December 31, 2001, and $47.5 million, $49.5 million and $47.3 million in the fiscal years ended October 31, 2001, 2000 and 1999, respectively, were expensed as incurred.
NOTES TO FINANCIAL STATEMENTS
G. Income taxes
Income [loss] before provision [benefit] for income taxes consisted of:
Transition period ended December 31, Fiscal year ended October 31, ------------ ---------------------------------------- In millions 2001 2001 2000 1999 ----------- ------- ------ ------ ------ U.S. $[52.0] $ 51.6 $354.4 $113.4 Non U.S. 13.4 66.9 49.2 34.6 ----- ----- ----- ----- $[38.6] $118.5 $403.6 $148.0 ===== ===== ===== ===== |
The provision [benefit] for income taxes is composed of:
Transition period ended December 31, Fiscal year ended October 31, ------------ ---------------------------------------- In millions 2001 2001 2000 1999 ----------- ------- ------ ------ ------ Current: Federal $[11.4] $ [20.9] $38.1 $ 4.4 State [2.3] [4.3] 7.6 [4.6] Foreign 1.6 11.9 8.3 4.7 ------ ------ ----- ---- [12.1] [13.3] 54.0 4.5 ------ ------ ----- ---- Deferred: Federal [4.3] 34.4 85.8 43.3 State [0.3] 4.7 7.9 [15.4] Foreign [0.2] 4.5 1.2 4.4 ------ ------ ----- ---- [4.8] 43.6 94.9 32.3 ------ ------ ----- ---- $[16.9] $ 30.3 $148.9 $36.8 ====== ====== ===== ==== |
The net deferred income tax liability includes the following components:
Transition period ended December 31, Fiscal year ended October 31, ------------ ----------------------------- In millions 2001 2001 2000 ----------- ---------- ------ ------- Current deferred tax assets: Employee benefits $ 21.4 $ 21.4 $ 19.3 Other 43.2 41.6 38.1 ------- ------- ------- 64.6 63.0 57.4 ------- ------- ------- Noncurrent deferred tax assets: Alternative minimum tax carryforward 139.4 127.7 112.0 ------- ------- ------- Noncurrent deferred tax liabilities: Depreciation 715.3 715.1 686.5 Pension and other employee benefits 256.0 248.0 199.4 State and local taxes 100.0 100.1 98.1 Identifiable intangibles 39.4 35.0 - Other 35.8 37.3 35.7 ------- ------- ------- 1,146.5 1,135.5 1,019.7 ------- ------- ------- |
Total net deferred tax liability $ 942.5 $ 944.8 $ 850.3 ======= ======= ======= |
The differences (expressed as a percentage of pretax income) between the U.S. statutory federal income tax rate and the effective income tax rate as reflected in the accompanying Consolidated Statements of Income are:
Transition period ended December 31, Fiscal year ended October 31, ------------ -------------------------------- 2001 2001 2000 1999 ------- ---- ---- ---- Statutory federal income tax rate 35.0% 35.0% 35.0% 35.0% State and local taxes 4.3 0.2 2.5 [8.8] Foreign income at other than U.S. rates * 8.6 [9.7] [1.7] [1.3] Goodwill [2.2] 4.5 0.9 - Research credit 0.3 [3.4] [0.2] - Resolution of domestic prior years tax issues [0.8] [2.8] [0.1] [0.9] Other, net [1.4] 1.8 0.5 0.9 ---- ----- ---- ---- Effective tax rate 43.8% 25.6% 36.9% 24.9% ==== ===== ==== ==== |
* includes amounts resulting from resolution of prior years tax issues
At December 31, 2001, for tax purposes, Westvaco had available $139 million of alternative minimum tax credit carryforwards, which do not expire under current laws. At December 31, 2001, Westvaco had available $1.7 million of foreign tax credit carryforwards, which, if unused, will expire in fiscal year 2004.
Provision has not been made for income taxes which would become payable upon remittance of $216 million of the December 31, 2001 undistributed earnings of certain foreign subsidiaries representing that portion of such earnings which the company considers to have been indefinitely reinvested in the subsidiaries, principally in Brazil. Computation of the potential deferred tax liability associated with these undistributed earnings is not practicable. Current deferred taxes at December 31, 2001 of $64.6 million and $63.0 million and $57.4 million at October 31, 2001 and 2000, respectively, are included in Prepaid expenses and other current assets.
H. Current assets
Marketable securities of $22.6 million at December 31, 2001 and $18.1 million and $22.0 million at October 31, 2001 and 2000, respectively, are valued at cost, which approximates market value. Trade receivables have been reduced by allowances for discounts and doubtful accounts of $16.5 million at December 31, 2001 and $16.1 million and $17.6 million at October 31, 2001 and 2000, respectively. Receivables also include $53.1 million from sources other than trade at December 31, 2001 and $46.5 million and $15.9 million at October 31, 2001 and 2000, respectively, relating to income taxes, by-product sales and other items. Inventories after adjustment to LIFO value at December 31, 2001 and October 31, 2001 and 2000 are composed of:
Transition period ended December 31, Fiscal year ended October 31, ------------ ----------------------------- In millions 2001 2001 2000 ----------- ------------- ---------- ------- Raw materials $ 82.0 $ 82.1 $ 73.1 Production materials, stores and supplies 79.9 79.6 78.8 Finished and in process goods 272.7 264.7 181.4 ----- ----- ----- $434.6 $426.4 $333.3 ===== ===== ===== |
If inventories had been valued at current cost, they would have been $569.8 million at December 31, 2001 and $565.5 million and $469.5 million at October 31, 2001 and 2000, respectively. Inventories valued on the LIFO basis were $282.9 million at December 31, 2001 and $273.1 million and $202.4 million at October 31, 2001 and 2000, respectively.
I. Interest capitalization
Interest cost incurred was $34.2 million for the transition period ended December 31, 2001 and $215 million, $197.7 million and $132.4 million for the fiscal years ended October 31, 2001, 2000 and 1999, respectively. Interest capitalized during the transition period ended December 31, 2001 was $1.3 million and $7.3 million, $5.5 million and $8.9 million for the fiscal years ended October 31, 2001, 2000 and 1999, respectively.
J. Accounts payable and accrued expenses
Transition period ended December 31, Fiscal year ended October 31, -------------- ----------------------------- In millions 2001 2001 2000 ----------- ------------- ------ ----- Accounts payable: Trade $164.2 $139.4 $156.4 Other 45.9 35.2 34.9 Accrued expenses: Taxes, other than income 25.3 34.5 33.6 Interest 54.1 57.3 52.8 Payroll and employee benefit costs 127.3 130.0 125.4 Accrued rebates 34.1 30.7 29.8 Other 93.0 84.5 90.3 ----- ----- ----- $543.9 $511.6 $523.2 ===== ===== ===== |
NOTES TO FINANCIAL STATEMENTS
K. Cash flows Transition period ended Changes in assets and liabilities are as follows: December 31, Fiscal year ended October 31, ------------- ----------------------------------------- In millions 2001 2001 2000 1999 ----------- ------------- ------- ------ ------- [Increase] decrease in: Receivables $ 22.5 $ 22.8 $[15.6] $ [41.1] Inventories [6.4] [66.6] [0.8] 24.5 Prepaid expenses and other current assets [4.8] [5.8] 1.9 [1.1] Other non-current assets [1.7] [15.7] - - Increase [decrease] in: Accounts payable and accrued expenses 5.5 [46.7] 39.0 24.8 Income taxes payable [2.0] 3.6 0.8 [9.7] ----- ------- ---- ------- $ 13.1 $[108.4] $ 25.3 $ [2.6] ===== ======= ==== ======= Reconciliation of capital expenditures on a cash basis: Transition period ended Fiscal year ended October 31, December 31, -------------------------------- In millions 2001 2001 2000 1999 ----------- ----- ------ ----- ----- New investment in plant and timberlands $ 56.2 $296.4 $212.3 $232.3 Less: debt assumed - [9.0] [0.3] [0.2] net change in related current liabilities [2.1] 3.0 2.0 [3.2] ----- ----- ----- ----- Cash additions to plant and timberlands $ 54.1 $290.4 $214.0 $228.9 ===== ===== ===== ===== |
Cash payments for interest for the transition period ended December 31, 2001, excluding amounts capitalized, were $40.3 million and $209.2 million, $167.1 million and $112.1 million for the fiscal years ended 2001, 2000 and 1999, respectively. Cash payments for the transition period ended December 31, 2001 for income taxes were $0.7 million and $2.7 million, $40.2 million and $12.1 million for the fiscal years ended 2001, 2000 and 1999, respectively. Dividends declared during the transition period ended December 31, 2001 were $.22 per share. Dividends declared and paid were $.88 per share for the fiscal years ended 2001, 2000 and 1999.
L. Leasing activities and other commitments
The company leases a variety of assets for use in its operations. Leases for administrative offices, converting plants and storage facilities generally contain options which allow the company to extend lease terms for periods up to 25 years, or to purchase the properties. Certain leases provide for escalation of the lease payments as maintenance costs and taxes increase. Minimum rental payments under operating leases that have noncancellable lease terms in excess of 12 months are as follows:
NOTES TO FINANCIAL STATEMENTS
In millions Operating leases ----------- ---------------- 2002 $42.2 2003 33.6 2004 26.4 2005 19.7 2006 14.7 Later years 58.8 ----- Minimum lease payments $195.4 ===== |
Rental expense under operating leases was $9.2 million for the transition period ended December 31, 2001 and $54.8 million, $48.4 million and $38.4 million for the fiscal years ended October 31, 2001, 2000 and 1999, respectively. At December 31, 2001, commitments required to complete currently authorized capital projects are approximately $191 million.
