Document:

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                                                                    EXHIBIT 4(o)
                                                                    ------------

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                          GEORGIA-PACIFIC CORPORATION

                                      and

                      THE FIRST NATIONAL BANK OF CHICAGO,
                          as Purchase Contract Agent

                            ----------------------

                          PURCHASE CONTRACT AGREEMENT

                           Dated as of July 7, 1999

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                               TABLE OF CONTENTS

                                                                         Page

RECITALS...............................................................   1

       ARTICLE I Definitions and Other Provisions of General Applications

Section 1.1.     Definitions...........................................   1
Section 1.2.     Compliance Certificates and Opinions..................  11
Section 1.3.     Form of Documents Delivered to Purchase Contract Agent  12
Section 1.4.     Acts of Holders; Record Dates.........................  12
Section 1.5.     Notices...............................................  14
Section 1.6.     Notice to Holders; Waiver.............................  15
Section 1.7.     Effect of Headings and Table of Contents..............  15
Section 1.8.     Successors and Assigns................................  15
Section 1.9.     Separability Clause...................................  15
Section 1.10.    Benefits of Agreement.................................  15
Section 1.11.    Governing Law.........................................  16
Section 1.12.    Legal Holidays........................................  16
Section 1.13.    Counterparts..........................................  16
Section 1.14.    Inspection of Agreement...............................  16

                         ARTICLE II Certificate Forms

Section 2.1.     Forms of Certificates Generally.......................  16
Section 2.2.     Form of Purchase Contract Agent's Certificate of
                 Authentication........................................  18

                          ARTICLE III The Securities

Section 3.1.     Amount; Form and Denominations........................  18
Section 3.2.     Rights and Obligations Evidenced by the Certificates..  18
Section 3.3.     Execution, Authentication, Delivery and Dating........  19
Section 3.4.     Temporary Certificates................................  20
Section 3.5.     Registration; Registration of Transfer and Exchange...  20
Section 3.6.     Book-Entry Interests..................................  22
Section 3.7.     Notices to Holders....................................  22
Section 3.8.     Appointment of Successor Clearing Agency..............  22
Section 3.9.     Definitive Certificates...............................  22
Section 3.10.    Mutilated, Destroyed, Lost and Stolen Certificates....  23

                                      -i-
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Section 3.11.    Persons Deemed Owners.................................  24
Section 3.12.    Cancellation..........................................  24
Section 3.13.    Creation of Treasury PEPS Units by Substitution of
                 Treasury Securities...................................  25
Section 3.14.    Reestablishment of PEPS Units.........................  26
Section 3.15.    Transfer of Collateral upon Occurrence of
                 Termination Event.....................................  27
Section 3.16.    No Consent to Assumption..............................  28

                    ARTICLE IV The Senior Deferrable Notes

Section 4.1.     Interest Payments; Rights to Interest Payments
                 Preserved.............................................  28
Section 4.2      Deferral of Interest Payments.........................  29
Section 4.3.     Interest Rate Reset; Notice Relating to Cash
                 Settlement............................................  29
Section 4.4.     Notice and Voting.....................................  30

                       ARTICLE V The Purchase Contracts

Section 5.1.     Purchase of Shares of Georgia-Pacific Group Stock.....  30
Section 5.2.     Purchase Contract Payments............................  33
Section 5.3.     Deferral of Purchase Contract Payments................  33
Section 5.4.     Payment of Purchase Price.............................  34
Section 5.5.     Issuance of Shares of Georgia-Pacific Group Stock.....  37
Section 5.6.     Adjustment of Settlement Rate.........................  38
Section 5.7.     Notice of Adjustments and Certain Other Events........  45
Section 5.8.     Termination Event; Notice.............................  45
Section 5.9.     Early Settlement......................................  46
Section 5.10.    Acceleration of Purchase Contract Settlement Date.....  48
Section 5.11.    No Fractional Shares..................................  51
Section 5.12.    Charges and Taxes.....................................  51

                              ARTICLE VI Remedies

Section 6.1.     Unconditional Right of Holders to Receive
                 Purchase Contract Payments and to Purchase
                 Shares of Georgia-Pacific Group Stock.................  51
Section 6.2.     Restoration of Rights and Remedies....................  52
Section 6.3.     Rights and Remedies Cumulative........................  52
Section 6.4.     Delay or Omission Not Waiver..........................  52
Section 6.5.     Undertaking for Costs.................................  52
Section 6.6.     Waiver of Stay or Extension Laws......................  53