M. Long-term debt
Long-term debt consists of the following at:
At October 31, -------------- In millions At December 31, 2001 2001 2000 ------------ -------------------- ---- ---- Notes: 6.85%, due 2004 $200.0 $ 200.0 $ 200.0 7.10%, due 2009 203.0 208.9 200.0 8.40%, due 2007 200.0 200.0 200.0 Floating rate, due 2003 200.0 200.0 200.0 Debentures: 7.95%, due 2031 300.0 300.0 - 8.20%, due 2030 400.0 400.0 400.0 9.65%, due 2002 100.0 100.0 100.0 9 3/4%, due 2020 100.0 100.0 100.0 Sinking Fund Debentures: 7%, due 2004-2023 150.0 150.0 150.0 7 1/2%, due 2008-2027 150.0 150.0 150.0 7.65%, due 2008-2027 150.0 150.0 150.0 7.75%, due 2004-2023 150.0 150.0 150.0 8 1/8%, due 2001-2007 - - 14.8 8.30%, due 2003-2022 125.0 125.0 125.0 Pollution Control Revenue Bonds: 5.85-6.65%, due 2004-2018 26.6 26.6 26.6 5 7/8-5.9%, due 2002-2003 4.9 4.9 6.7 5 7/8-6.2%, due 2002-2007 7.8 10.9 11.5 5.9-6.2%, due 2004-2008 5.9 5.9 5.9 6 3/8%, due 2026 5.7 5.7 5.7 8 1/4%, due 2001-2010 - - 4.0 9 1/8-9.6%, due 2006-2015 10.1 10.1 10.1 10 1/2%, due 2004 1.5 1.5 1.5 Industrial Revenue Bonds: 7-7.67%, due 2002-2027 80.0 94.1 94.5 Floating rate, due 2009 17.2 - - Floating rate, due 2002-2014 43.9 44.4 46.1 Economic Development Bonds: 8 3/4%, due 2002-2010 4.1 4.1 4.2 Notes payable and other 228.1 191.3 360.2 ------- ------- ------- 2,863.8 2,833.4 2,716.8 Less installments due within one year [166.6] [172.9] [30.1] ------- ------- ------- Long-term debt $2,697.2 $2,660.5 $2,686.7 ======= ======= ======= |
Outstanding debt maturing in the next five years are (in millions): 2002-$166.6; 2003-$309.7; 2004-$249.3; 2005-$45.7; 2006-$39.3.
In December 2001, MeadWestvaco negotiated a $500 million bank credit agreement that expires in
NOTES TO FINANCIAL STATEMENTS
December 2002 and a $500 million bank credit agreement that expires in December 2006. These new agreements became effective upon merger. Their terms and covenants are similar to those contained in the company's prior agreements.
Prior to the merger, Westvaco maintained a $500 million revolving credit
agreement. Borrowings under the agreement could have been in unsecured domestic
or Eurodollar notes and at rates approximating prime or the London Interbank
Offered Rate (LIBOR), at the company's option. There was a nominal commitment
fee on the unused funds. These facilities were used to support commercial paper
borrowings. The revolving credit agreement contained financial covenants
relating to limiting the ratio of total debt to total capitalization to 0.55 to
1. There were no borrowings under this facility during 2001, 2000 or 1999.
Included in Notes payable and other in the prior table are short-term borrowings
amounting to $75 million, which have been classified as long-term obligations.
These borrowings have repayment terms that can be extended under the loan
agreement and are intended to be outstanding more than one year.
At December 31, 2001, Westvaco had $75 million of commercial paper outstanding compared to $30 million and $270 million at October 31, 2001 and 2000, respectively. The maximum amounts of combined commercial paper outstanding during the two months ended December 31, 2001 was $75 million compared to $380 million and $440 million for the years ended October 31, 2001 and 2000 respectively. The average amount of commercial paper outstanding during the two months ended December 31, 2001 was $14.7 million with an average interest rate of 2.9%. The average amount of commercial paper outstanding during the years ended October 31, 2001 and 2000, were $14.7 million and $21.5 million. For fiscal years 2001 and 2000, the average interest rates for these borrowings were 6.05% and 6.42%.
In February 2001, Westvaco issued $300 million of 7.95% thirty-year notes in part to repay existing debt and for working capital purposes. During the second quarter of fiscal year 2000, the company recorded an extraordinary charge of $8.8 million after tax, or $.09 per share, from the early retirement of $270 million of higher interest rate debt.
At December 31, 2001, the book value of financial instruments included in long-term debt was $2.9 billion, and the fair value was estimated to be $3 billion. At October 31, 2001, the book value of financial instruments included in long-term debt was $2.8 billion (2000-$2.7 billion), and the fair value was estimated to be $3 billion (2000-$2.7 billion). The difference between book value and market value is derived from the difference between the period-end market interest rate and the stated rate for the company's long-term debt. The company has estimated the fair value of financial instruments based upon quoted market prices for the same or similar issues or on the current interest rates available to the company for debt of similar terms and maturities.
N. Financial instruments
Prior to the fiscal year 2001 third quarter, Westvaco had no derivative instruments. In the third quarter of 2001, the company initiated the use of an interest rate swap agreement to hedge the interest rate characteristics (risks) of a portion of its outstanding fixed-rate debt. The company's goal is to create a prudent balance between fixed and floating rates. The hedge qualifies as a fair value hedge under the SFAS 133 criteria. The company, at inception, formally designates and documents the instruments as hedges of specific underlying exposures, and documents the risk management objective and strategy for each hedge transaction. Changes in the fair value of a derivative that is highly effective, and that is designated and qualifies as a fair value hedge, along with the changes in the fair-value hedged asset or liability that are attributable to the hedged risk, are recorded in the current-period earnings. Because of the high degree of effectiveness between the hedging instrument and the underlying exposure being
NOTES TO FINANCIAL STATEMENTS
hedged, fluctuations in the value of the derivative instruments are generally offset by changes in the value or cash flows of the underlying exposures being hedged.
Under an interest rate swap contract, Westvaco agrees to pay an amount equal to a specified variable-rate of interest times a notional principal amount, and to receive in return an amount equal to a specified fixed rate of interest times the same notional principal amount. The notional amounts of the contract are not exchanged. No other cash payments are made unless the contract is terminated prior to maturity, in which case the amount paid or received in settlement is established by agreement at the time of termination, and usually represents the net present value, at current rates of interest, of the remaining obligations to exchange payments under the terms of the contract. Interest rate swap contracts are entered into with major financial institutions in order to minimize counterparty credit risk.
At December 31, 2001, Westvaco had an interest rate swap contract to pay variable rates of interest based on six-month LIBOR plus 1.115%, (currently 3.089%) and receive fixed rates of interest of 7.1% on $100 million notional amount of indebtedness. This resulted in approximately 17% of Westvaco's debt being subject to variable interest rates. The company has designated this derivative instrument as a fair-value hedge. The $100 million notional amount of outstanding contracts will mature during 2009. As of December 31, 2001 and October 31, 2001, the company has recorded the fair value of the derivative instrument asset of $3.0 million and $8.9 million, respectively, in other assets in the Consolidated Balance Sheet. At October 31, 2000, Westvaco did not have any interest rate swap contracts. During the current transition period and the year ended October 31, 2001, the interest rate swap was an effective hedge and therefore required no charge to earnings under SFAS 133.
O. Shareholders' equity
The value included in common stock for all periods presented reflects common stock at par and additional paid-in capital.
Westvaco did not repurchase shares of company stock during the transition period ended December 31, 2001, and repurchased 60,000, 80,000 and 460,000 in the fiscal years ended October 31, 2001, 2000 and 1999, respectively, under a repurchase program authorized in 1997 by the Board of Directors. The program was initiated to satisfy issuances under the company's stock option plans. There were no purchases in 1999, 2000 or 2001 under the stock repurchase program authorized in 1987 by the Board of Directors.
At December 31, 2001, there were 44,170 shares of nonvoting $100 par value cumulative preferred stock authorized and 10 million shares of preferred stock without par value authorized and available for issue. Pursuant to a Rights Agreement approved by the company's Board of Directors in 1997, in the event a person or group were to acquire a 15% or greater position in Westvaco, each right would entitle its holder (other than the acquiror) to buy that number of shares of common stock of Westvaco which, at the time of the 15% acquisition, had a market value of two times the exercise price of the rights. If, after the rights have been triggered, an acquiring company were to merge or otherwise combine with Westvaco, or Westvaco were to sell 50% or more of its assets or earning power, each right would entitle its holder (other than the acquiror) to buy that number of shares of common stock of the acquiring company which, at the time of such transaction, would have a market value of two times the exercise price of the rights. The rights have no effect on earnings per share until they become exercisable. The rights expire in December 2007.
On August 28, 2001, the Rights Agreement was amended in connection with the merger with Mead to provide that none of the entities involved in the merger transaction would be deemed an acquirer for the purposes of the Rights Agreement, and to provide that the Rights would expire immediately
NOTES TO FINANCIAL STATEMENTS
prior to the merger.
P. Stock option plans
At December 31, 2001, Westvaco had five stock option plans. The 1983 and 1988 Stock Option and Stock Appreciation Rights Plans, 1995 Salaried Employee Stock Incentive Plan and the 1999 Salaried Employee Stock Incentive Plan provide for the granting of up to 4,725,000, 4,500,000, 4,837,500 and 5,000,000, respectively, of stock options and stock appreciation rights to key employees. The 1995 Non-Employee Director Stock Incentive Plan provides for the granting of up to 112,500 stock options and stock appreciation rights to outside directors. For the employee plans, stock options may be granted with or without stock appreciation rights and are granted at market value. They are exercisable after a period of six months to one year and expire not later than ten years from the date of grant. Under each employee plan, stock options may be granted with or without limited stock appreciation rights, which are exercisable upon the occurrence of certain events related to changes in corporate control. The merger with Mead does not cause such rights to be exercisable. In 1999, nearly all outstanding limited stock appreciation rights, which had previously been granted to employees, were cancelled or surrendered. Except for grants to employees of the company that are employed in countries that do not allow local employees to hold stock options of companies domiciled in other countries, no new grants for stock appreciation rights were awarded during the transition period ended December 31, 2001 and for the fiscal years ended October 31, 2001 and 2000.
The company applies APB Opinion No. 25, Accounting for Stock Issued to Employees, as amended, in accounting for its plans. If compensation cost for the company's stock options had been determined based on the fair value method of SFAS 123, Accounting for Stock-Based Compensation, the company's net income and net income per share would have been reduced to the unaudited pro forma amounts as follows:
Transition period ended December 31, Fiscal year ended October 31, ------------ ----------------------------- In millions, except per share 2001 2001 2000 1999 ----------------------------- ------------ ------ ------ ------ Net income [loss] As reported $[21.7] $88.2 $245.9 $111.2 Pro forma - unaudited [28.0] 82.1 240.8 107.9 Income [loss] per share - basic As reported $[.21] $.87 $2.44 $1.11 Pro forma - unaudited [.27] .81 2.39 1.08 Income [loss] per share - diluted As reported $[.21] $.87 $2.44 $1.11 |
NOTES TO FINANCIAL STATEMENTS
Pro forma - unaudited [.27] .81 2.39 1.07 |
In determining the fair value of options for pro forma purposes, Westvaco used the Black-Scholes option pricing model and assumed the following for options granted during the transition period ended December 31, 2001 and fiscal years ended October 31, 2001, 2000 and 1999, respectively: risk-free interest rate of 4.77%, 5.61%, 6.13% and 4.72%; dividend yield of 3.07%, 3.15%, 2.87% and 3.05%; an expected option life of seven years for the transition period ended December 31, 2001 and six years for each fiscal year ended October 31, 2001, 2000 and 1999; and an expected volatility of 25%, 25%, 22% and 20% for each period. The weighted average fair values of the options granted during the transition period ended December 31, 2001 and fiscal years ended October 31, 2001, 2000 and 1999 were $7.30, $7.05, $7.65 and $5.34 per share, respectively.
The following table summarizes activity in the plans for the transition period ended December 31, 2001 and fiscal years ended October 31, 2001, 2000 and 1999:
Weighted average Options exercise price --------- ---------------- Outstanding at October 31, 1998 5,138,841 $26.49 Granted 1,001,655 28.78 Exercised [466,169] 22.31 Cancelled [19,527] 26.71 --------- Outstanding at October 31, 1999 5,654,800 27.24 Granted 1,079,455 30.63 Exercised [514,611] 24.48 Cancelled [9,087] 27.33 --------- Outstanding at October 31, 2000 6,210,557 28.08 Granted 1,406,280 27.91 Exercised [293,279] 23.40 Cancelled [90,427] 26.61 --------- Outstanding at October 31, 2001 7,233,131 28.25 Granted 1,406,755 28.67 Exercised [145,798] 24.09 Cancelled [8,900] 26.82 --------- Outstanding at December 31, 2001 8,485,188 28.39 ========= |
The following table shows various information about stock options outstanding at December 31, 2001:
Range of exercise prices -------------------------------------------------------------- $23.08 - $25.06 - Over |
NOTES TO FINANCIAL STATEMENTS
$24.25 $27.50 $27.50 Total -------- ----------- ----------- ------------ Number outstanding 432,996 2,268,842 5,783,350 8,485,188 Weighted average price $23.64 $26.41 $29.53 $28.39 Weighted average remaining life (in years) 1.49 4.14 8.13 6.73 Number exercisable 432,996 2,268,842 4,376,595 7,078,433 Weighted average price $23.64 $26.41 $29.80 $28.34 |
There were 1,684,657 shares available for grant as of December 31, 2001, and 3,084,012, 4,401,265 and 5,476,570 as of October 31, 2001, 2000 and 1999, respectively. At December 31, 2001, 476,297 outstanding options had related limited stock appreciation rights and 55,100 stock appreciation rights were outstanding. The company measures compensation expense related to the stock appreciation rights at the end of each period as the amount by which the quoted market value of the shares of the company's stock covered by a grant exceeds the option price specified under the plan and accrues such amount as a charge to expense over the periods the employee performs the related services. Changes in the quoted market value are reflected as an adjustment of accrued compensation and compensation expense in the periods in which the changes occur. For all periods presented, the expenses related to stock appreciation rights has not been material. There have been no exercises of stock appreciation rights for the transition period ended December 31, 2001 or for fiscal years ended October 31, 2001, 2000 and 1999, respectively.
Q. Employee retirement, postretirement and postemployment benefits
Pension and retirement plans
Westvaco provides retirement benefits for substantially all domestic employees under several noncontributory trusteed plans and also provides benefits to employees whose retirement benefits exceed maximum amounts permitted by current tax law under an unfunded benefit plan. Benefits are based on a final average pay formula for the salaried plans and a unit benefit formula for the hourly paid plans. Prior service costs are amortized on a straight-line basis over the average remaining service period for active employees. Contributions are made to the funded plans in accordance with ERISA requirements. Plan assets are comprised mainly of listed stocks, including $71 million of company stock, money market and fixed income investments.
Net pension credit relating to employee pension and retirement benefits was $22.9 million for the transition period ended December 31, 2001 and $134.9 million, $108.2 million and $82.3 million for fiscal years ended October 31, 2001, 2000 and 1999, respectively. The net pension credit reflects cumulative favorable investment returns on plan assets. The components of the net pension credit for the transition period ended December 31, 2001 and the fiscal years ended October 31, 2001, 2000 and 1999 are as follows:
NOTES TO FINANCIAL STATEMENTS
Transition period ended December 31, Fiscal year ended October 31, ------------ --------------------------------- In millions 2001 2001 2000 1999 ----------- ------------ ---- ---- ---- Service cost-benefits earned during the period $ 6.3 $ 32.8 $ 28.6 $ 28.9 Interest cost on projected benefit obligation 14.3 79.6 74.2 71.7 Expected return on plan assets [39.7] [216.7] [187.5] [171.2] Net transition asset [0.4] [6.4] [6.9] [6.9] Amortization of prior service cost 1.4 6.7 5.5 5.5 Net gain [4.8] [30.9] [22.1] [10.3] ------ ------- ------- ------ Net pension credit $[22.9] $[134.9] $[108.2] $[82.3] ====== ======= ======= ====== Additional minimum liability $ 0.4 $ [5.1] $ - $ - ====== ======= ======= ====== |
Postretirement benefits
Westvaco provides life insurance for substantially all retirees and medical benefits to certain retirees in the form of cost subsidies until medicare eligibility is reached and to certain other retirees, medical benefits up to a maximum lifetime amount. None of these benefits are funded. The components of net periodic postretirement benefits cost for the transition period ended December 31, 2001 and the fiscal years ended October 31, 2001, 2000 and 1999 are as follows:
Transition period ended December 31, Fiscal year ended October 31, ------------- --------------------------------- 2001 2001 2000 1999 ------------- ---- ---- ---- In millions ----------- Service cost-benefits earned during the period $ 0.3 $ 1.2 $ 1.3 $ 1.2 Interest cost 0.2 1.3 1.3 1.2 Net amortization [0.1] [0.6] [0.9] [1.1] ----- ----- ----- ----- Net periodic postretirement benefits cost $ 0.4 $ 1.9 $ 1.7 $ 1.3 ===== ===== ===== ===== |
The changes in the consolidated prepaid pension asset for defined benefit plans and the accrued postretirement benefit obligation are shown below. The net prepaid pension cost, from the following table, is included in other assets, except for an obligation of $33 million for an unfunded excess benefit plan which is recorded as a long-term liability. For plans with accumulated benefit obligations in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets were $54 million, $33 million and $0, respectively, at December 31, 2001 and October 31, 2001 and 2000.