                    ARTICLE VII The Purchase Contract Agent
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Section 7.1.     Certain Duties and Responsibilities..................  53
Section 7.2.     Notice of Default....................................  54
Section 7.3.     Certain Rights of Purchase Contract Agent............  54
Section 7.4.     Not Responsible for Recitals or Issuance of
                 Securities...........................................  55
Section 7.5.     May Hold Securities..................................  55
Section 7.6.     Money Held in Custody................................  55
Section 7.7.     Compensation and Reimbursement.......................  56
Section 7.8.     Corporate Purchase Contract Agent Required;
                 Eligibility..........................................  56
Section 7.9.     Resignation and Removal; Appointment of
                 Successor............................................  57
Section 7.10.    Acceptance of Appointment by Successor...............  58
Section 7.11.    Merger, Conversion, Consolidation or
                 Succession to Business...............................  58
Section 7.12.    Preservation of Information; Communications to
                 Holders..............................................  59
Section 7.13.    No Obligations of Purchase Contract Agent............  59
Section 7.14.    Tax Compliance.......................................  59

                     ARTICLE VIII Supplemental Agreements

Section 8.1.     Supplemental Agreements Without Consent of Holders...  60
Section 8.2.     Supplemental Agreements With Consent of Holders......  61
Section 8.3.     Execution of Supplemental Agreements.................  62
Section 8.4.     Effect of Supplemental Agreements....................  62
Section 8.5.     Reference to Supplemental Agreements.................  62

     ARTICLE IX Merger, Consolidation, Share exchange, Sale or Conveyance

Section 9.1.     Covenant Not to Merge, Consolidate, Enter into
                 a Share Exchange, Sell or Convey Property
                 Except Under Certain Conditions......................  62
Section 9.2.     Rights and Duties of Successor Corporation...........  63
Section 9.3.     Officers' Certificate and Opinion of Counsel
                 Given to Purchase Contract Agent.....................  63

                              ARTICLE X Covenants

Section 10.1.    Performance Under Purchase Contracts.................  64
Section 10.2.    Maintenance of Office or Agency......................  64
Section 10.3.    Company to Reserve Georgia-Pacific Group Stock.......  64
Section 10.4.    Covenants as to Georgia-Pacific Group Stock..........  65
Section 10.5.    Statements of Officers of the Company as to Default..  65
Section 10.6.    ERISA................................................  65

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                                 EXHIBITS

EXHIBIT A        Form of PEPS Units Certificate
EXHIBIT B        Form of Treasury PEPS Units Certificate
EXHIBIT C        Instruction to Purchase Contract Agent
EXHIBIT D        Notice from Purchase Contract Agent to Holders (Transfer of
                 Collateral upon Occurrence of a Termination Event)
EXHIBIT E        Notice to Settle by Cash
EXHIBIT F        Notice from Purchase Contract Agent to Collateral Agent and
                 Senior Trustee (Settlement of Purchase Contract through
                 Remarketing)

                                     -iv-
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     PURCHASE CONTRACT AGREEMENT, dated as of July 7, 1999, between GEORGIA-
PACIFIC CORPORATION, a Georgia corporation (the "Company"), and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, acting as purchase
contract agent for the Holders of Securities from time to time (the "Purchase
Contract Agent").

                                 RECITALS

     The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.

     All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Purchase Contract Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.

     For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed as follows:

                                 ARTICLE I

                       Definitions and Other Provisions
                            of General Applications

Section I.1.  Definitions.

     For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

     (a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular, and nouns and
pronouns of the masculine gender include the feminine and neuter genders;

     (b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;

     (c) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section, Exhibit or other subdivision;

     (d) the following terms have the meanings given to them in this Section
1.1(d):

         "Act" has the meaning, with respect to any Holder, set forth in
          Section 1.4.
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         "Affiliate" of any specified Person means any other Person directly or
     indirectly controlling or controlled by or under direct or indirect common
     control with such specified Person.  For the purposes of this definition,
     "control" when used with respect to any specified Person means the power to
     direct the management and policies of such Person, directly or indirectly,
     whether through the ownership of voting securities, by contract or
     otherwise; and the terms "controlling" and "controlled" have meanings
     correlative to the foregoing.

         "Agreement" means this instrument as originally executed or as it may
     from time to time be supplemented or amended by one or more agreements
     supplemental hereto entered into pursuant to the applicable provisions
     hereof.