NOTES TO FINANCIAL STATEMENTS
The following table sets forth the funded status of the plans and amounts recognized in the Consolidated Balance Sheets at December 31 and October 31, based on valuation dates of September 30 and July 31:
In millions ----------- Pension and retirement benefits Postretirement benefits ------------------------------- ----------------------- Transition Fiscal year ended Transition Fiscal year ended period ended ----------------- period ended ----------------- December 31, October 31, December 31, October 31, ----------- ---------- 2001 2001 2000 2001 2001 2000 ---- ---- ---- ---- ---- ---- Change in benefit obligation Benefit obligation at beginning of period $1,361.6 $1,204.2 $1,123.4 $ 21.0 $ 19.6 $ 19.9 Service cost 6.3 32.8 28.6 0.3 1.2 1.3 Interest cost 14.3 79.6 74.2 0.2 1.3 1.3 Actuarial gain [loss] 23.0 70.4 0.7 - 1.2 [0.5] Plan amendments - 29.0 20.7 - - - Foreign currency exchange rate changes [0.3] 0.1 - - - - Employee contributions - 0.1 - - - - Acquisitions 2.2 2.2 9.7 - 0.6 - Termination benefits 3.7 1.8 - - - - Benefits paid [10.6] [58.6] [53.1] [0.3] [2.8] [2.4] -------- -------- -------- ------- ------ ------ Benefit obligation at end of year $1,400.2 $1,361.6 $1,204.2 $ 21.2 $ 21.1 $ 19.6 ======== ======== ======== ======= ====== ====== Change in plan assets Fair value of plan assets at beginning of period $2,542.3 $2,753.7 $2,614.3 $ - $ - $ - Actual return on plan assets [241.6] [157.6] 179.8 - - - Company contributions 0.7 2.1 1.9 0.3 2.8 2.4 Acquisitions 1.4 2.5 10.8 - - - Foreign currency exchange rate changes [0.3] 0.1 - - - - Employee contributions - 0.1 - - - - Benefits paid [10.6] [58.6] [53.1] [0.3] [2.8] [2.4] -------- -------- -------- ------ ------ ------ Fair value of plan assets at end of year $2,291.9 $2,542.3 $2,753.7 $ - $ - $ - ======== ======== ======== ====== ====== ====== Funded status of the plans $ 891.7 $1,180.7 $1,549.6 $[21.2] $[21.1] $[19.6] Unrecognized net actuarial gain [224.7] [511.1] [986.7] [4.9] [5.0] [6.8] Unrecognized prior service cost 106.3 84.5 62.1 - - - Unrecognized net transition obligation [2.2] [2.6] [9.0] - - - -------- -------- -------- ------- ------ ------ Net prepaid pension asset [liability] $ 771.1 $ 751.5 $ 616.0 $ [26.1] $[26.1] $[26.4] ======== ======== ======== ======= ====== ====== Prepaid benefit cost $ 800.1 $ 779.4 $ 641.7 $ - $ - $ - Accrued benefit liability [33.7] [33.0] [25.7] [26.1] [26.1] [26.4] Accumulated other comprehensive income 4.7 5.1 - - - - -------- -------- -------- ------- ------ ------ Total recognized $ 771.1 $ 751.5 $ 616.0 $ [26.1] $[26.1] $[26.4] ======== ======== ======== ======= ====== ====== |
NOTES TO FINANCIAL STATEMENTS
The assumptions used in the measurement of the company's benefit obligations are as follows:
Transition period ended Fiscal year ended October 31, December 31, -------------------------------- 2001 2001 2000 1999 ---- ---- ---- ---- Pension and retirement benefits Discount rate 6.50% 6.50% 6.75% 6.75% Expected return on plan assets 8.75% 8.75% 8.75% 8.75% Rate of compensation increase 5.00% 5.00% 5.00% 5.00% Postretirement benefits Discount rate 6.50% 6.50% 6.75% 6.75% Rate of compensation increase 5.00% 5.00% 5.00% 5.00% |
The annual rate of increase in health care costs was assumed at 10% for 2001 declining 0.5% per year until reaching 5% in 2011 and thereafter. The effect of a 1% increase in the assumed health care cost trend rate would increase the September 30, 2001 accumulated postretirement benefit obligation by $265,000 and the net postretirement benefits cost for 2001 by $11,000. The effect of a 1% decrease in the assumed health care cost trend rate would decrease the September 30, 2001 accumulated postretirement benefit obligation by $234,000 and the net postretirement benefits cost for 2001 by $10,000.
The company also has defined contribution plans that cover substantially all U.S. employees. Expense for company matching contributions under these plans was approximately $3.7 million for the transition period ended December 31, 2001 and $20.8 million, $24.6 million and $18.0 million in fiscal years ended October 31, 2001, 2000 and 1999, respectively.
Postemployment benefits
Westvaco provides limited postemployment benefits to former or inactive employees, including short-term disability, workers' compensation and severance.
R. Environmental and legal matters
Westvaco is currently named as a potentially responsible party with respect to the cleanup of a number of hazardous waste sites under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and similar state laws. While joint and several liability is authorized under CERCLA, as a practical matter, remediation costs will be allocated among the waste generators and others involved. The company has accrued approximately $4 million for estimated potential cleanup costs based upon its close monitoring of ongoing activities and its past experience with these matters. In addition, the company is involved in the remediation of certain other than CERCLA sites and has accrued approximately $13 million for remediation of these sites.
The company is involved in various legal proceedings and environmental actions, generally arising in the normal course of its business. Although the ultimate outcome of such matters cannot be predicted with certainty, the company does not believe that the outcome of any
NOTES TO FINANCIAL STATEMENTS
proceeding, lawsuit or claim that is pending or threatened, or all of them combined, will have a material adverse effect on its consolidated financial position, liquidity or results of operations.
S. Business segment information
Commencing with the first quarter ended March 31, 2002, MeadWestvaco's principal business segments are projected to be (1) packaging, (2) coated and specialty papers, (3) consumer and office products, and (4) specialty chemicals.
Westvaco is a leading manufacturer of packaging, paper and chemicals serving both U.S. and international markets. Westvaco's principal business segments, which account for the majority of sales, income and the asset base are:
The packaging segment manufactures, markets and distributes bleached paperboard, kraft paper and board and packaging for consumer products markets. The packaging segment also manufactures printed plastic packaging and injection-molded products used for packaging DVDs and CDs. These products are manufactured at three domestic mills and two mills located in Brazil; paper and board are converted into packaging products at plants located in the United States, Brazil and Europe. These products are sold primarily in the United States with additional markets located in Brazil, Europe, Asia and the Pacific Rim. In Brazil, Rigesa is a major producer of paperboard and corrugated packaging for the markets of that country. Operating results for Rigesa are subject to the economic conditions in Brazil, including its inflation and currency fluctuations.
The paper segment is engaged in the manufacturing and marketing of printing grade papers and envelopes. All of this segment's operations are in the United States. It operates two mills in the eastern half of the country and manufactures envelopes at nine domestic plants.
The chemicals segment manufactures products at four domestic locations. Major product groups are: activated carbon products and services; printing ink resins and lignin-based surfactants; tall oil fatty acid, rosin and derivative products.
Corporate and other includes the company's forestry operations and income and expense items and activities not directly associated with segment operations, including corporate support staff services and related assets and liabilities.
The segments are measured on operating profits before restructuring charges, interest expense, income taxes, extraordinary items and cumulative effect of accounting changes, except for Rigesa in the packaging segment, whose operating profit includes interest income of $0.5 million for the two months ended December 31, 2001 and $7.0 million, $10.0 million and $13.2 million in the fiscal years ended 2001, 2000 and 1999, respectively, and interest expense of $0.4 million for the two months ended December 31, 2001 and $3.3 million, $5.3 million and $4.6 million in the fiscal years ended 2001, 2000 and 1999, respectively. The segments follow the same accounting principles described in the Summary of Significant Accounting Policies. Sales between the segments are recorded primarily at market prices. The fiscal year 2001 restructuring charges of $56.9 million are related to the closure of the company's Tyrone, PA, mill, closure of components of the Consumer Packaging Group's Richmond, VA, and Memphis, TN, plants and other asset writedowns. The fiscal year 2001 restructuring charges related to packaging, paper and chemicals were $27.0 million, $28.7 million and $1.2 million, respectively. The fiscal year 2000 restructuring charge of $27.2 million, related to the expected decline in sales of folding
NOTES TO FINANCIAL STATEMENTS
cartons to U.S. tobacco markets, and the gain of $11.2 million from the sale of the liquid packaging plant relate to the packaging segment. The fiscal year 1999 restructuring charge following the completion of the company's strategic review related to packaging, paper and chemicals was $57.7 million, $21.2 million and $1.6 million, respectively.
No single customer accounts for 10% or more of consolidated trade sales in the two months ended December 31, 2001 and in the fiscal years ended October 31, 2001, 2000 and 1999.
Total sales outside of the United States, including sales of the company's foreign operating subsidiaries, accounted for approximately $195.7 million for the transition period ended December 31, 2001 and $996.7 million, $816.8 million and $671.4 million for the fiscal years ended October 31, 2001, 2000 and 1999, respectively. Export sales from the United States amounted to $91.5 million for the transition period ended December 31, 2001 and $562.4 million, $590.8 million and $504.5 million for the fiscal years ended October 31, 2001, 2000 and 1999, respectively. Income of foreign subsidiaries included in consolidated net income amounted to $11.7 million for the transition period ended December 31, 2001 and $50.9 million, $49.2 million and $40.5 million for the fiscal years ended October 31, 2001, 2000 and 1999, respectively. Long-lived assets located outside the United States are $661.9 million at December 31, 2001 and $656.2 million and $518.3 million at October 31, 2001 and 2000, respectively. Long-lived assets located in the United States are $5,132.8 million at December 31, 2001, and $5,115.1 million and $4,988.0 million at October 31, 2001 and 2000, respectively.
NOTES TO FINANCIAL STATEMENTS
Financial information by business segment follows:
Sales ---------------------------------------- Depreciation Inter- Operating and Segment Capital (In millions) Trade segment Total profit amortization assets expenditures Transition period ended December 31, 2001 ------------------------------------------------------------------------------------------------------------------------------- Packaging $367.9 $0.3 $368.2 $ [8.7] $36.3 $3,796.8 $38.6 Rigesa 25.1 - 25.1 2.3 1.4 230.1 7.2 ------------------------------------------------------------------------------------------------------ Packaging total 393.0 0.3 393.3 [6.4] 37.7 4,026.9 45.8 ------------------------------------------------------------------------------------------------------ Paper 156.6 0.7 157.3 [2.8] 14.9 1,310.0 4.2 ------------------------------------------------------------------------------------------------------ Chemicals 47.0 3.0 50.0 4.4 3.9 294.2 2.0 ------------------------------------------------------------------------------------------------------ Corporate and other 6.1 4.8 10.9 [33.8] 4.2 1,197.2 4.2 ------------------------------------------------------------------------------------------------------ Total 602.7 8.8 611.5 [38.6] 60.7 6,828.3 56.2 ------------------------------------------------------------------------------------------------------ Intersegment eliminations [8.8] [8.8] ------------------------------------------------------------------------------------------------------ Consolidated totals $602.7 $ - $602.7 $[38.6] $60.7 $6,828.3 $56.2 ====================================================================================================== Year ended October 31, 2001 ------------------------------------------------------------------------------------------------------------------------------ Packaging $2,337.2 $ 2.3 $2,339.5 $165.0 $197.5 $3,812.7 $174.7 Rigesa 163.7 - 163.7 31.1 9.2 199.0 13.7 ------------------------------------------------------------------------------------------------------ Packaging total 2,500.9 2.3 2,503.2 196.1 206.7 4,011.7 188.4 ------------------------------------------------------------------------------------------------------ Paper 1,049.1 9.2 1,058.3 50.8 93.8 1,315.2 35.0 ------------------------------------------------------------------------------------------------------ Chemicals 327.8 20.0 347.8 62.9 20.6 298.6 14.4 ------------------------------------------------------------------------------------------------------ Corporate and other 57.7 30.4 88.1 [191.3] 26.3 1,161.5 58.6 ------------------------------------------------------------------------------------------------------ Total 3,935.5 61.9 3,997.4 118.5 347.4 6,787.0 296.4 ------------------------------------------------------------------------------------------------------ Intersegment eliminations [61.9] [61.9] ------------------------------------------------------------------------------------------------------ Consolidated totals $3,935.5 $ - $3,935.5 $118.5 $347.4 $6,787.0 $296.4 ====================================================================================================== Year ended October 31, 2000 -------------------------------------------------------------------------------------------------------------------------------- Packaging $2,085.3 $ 4.4 $2,089.7 $318.7 $161.9 $3,555.8 $104.6 Rigesa 174.9 - 174.9 32.5 10.8 285.1 13.6 ------------------------------------------------------------------------------------------------------ Packaging total 2,260.2 4.4 2,264.6 351.2 172.7 3,840.9 118.2 ------------------------------------------------------------------------------------------------------ Paper 1,205.6 20.2 1,225.8 140.6 96.7 1,383.7 39.7 ------------------------------------------------------------------------------------------------------ Chemicals 332.9 25.1 358.0 64.5 23.5 321.4 10.8 ------------------------------------------------------------------------------------------------------ Corporate and other 57.8 39.1 96.9 [152.7] 21.0 1,023.9 43.6 ------------------------------------------------------------------------------------------------------ Total 3,856.5 88.8 3,945.3 403.6 313.9 6,569.9 212.3 ------------------------------------------------------------------------------------------------------ Intersegment eliminations [88.8] [88.8] ------------------------------------------------------------------------------------------------------ Consolidated totals $3,856.5 $ - $3,856.5 $403.6 $313.9 $6,569.9 $212.3 ====================================================================================================== |
Year ended October 31, 1999 ------------------------------------------------------------------------------------------------------------------------------ Packaging $1,389.6 $ 4.0 $1,393.6 $ 165.3 $128.6 $2,043.5 $ 99.8 Rigesa 148.7 - 148.7 25.2 9.4 257.4 31.0 ------------------------------------------------------------------------------------------------------ Packaging total 1,538.3 4.0 1,542.3 190.5 138.0 2,300.9 130.8 ------------------------------------------------------------------------------------------------------ Paper 1,062.3 23.4 1,085.7 62.0 100.6 1,441.8 60.0 ------------------------------------------------------------------------------------------------------ Chemical 307.1 20.6 327.7 52.5 23.8 314.7 18.1 ------------------------------------------------------------------------------------------------------ Corporate and other 45.5 35.7 81.2 [157.0] 18.1 839.3 23.4 ------------------------------------------------------------------------------------------------------ Total 2,953.2 83.7 3,036.9 148.0 280.5 4,896.7 232.3 ------------------------------------------------------------------------------------------------------ Intersegment [83.7] [83.7] eliminations ------------------------------------------------------------------------------------------------------ Consolidated totals $2,953.2 $ - $2,953.2 $ 148.0 $280.5 $4,896.7 $232.3 ====================================================================================================== |
T. Guarantor and nonguarantor financial statements
Following the merger, (i) debt issued in the past by Westvaco has been
unconditionally guaranteed, on a joint and several basis, by both MeadWestvaco
and Mead, (ii) debt issued in the past by Mead has been unconditionally
guaranteed, on a joint and several basis, by both MeadWestvaco and Westvaco and
(iii) future debt issued by MeadWestvaco will be guaranteed by either or both of
Mead and/or Westvaco.
The company's debt as of December 31, 2001 subject to the guarantees referred to above includes: 6.85% Notes due 2004, 7.10% Notes due 2009, 8.40% Notes due 2007, Floating Rate Notes due 2003, 8.20% Debentures due 2030, 9.65% Debentures due 2002, 9.75% Debentures due 2020, 7.95% Debentures due 2031, 7.00% Sinking Fund Debentures due 2004-2023, 7.50% Sinking Fund Debentures due 2008-2027, 7.65% Sinking Fund Debentures due 2008-2027, 7.75% Sinking Fund Debentures due 2004-2023, 8.125% Sinking Fund Debentures due 2001-2007 and 8.30% Sinking Fund Debentures due 2003-2022 (see Note M).
In connection with its future financing and capital structure requirements, on March 8, 2002 MeadWestvaco filed a registration statement with the Securities and Exchange Commission on Form S-3, covering up to $1 billion in debt securities which the company may issue from time to time after the registration statement becomes effective. As described above, the debt securities of MeadWestvaco may be guaranteed on a full, unconditional and joint and several basis by either or both of Mead and Westvaco.
The following condensed consolidating financial information presents:
(1) condensed consolidating balance sheet as of December 31, 2001 and October 31, 2001 and 2000 and the related statements of income and cash flows for the transition period ended December 31, 2001 and each of the three years ended October 31, 2001 of (a) the company, issuer of existing debt and possible guarantor of future debt to be issued by MeadWestvaco, (b) the nonguarantor subsidiaries and (c) the company on a consolidated basis, and
(2) elimination entries necessary to consolidate the company with non-guarantor subsidiaries.
Investments in subsidiaries are accounted for by the company using the equity method of accounting. The guarantor and nonguarantor subsidiaries are each presented on a combined basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial
NOTES TO FINANCIAL STATEMENTS
statements for the nonguarantor subsidiaries are not presented because management believes such financial statements would not be meaningful to investors.