         "Applicable Market Value" has the meaning set forth in Section 5.1.

         "applicants" has the meaning set forth in Section 7.12(b).

         "Bankruptcy Code" means title 11 of the United States Code, or any
     other law of the United States that from time to time provides a uniform
     system of bankruptcy laws.

         "Beneficial Owner" means, with respect to a Global Certificate, a
     Person who is the beneficial owner of such Book-Entry Interest as reflected
     on the books of the Clearing Agency or on the books of a Person maintaining
     an account with such Clearing Agency (directly as a Clearing Agency
     Participant or as an indirect participant, in each case in accordance with
     the rules of such Clearing Agency).

         "Board of Directors" means the board of directors of the Company or a
     duly authorized committee of that board.

         "Board Resolution" means one or more resolutions of the Board of
     Directors, a copy of which has been certified by the Secretary or an
     Assistant Secretary of the Company, to have been duly adopted by the Board
     of Directors and to be in full force and effect on the date of such
     certification and delivered to the Purchase Contract Agent.

         "Book-Entry Interest" means a beneficial interest in a Global
     Certificate, ownership and transfers of which shall be maintained and made
     through book entries by a Clearing Agency as described in Section 3.6.

         "Business Day" means any day other than a Saturday or Sunday or a day
     on which banking institutions in New York City are authorized or required
     by law or executive order to remain closed or a day on which the Senior
     Trustee is closed for business; provided that for purposes of the second
     paragraph of Section 1.12 only, the term "Business Day" shall also be
     deemed to exclude any day on which trading on the New York Stock Exchange,
     Inc. is closed or suspended.

         "Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
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         "Certificate" means a PEPS Units Certificate or a Treasury PEPS Units
     Certificate.

         "Clearing Agency" means an organization registered as a "Clearing
     Agency" pursuant to Section 17A of the Exchange Act that is acting as a
     depositary for the Securities and in whose name, or in the name of a
     nominee of that organization, shall be registered a Global Certificate and
     which shall undertake to effect book entry transfers and pledges of the
     Securities.

         "Clearing Agency Participant" means a broker, dealer, bank, other
     financial institution or other Person for whom from time to time the
     Clearing Agency effects book entry transfers and pledges of securities
     deposited with the Clearing Agency.

         "Closing Price" has the meaning set forth in Section 5.1.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Collateral" has the meaning set forth in Section 1 of the Pledge
     Agreement.

         "Collateral Account" has the meaning set forth in Section 1 of the
     Pledge Agreement.

         "Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
     under the Pledge Agreement until a successor Collateral Agent shall have
     become such pursuant to the applicable provisions of the Pledge Agreement,
     and thereafter "Collateral Agent" shall mean the Person who is then the
     Collateral Agent thereunder.

         "Collateral Substitution" has the meaning set forth in Section 3.13.

         "Common Stock" means the Georgia-Pacific Group Stock and the Georgia-
     Pacific Corporation--Timber Group Common Stock, par value $.80 per share,
     of the Company.

         "Company" means the Person named as the "Company" in the first
     paragraph of this instrument until a successor shall have become such
     pursuant to the applicable provision of this Agreement, and thereafter
     "Company" shall mean such successor.

         "Constituent Person" has the meaning set forth in Section 5.6(b).

         "Convertible Securities" has the meaning set forth in Section F of
     Article V of the Restated Articles of Incorporation of the Company.

         "Corporate Trust Office" means the principal corporate trust office of
     the Purchase Contract Agent at which, at any particular time, its corporate
     trust business shall

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     be administered, which office at the date hereof is located at The First
     National Bank of Chicago, One First National Plaza, Suite 0126, Chicago,
     Illinois 60670-0126, Attention: Global Corporate Trust Services.

         "Coupon Rate" means the percentage rate per annum at which each Senior
     Deferrable Note will bear interest initially.

         "Current Market Price" has the meaning set forth in Section 5.6(a)(8).

         "Depositary" means DTC until another Clearing Agency becomes its
     successor.

         "Disposition" has the meaning set forth in Section 5.10(a)(i).

         "DTC" means The Depository Trust Company, the initial Clearing Agency.

         "Early Settlement" has the meaning set forth in Section 5.9(a).

         "Early Settlement Amount" has the meaning set forth in Section 5.9(a).

         "Early Settlement Date" has the meaning set forth in Section 5.9(a).

         "Early Settlement Rate" has the meaning set forth in Section 5.9(b).

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
     amended.