NOTES TO FINANCIAL STATEMENTS
Transition period ended December 31, 2001 Westvaco Non guarantor In millions (Issuer/Guarantor) (1) subsidiaries Eliminations Consolidated total Sales $448.0 $155.3 $ [0.6] $ 602.7 Other income [expense], net [4.0] 112.0 [110.3] [2.3] ------ ------ ------- ------- 444.0 267.3 [110.9] 600.4 ------ ------ ------- ------- Cost of products sold [excludes depreciation shown separately below] 385.0 208.0 [110.8] 482.2 Selling, research and administrative expenses 39.0 24.2 - 63.2 Depreciation and amortization 27.3 33.4 - 60.7 Interest expense 31.3 1.7 [0.1] 32.9 ------ ------ ------- ------- 482.6 267.3 [110.9] 639.0 ------ ------ ------- ------- Income [loss] before taxes [38.6] - - [38.6] Income taxes [benefit] [13.8] [3.1] - [16.9] ------ ------ ------- ------- Net income [loss] from continuing operations before equity in net earnings of subsidiaries [24.8] 3.1 - [21.7] Equity in earnings [loss] of subsidiaries 3.1 - [3.1] - ------ ------ ------- ------- Net income $[21.7] $ 3.1 $ [3.1] $ [21.7] ====== ====== ======= ======= Year ended October 31, 2001 Westvaco Non guarantor In millions (Issuer/Guarantor) (1) subsidiaries Eliminations Consolidated total Sales $3,154.3 $ 784.6 $ [3.4] $3,935.5 Other income [expense], net 38.3 817.8 [808.0] 48.1 -------- -------- ------- ------- 3,192.6 1,602.4 [811.4] 3,983.6 -------- -------- ------- ------- Cost of products sold [excludes depreciation shown separately below] 2,613.3 1,091.3 [810.7] 2,893.9 Selling, research and administrative expenses 240.9 123.5 - 364.4 Depreciation and amortization 169.0 178.4 - 347.4 Restructuring charges 33.8 17.9 - 51.7 Interest expense 199.6 8.8 [0.7] 207.7 -------- -------- ------- ------- 3,256.6 1,419.9 [811.4] 3,865.1 -------- -------- ------- ------- Income [loss] before taxes [64.0] 182.5 - 118.5 Income taxes [benefit] [35.4] 65.7 - 30.3 -------- -------- ------- ------- Net income [loss] from continuing operations before equity in net earnings of subsidiaries [28.6] 116.8 - 88.2 |
NOTES TO FINANCIAL STATEMENTS
Equity in earnings [loss] of subsidiaries 116.8 - [116.8] - ------ ------- ------- ----- Net income $ 88.2 $ 116.8 $[116.8] $88.2 ====== ======= ======= ===== |
NOTES TO FINANCIAL STATEMENTS
Year ended October 31, 2000 Westvaco Non guarantor Consolidated In millions (Issuer/Guarantor) (1) subsidiaries Eliminations total Sales $3,412.2 $ 447.5 $ [3.2] $3,856.5 Other income [expense], net 47.7 833.1 [823.8] 57.0 -------- -------- ------- -------- 3,459.9 1,280.6 [827.0] 3,913.5 -------- -------- ------- -------- Cost of products sold [excludes depreciation shown separately below] 2,753.8 778.1 [825.9] 2,706.0 Selling, research and administrative expenses 224.7 57.0 - 281.7 Depreciation and amortization 159.7 154.2 - 313.9 Restructuring charges 16.1 - - 16.1 Interest expense 184.2 9.1 [1.1] 192.2 -------- -------- ------- -------- 3,338.5 998.4 [827.0] 3,509.9 -------- -------- ------- -------- Income before taxes 121.4 282.2 - 403.6 Income taxes 51.1 97.8 - 148.9 -------- -------- ------- -------- Net income from continuing operations before equity in net earnings of subsidiaries 70.3 184.4 - 254.7 Equity in earnings [loss] of subsidiaries 184.4 - [184.4] - -------- -------- ------- -------- Income before extraordinary charge 254.7 184.4 [184.4] 254.7 Extraordinary charge - extinguishment of debt, net of taxes of $5 [8.8] - - [8.8] -------- -------- ------- -------- Net income $ 245.9 $ 184.4 $[184.4] $ 245.9 ======== ======== ======= ======== |
NOTES TO FINANCIAL STATEMENTS
Year ended October 31, 1999 Westvaco Non guarantor Consolidated In millions (Issuer/Guarantor) (1) subsidiaries Eliminations total Sales $2,763.9 $ 205.3 $ [16.0] $2,953.2 Other income [expense], net 32.6 [1.8] [1.4] 29.4 ------- ------ ------ ------- 2,796.5 203.5 [17.4] 2,982.6 ------- ------ ------ ------- Cost of products sold [excludes depreciation shown separately below] 2,014.0 122.9 [16.0] 2,120.9 Selling, research and administrative expenses 192.7 38.2 - 230.9 Depreciation and amortization 267.3 13.2 - 280.5 Restructuring charges 77.7 1.1 - 78.8 Interest expense 119.0 5.9 [1.4] 123.5 ------- ------ ------ ------- 2,670.7 181.3 [17.4] 2,834.6 ------- ------ ------ ------- Income before taxes 125.8 22.2 - 148.0 Income taxes 26.6 10.2 - 36.8 ------- ------ ------ ------- Net income from continuing operations before equity in net earnings of subsidiaries 99.2 12.0 - 111.2 Equity in earnings [loss] of subsidiaries 12.0 - [12.0] - ------- ------ ------ ------- Net income $ 111.2 $ 12.0 $ [12.0] $ 111.2 ======= ====== ======= ======= |
NOTES TO FINANCIAL STATEMENTS
At December 31, 2001 Westvaco Non guarantor Consolidated In millions (Issuer/Guarantor)(1) subsidiaries Eliminations total ASSETS Cash and marketable securities $ 35.6 $ 66.8 $ - $ 102.4 Receivables 267.4 128.2 - 395.6 Intercompany receivables 5.1 809.9 [815.0] - Inventories 319.0 115.6 - 434.6 Prepaid expenses and other current assets 79.6 21.4 - 101.0 -------- -------- --------- -------- Current assets 706.7 1,141.9 [815.0] 1,033.6 Plant and timberlands, net 1,885.8 2,350.1 - 4,235.9 Prepaid pension asset 798.3 1.8 - 800.1 Goodwill 499.7 61.2 - 560.9 Other assets 56.3 141.5 - 197.8 Intercompany long-term receivables 4.1 - [4.1] - Investment in subsidiaries 2,766.1 - [2,766.1] - -------- -------- --------- -------- Total assets $6,717.0 $3,696.5 $[3,585.2] $6,828.3 -------- -------- --------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $ 441.4 $ 102.5 $ - $ 543.9 Intercompany payables 809.9 5.1 [815.0] - Notes payable and current maturities of long-term obligations 103.2 63.4 - 166.6 Income taxes [0.3] 15.6 - 15.3 -------- -------- --------- -------- Current liabilities 1,354.2 186.6 [815.0] 725.8 Long-term debt 2,592.4 104.8 - 2,697.2 Intercompany long-term debt - 4.1 [4.1] - Other long-term obligations 73.9 9.1 - 83.0 Deferred income taxes 522.4 484.7 - 1,007.1 Shareholders' equity 2,174.1 2,907.2 [2,766.1] 2,315.2 -------- -------- --------- -------- Total liabilities and shareholders' equity $6,717.0 $3,696.5 $[3,585.2] $6,828.3 ======== ======== ========= ======== |
NOTES TO FINANCIAL STATEMENTS
At October 31, 2001 Non Westvaco guarantor Consolidated In millions (Issuer/Guarantor)(1) subsidiaries Eliminations total ASSETS Cash and marketable securities $ 11.7 $ 69.5 $ - $ 81.2 Receivables 285.9 128.8 - 414.7 Intercompany receivables - 837.5 [837.5] - Inventories 309.4 117.0 - 426.4 Prepaid expenses and other current assets 67.7 25.7 - 93.4 -------- -------- --------- -------- Current assets 674.7 1,178.5 [837.5] 1,015.7 Plant and timberlands, net 1,943.4 2,283.9 - 4,227.3 Prepaid pension asset 778.0 1.4 - 779.4 Goodwill 502.4 62.8 - 565.2 Other assets 158.0 41.4 - 199.4 Intercompany long-term receivables 4.1 - [4.1] - Investment in subsidiaries 2,680.4 - [2,680.4] - -------- -------- --------- -------- Total assets $6,741.0 $3,568.0 $[3,522.0] $6,787.0 ======== ======== ========= ======== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $ 394.7 $116.9 $ - $ 511.6 Intercompany payables 837.5 - [837.5] - Notes payable and current maturities of long-term obligations 103.2 69.7 - 172.9 Income taxes [16.1] 32.6 - 16.5 -------- -------- --------- -------- Current liabilities 1,319.3 219.2 [837.5] 701.0 Long-term debt 2,553.4 107.1 - 2,660.5 Intercompany long-term debt - 4.1 [4.1] - Other long-term obligations 73.1 3.7 - 76.8 Deferred income taxes 582.0 425.8 - 1,007.8 Shareholders' equity 2,213.2 2,808.1 [2,680.4] 2,340.9 -------- -------- --------- -------- Total liabilities and shareholders' equity $6,741.0 $3,568.0 $[3,522.0] $6,787.0 ======== ======== ========= ======== |
NOTES TO FINANCIAL STATEMENTS
At October 31, 2000 Non Westvaco guarantor Consolidated In millions (Issuer/Guarantor) (1) subsidiaries Eliminations total ASSETS Cash and marketable securities $ 120.2 $ 105.1 $ - $ 225.3 Receivables 315.2 106.5 - 421.7 Intercompany receivables 4.6 667.7 [672.3] - Inventories 241.8 91.5 - 333.3 Prepaid expenses and other current assets 63.5 19.9 - 83.4 -------- -------- --------- -------- Current assets 745.3 990.7 [672.3] 1,063.7 Plant and timberlands, net 1,905.7 2,290.9 - 4,196.6 Prepaid pension asset 640.1 1.6 - 641.7 Goodwill 562.9 43.3 - 606.2 Other assets 41.6 20.1 - 61.7 Intercompany long-term receivables 6.1 - [6.1] - Investment in subsidiaries 2,505.1 - [2,505.1] - -------- -------- --------- -------- Total assets $6,406.8 $3,346.6 $[3,183.5] $6,569.9 ======== ======== ========= ======== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $ 421.1 $ 102.1 $ - $ 523.2 Intercompany payables 667.7 4.6 [672.3] - Notes payable and current maturities of long-term obligations 7.1 23.0 - 30.1 Income taxes [46.9] 60.5 - 13.6 -------- -------- --------- -------- Current liabilities 1,049.0 190.2 [672.3] 566.9 Long-term debt 2,604.6 82.1 - 2,686.7 Intercompany long-term debt - 6.1 [6.1] - Other long-term obligations 75.9 0.1 - 76.0 Deferred income taxes 512.5 395.2 - 907.7 Shareholders' equity 2,164.8 2,672.9 [2,505.1] 2,332.6 -------- -------- --------- -------- Total liabilities and shareholders' equity $6,406.8 $3,346.6 $[3,183.5] $6,569.9 ======== ======== ========= ======== |
NOTES TO FINANCIAL STATEMENTS
Transition period ended December 31, 2001 Westvaco Non guarantor Consolidated In millions (Issuer/Guarantor) (1) (2) subsidiaries (2) Eliminations total CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ [21.7] $3.1 $ [3.1] $[21.7] Adjustments to reconcile net income to net cash provided by operating activities: Equity in [income] loss of subsidiaries [3.1] - 3.1 - Provision for depreciation and amortization 27.3 33.4 60.7 Provision for deferred income taxes [6.5] 1.7 [4.8] Pension credit and other employee benefits [18.2] 3.2 [15.0] Gains on sales of plant and timberlands 2.9 0.6 3.5 Foreign currency transaction losses 0.2 [0.6] [0.4] Net changes in assets and liabilities: [Increase] decrease in receivables 18.5 4.0 22.5 [Increase] decrease in intercompany receivables [5.1] 23.2 [18.1] - [Increase] decrease in inventories [9.1] 2.7 [6.4] [Increase] decrease in prepaid expenses and other current assets [9.3] 4.5 [4.8] Increase [decrease] in accounts payable and accrued expenses 30.5 [25.0] 5.5 Increase [decrease] in intercompany payables [23.2] 5.1 18.1 - Increase [decrease] in income taxes payable 15.8 [17.8] [2.0] [Increase] decrease in other assets [1.7] - [1.7] Other, net [2.8] 1.5 - [1.3] ------ ----- ----- ----- Net cash provided by operating activities [5.5] 39.6 34.1 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and timberlands [11.5] [42.6] [54.1] Proceeds from sales of assets 0.6 - 0.6 Other - [0.2] [0.2] ------ ----- ----- Net cash used in investing activities [10.9] [42.8] [53.7] CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 3.3 - 3.3 Proceeds from issuance of debt 75.0 4.9 79.9 Intercompany dividends 1.3 [1.3] - Dividends paid Treasury stock purchases Repayment of notes payable and long-term debt [39.3] [3.1] [42.4] ------ ----- ----- Net cash provided by financing activities 40.3 0.5 40.8 Effect of exchange rate changes on cash - - - - ------ ----- ----- ----- |
NOTES TO FINANCIAL STATEMENTS
Increase [decrease] in cash and marketable securities 23.9 [2.7] 21.2 Cash and marketable securities: At beginning of period 11.7 69.5 - 81.2 ----- ----- ------- ------ At end of period $35.6 $66.8 $ $102.4 ===== ===== ======= ====== |
Year ended October 31, 2001 Westvaco Non guarantor Consolidated In millions (Issuer/Guarantor)(1) (2) subsidiaries (2) Eliminations total CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 88.2 $ 116.8 $[116.8] $ 88.2 Adjustments to reconcile net income to net cash provided by operating activities: Equity in [income] loss of subsidiaries [116.8] - 116.8 - Provision for depreciation and amortization 169.0 178.4 - 347.4 Provision for deferred income taxes 12.5 31.1 - 43.6 Restructuring charges 33.8 17.9 - 51.7 Pension credit and other employee benefits [139.9] 8.7 - [131.2] Gains on sales of plant and timberlands [37.7] - - [37.7] Foreign currency transaction losses 0.6 0.6 - 1.2 Net changes in assets and liabilities: [Increase] decrease in receivables 41.2 [18.4] - 22.8 [Increase] decrease in intercompany receivables 4.6 [112.1] 107.5 - [Increase] decrease in inventories [45.6] [21.0] - [66.6] [Increase] decrease in prepaid expenses and other current assets 1.4 [7.2] - [5.8] Increase [decrease] in accounts payable and accrued expenses [83.2] 36.5 - [46.7] Increase [decrease] in intercompany payables 112.1 [4.6] [107.5] - Increase [decrease] in income taxes payable 30.8 [27.2] - 3.6 [Increase] decrease in other assets [15.7] - - [15.7] Other, net [34.5] 32.3 - [2.2] ----- ----- ------- ------ Net cash provided by operating activities 20.8 231.8 - 252.6 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and timberlands [119.7] [170.7] - [290.4] Payments for acquisitions, net of cash acquired [12.6] [68.6] - [81.2] Proceeds from sales of assets 45.6 2.6 - 48.2 Other - [0.2] - [0.2] ----- ----- ------- ------ Net cash used in investing activities [86.7] [236.9] - [323.6] CASH FLOWS FROM FINANCING ACTIVITIES: |
NOTES TO FINANCIAL STATEMENTS
Proceeds from issuance of common stock 6.3 - 6.3 Proceeds from issuance of debt 1,102.3 23.0 - 1,125.3 Intercompany debt 2.0 [2.0] - - Intercompany dividends 1.3 [1.3] - - Dividends paid [89.3] - - [89.3] Treasury stock purchases [1.6] - - [1.6] Repayment of notes payable and long-term debt [1,063.6] [40.0] - [1,103.6] ----- ----- ---- ------ Net cash used in financing activities [42.6] [20.3] - [62.9] Effect of exchange rate changes on cash - [10.2] - [10.2] ----- ----- ---- ------ Decrease in cash and marketable securities [108.5] [35.6] - [144.1] Cash and marketable securities: At beginning of period 120.2 105.1 - 225.3 ----- ----- ---- ------ At end of period $ 11.7 $ 69.5 $ - $ 81.2 ===== ===== ==== ====== |
Year ended October 31, 2000 Westvaco Non guarantor Consolidated In millions (Issuer/Guarantor)(1) (2) subsidiaries (2) Eliminations total CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 245.9 $ 184.4 $[184.4] $245.9 Adjustments to reconcile net income to net cash provided by operating activities: Equity in [income] loss of subsidiaries [184.4] - 184.4 - Provision for depreciation and amortization 159.7 154.2 - 313.9 Provision for deferred income taxes [283.1] 378.0 - 94.9 Restructuring charges 16.1 - - 16.1 Pension credit and other employee benefits [98.6] 5.7 - [92.9] Gains on sales of plant and timberlands [23.9] [2.9] - [26.8] Foreign currency transaction losses 0.3 0.6 - 0.9 Loss on extinguishment of debt, net of taxes 8.8 - - 8.8 Net changes in assets and liabilities: [Increase] decrease in receivables [25.9] 10.3 [15.6] [Increase] decrease in intercompany receivables [4.6] [458.1] 462.7 - [Increase] decrease in inventories [29.3] 28.5 - [0.8] [Increase] decrease in prepaid expenses and other current assets 5.3 [3.4] - 1.9 Increase [decrease] in accounts payable and accrued expenses 96.2 [57.2] - 39.0 |
NOTES TO FINANCIAL STATEMENTS
Increase [decrease] in intercompany payables 458.1 4.6 [462.7] - Increase [decrease] in income taxes payable [55.9] 56.7 - 0.8 Other, net [18.8] 15.8 - [3.0] ------- ------- ----- ------- Net cash provided by operating activities 265.9 317.2 - 583.1 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and timberlands [102.5] [111.5] - [214.0] Payments for acquisitions, net of cash acquired [1,284.3] [58.5] - [1,342.8] Proceeds from sales of assets 78.6 3.0 - 81.6 Other - 0.2 - 0.2 ------- ------- ----- ------- Net cash used in investing activities [1,308.2] [166.8] - [1,475.0] CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 9.3 - - 9.3 Proceeds from issuance of debt 2,600.1 11.4 - 2,611.5 Intercompany debt 10.0 [10.0] - - Intercompany dividends 3.8 [3.8] - - Dividends paid [88.5] - - [88.5] Treasury stock purchases [2.4] - - [2.4] Repayment of notes payable and long-term debt [1,398.8] [124.9] - [1,523.7] ------- ------- ----- ------- Net cash provided by [used in] financing activities 1,133.5 [127.3] - 1,006.2 Effect of exchange rate changes on cash - 2.2 - 2.2 ------- ------- ----- ------- Increase in cash and marketable securities 91.2 25.3 - 116.5 Cash and marketable securities: At beginning of period 29.0 79.8 - 108.8 ------- ------- ----- ------- At end of period $ 120.2 $ 105.1 $ - $ 225.3 ======= ======= ===== ======= Year ended October 31, 1999 Westvaco (Issuer/Guarantor) Non guarantor Consolidated In millions (2) subsidiaries (2) Eliminations total CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 111.2 $ 12.0 $ [12.0] $ 111.2 Adjustments to reconcile net income to net cash provided by operating activities: Equity in [income] loss of subsidiaries [12.0] - 12.0 - Provision for depreciation and amortization 267.3 13.2 - 280.5 Provision for deferred income taxes 27.9 4.4 - 32.3 Restructuring charges 77.7 1.1 - 78.8 Pension credit and other employee benefits [84.4] 5.7 - [78.7] |
NOTES TO FINANCIAL STATEMENTS
Gains on sales of plant and timberlands [19.0] 1.1 - [17.9] Foreign currency transaction losses 0.3 3.3 - 3.6 Net changes in assets and liabilities [Increase] decrease in receivables [37.5] [3.6] - [41.1] [Increase] decrease in intercompany receivables 42.2 42.5 [84.7] - [Increase] decrease in inventories 24.8 [0.3] - 24.5 Increase [decrease] in prepaid expenses and other current assets [0.8] [0.3] - [1.1] Increase [decrease] in accounts payable and accrued expenses 15.0 9.8 - 24.8 Increase [decrease] in intercompany payables [42.5] [42.2] 84.7 - Increase [decrease] in income taxes payable [4.8] [4.9] - [9.7] Other, net 1.6 3.9 - 5.5 ------- ------- ---- ------- Net cash provided by operating activities 367.0 45.7 - 412.7 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and timberlands [193.4] [35.5] - [228.9] Payments for acquisitions, net of cash acquired - [22.7] - [22.7] Proceeds from sales of assets 22.4 0.4 - 22.8 Other - [1.1] - [1.1] ------- ------- ---- ------- Net cash used in investing activities [171.0] [58.9] - [229.9] CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 9.1 - - 9.1 Proceeds from issuance of debt 860.0 21.5 - 881.5 Intercompany debt [10.1] 10.1 - - Intercompany dividends 6.0 [6.0] - - Dividends paid [88.2] - - [88.2] Treasury stock purchases [10.8] - - [10.8] Repayment of notes payable and long-term debt [948.1] [4.1] - [952.2] ------- ------- ---- ------- Net cash provided by [used in] financing activities [182.1] 21.5 - [160.6] Effect of exchange rate changes on cash - [18.5] - [18.5] ------- ------- ---- ------- Increase [decrease] in cash and marketable securities 13.9 [10.2] - 3.7 Cash and marketable securities: At beginning of period 15.1 90.0 - 105.1 ------- ------- ---- ------- At end of period $ 29.0 $ 79.8 $ - $ 108.8 ======= ======= ==== ======= |
NOTES TO FINANCIAL STATEMENTS
(1) The company is the issuer of previously issued debt securities and potential guarantor of debt that may be issued in the future by MeadWestvaco, the Parent.
(2) Certain intercompany transactions for contract manufacturing between the company and the non-guarantor subsidiaries are non-cash transactions; therefore, the effects of such are not reflected in the statements of cash flows.
U. Fiscal year change
Effective January 29, 2002, Westvaco changed its fiscal year end from October 31 to December 31. Accordingly, the consolidated financial statements include the results of operations for the transition period, which are not necessarily indicative of operations for a full year.
Results for the 2001 transition period and comparable prior year period are summarized below.
In millions, except per share data Two months ended December 31, ---------------------------------- ----------------------------- 2001 2000 ------ ------ Unaudited Sales $602.7 $631.3 Operating income [loss] [38.6] 41.2 Income tax provision [benefit] [16.9] 15.2 Net income [loss] [21.7] 26.0 Net income [loss] per share - basic and diluted $[0.21] $ 0.26 |
Earnings for the two months ended December 31, 2001 reflects a $17.0 million charge, or $.10 per share for the writedowns of plant and equipment taken out of service, writedowns of inventories due to lower of cost or market evaluations, increased costs associated with the acceleration of maintenance to coincide with market-related downtime and other items principally relating to employee benefits and receivables. Of the $17.0 million charge, $11.0 million is included in Cost of products sold, $4.0 million is included in Other income [expense], net and $2.0 million is included in Selling, research and administrative expenses.
V. Selected quarterly information [unaudited]
In millions, except per share data ---------------------------------- Fiscal Year Ended October 31, ---------------------------------------- Quarter 2001/1/ 2000/2/ 1999/3/ ------- ---- ---- ---- Sales First $ 971.1 $ 841.9 $ 685.7 Second 966.9 955.2 715.7 Third 995.1 977.8 738.4 Fourth 1,002.4 1,081.6 813.4 -------- -------- -------- Year $3,935.5 $3,856.5 $2,953.2 ======== ======== ======== Gross profit |
NOTES TO FINANCIAL STATEMENTS
First $ 185.1 $ 175.4 $ 119.2 Second 168.6 211.3 127.1 Third 174.7 216.5 139.5 Fourth 182.9 244.7 176.9 ------- --------- --------- Year $ 711.3 $ 847.9 $ 562.7 ======= ========= ========= Net income before extraordinary charge First $ 33.3 $ 50.2 $ 25.2 Second 18.5 70.2 27.3 Third 28.0 53.6 35.0 Fourth 8.4 80.7 23.7 ------- --------- --------- Year $ 88.2 $ 254.7 $ 111.2 ======= ========= ========= Net income First $ 33.3 $ 50.2 $ 25.2 Second 18.5 61.4 27.3 Third 28.0 53.6 35.0 Fourth 8.4 80.7 23.7 ------- --------- --------- Year $ 88.2 $ 245.9 $ 111.2 ======= ========= ========= Net income before extraordinary charge per common share--basic and diluted First $ .33 $ .50 $ .25 Second .18 .70 .27 Third .28 .53 .35 Fourth .08 .80 .24 ------- --------- --------- Year $ .87 $ 2.53 $ 1.11 ======= ========= ========= |
NOTES TO FINANCIAL STATEMENTS
Net income
per common share - basic and diluted
First $ .33 $ .50 $ .25 Second .18 .61 .27 Third .28 .53 .35 Fourth .08 .80 .24 ----- ----- ----- Year $ .87 $2.44 $1.11 ===== ===== ===== |
1) Second quarter 2001 results include a net pretax charge of $1.6 million, or $.01 per share, as a result of restructuring. Third quarter 2001 results include a pretax charge of $1.6 million, or $.01 per share, as the result of restructuring and a gain of $.05 per share to reflect a tax benefit adjustment. Fourth quarter 2001 results include a pretax charge of $53.7 million or $.33 per share for a restructuring plan, the impact of a LIFO (last in-first out) credit of $.07 per share and a gain of $.05 per share resulting from the resolution of prior year tax audits.
2) Results for the 2000 second quarter include an extraordinary charge of $8.8 million after tax, or $.09 per share, from the retirement of higher coupon debt and a pretax gain of $11.2 million, or $.07 per share from the sale of a liquid packaging plant previously written down as part of the 1999 restructuring charge. Third quarter 2000 results include a pretax charge of $24.3 million, or $.16 per share, as a result of restructuring. Fourth quarter 2000 results include a pretax charge of $3.0 million, or $.02 per share, for restructuring and a pretax gain of $3.6 million, or $.04 per share, resulting from the sale of the company's equity interest in a foreign operation. Fourth quarter results also include a pretax LIFO provision of $9.0 million, or $.06 per share.
3) Results for the 1999 fourth quarter include a pretax charge of $80.5 million, or $.49 per share, as a result of restructuring, and a $15.0 million tax benefit, or $.15 per share, resulting from a release of deferred taxes.
RESPONSIBILITY FOR FINANCIAL STATEMENTS
Management is responsible for the information and representations in the accompanying consolidated financial statements and related notes as well as all other financial information contained in this report. These financial statements were prepared in accordance with accounting principles generally accepted in the United States of America and by necessity include some amounts determined using informed estimates and judgments.
Management is responsible for establishing and maintaining a system of internal control. The company's accounting systems include internal controls which management believes provide reasonable assurance of the reliability of its financial records and the proper safeguarding and use of its assets. In establishing the basis for reasonable assurance, management balances the cost of the internal controls with the benefits they provide. Additionally, it has long been the policy of the company to conduct its business affairs in accordance with high ethical standards, as set forth in the company's Code of Conduct.
PricewaterhouseCoopers LLP, the company's independent accountants, were engaged to audit the consolidated financial statements and were responsible for conducting their audit in accordance with auditing standards generally accepted in the United States of America. The appointment of PricewaterhouseCoopers LLP as the company's independent accountants by the Board of Directors, on the recommendation of the Audit Committee, has been ratified each year by the shareholders. Their report immediately follows this statement.
The Audit Committee of the Board of Directors, composed solely of nonmanagement directors, meets regularly with the company's management, the internal audit director and the independent accountants to discuss accounting and financial reporting matters and the nature, scope and results of audits. The Audit Committee meets with the independent accountants both with and without the presence of management. The committee also meets with the company's general counsel to review the company's legal compliance program as well as significant litigation issues. The independent accountants and the director of internal audit have full and free access to the Audit Committee.
John A. Luke, Jr.
President and
Chief Executive Officer
Karen R. Osar
Senior Vice President and Chief Financial Officer
February 15, 2002
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of
MeadWestvaco Corporation
In our opinion, the accompanying consolidated balance sheets and related consolidated statements of income, shareholders' equity and of cash flows appearing on pages 21 through 52 present fairly, in all material respects, the financial position of MeadWestvaco Corporation (formerly Westvaco Corporation) and its subsidiaries at December 31, 2001 and October 31, 2001 and 2000 and the results of their operations and their cash flows for the two months in the period ended December 31, 2001 and for each of the three years in the period ended October 31, 2001, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 15, 2002
Exhibit 21
SUBSIDIARIES OF THE REGISTRANT *
* The names of additional subsidiaries have been omitted because the unnamed subsidiaries, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary. Subsidiaries which are consolidated into the above-listed subsidiaries are also omitted.
Exhibit No.23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-81634, 333-81636, 333-81638, 333-61640, and 333-81642) of MeadWestvaco Corporation and on Form S-3 (Nos. 333-51423 and 333- 84060) of Meadwestvaco Corporation (formerly Westvaco Corporation) of our report dated February 15, 2002 relating to the consolidated financial statements, which appears in the 2001 Financial Report to Shareholders, which is incorporated in this Transition Period Report on Form 10-K.
PricewaterhouseCoopers LLP
New York, New York
March 15, 2002