         "Exchange Act" means the Securities Exchange Act of 1934 and any
     statute successor thereto, in each case as amended from time to time, and
     the rules and regulations promulgated thereunder.

         "Expiration Date" has the meaning set forth in Section 1.4(e).

         "Expiration Time" has the meaning set forth in Section 5.6(a)(6).

         "Extension Period" has the meaning set forth in Section 4.2.

         "Failed Remarketing" has the meaning set forth in Section 5.4(b).

         "Fair Value" has the meaning set forth in Section F of Article V of
     the Restated Articles of Incorporation of the Company.

         "Georgia-Pacific Group Stock" means the Georgia-Pacific Corporation--
     Georgia-Pacific Group Common Stock, par value $.80 per share, of the
     Company.

         "Georgia-Pacific Group Subsidiaries" has the meaning set forth in
     Section 5.10(b).

                                       4
<PAGE>

         "Global Certificate" means a Certificate that evidences all or part of
     the Securities and is registered in the name of a Clearing Agency or a
     nominee thereof.

         "Holder" means, with respect to a Security, the Person in whose name
     the Security evidenced by a PEPS Units Certificate or a Treasury PEPS Units
     Certificate is registered in the related PEPS Units Register or the
     Treasury PEPS Units Register, as the case may be; provided, however, that
     in determining whether the Holders of the requisite number of PEPS Units or
     Treasury PEPS Units have voted on any matter, then for the purpose of such
     determination only (and not for any other purpose hereunder), if the
     Security remains in the form of one or more Global Certificates and if the
     Clearing Agency which is the holder of such Global Certificate has sent an
     omnibus proxy assigning voting rights to the Clearing Agency Participants
     to whose accounts the Securities are credited on the record date, the term
     "Holder" shall mean such Clearing Agency Participant acting at the
     direction of the Beneficial Owners.

         "Indenture" means the Indenture, dated as of March 1, 1983, between
     the Company and The Chase Manhattan Bank (National Association), as
     Trustee, as amended and supplemented (including any provisions of the TIA
     that are deemed incorporated therein) by the First Supplemental Indenture
     to the Indenture, dated July 27, 1988, among Georgia-Pacific Corporation,
     The Chase Manhattan Bank (National Association), as Trustee, and Morgan
     Guaranty Trust Company of New York, as Successor Trustee, and by the
     Agreement of Resignation, Appointment and Acceptance, dated as of
     January 31, 1992, by and among Georgia-Pacific Corporation, Morgan Guaranty
     Trust Company of New York, as Trustee, and The Bank of New York, as
     Successor Trustee, pursuant to which the Senior Deferrable Notes will be
     issued.

         "Issuer Order" or "Issuer Request" means a written order or request
     signed in the name of the Company by its Chairman of the Board, its
     President or one of its Vice Presidents, and by its Treasurer, an Assistant
     Treasurer, its Secretary or an Assistant Secretary, and delivered to the
     Purchase Contract Agent.

         "Net Proceeds" has the meaning set forth in Section F of Article V of
     the Restated Articles of Incorporation of the Company.

         "non-electing share" has the meaning set forth in Section 5.6(b).

         "NYSE" has the meaning set forth in Section 5.1.

         "Officers' Certificate" means a certificate signed by (i) either the
     Chairman, Chief Executive Officer and President or Executive Vice
     President--Finance and Chief Financial Officer and (ii) either the Vice
     President and Treasurer or the Vice President, Deputy General Counsel and
     Secretary, of the Company, and delivered to the Purchase Contract Agent.
     Any Officers' Certificate delivered with respect to compliance with a
     condition or covenant provided for in this Agreement shall include:

                                       5
<PAGE>

               (1) a statement that each officer signing the Officers'
         Certificate has read the covenant or condition and the definitions
         relating thereto;

               (2) a brief statement of the nature and scope of the examination
         or investigation undertaken by each officer in rendering the Officers'
         Certificate;

               (3) a statement that each such officer has made such examination
         or investigation as, in such officer's opinion, is necessary to enable
         such officer to express an informed opinion as to whether or not such
         covenant or condition has been complied with; and

               (4) a statement as to whether, in the opinion of each such
         officer, such condition or covenant has been complied with.

         "Opinion of Counsel" means a written opinion of counsel, who may be
     counsel to the Company (and who may be an employee of the Company), and who
     shall be reasonably acceptable to the Purchase Contract Agent.  An opinion
     of counsel may rely on certificates as to matters of fact.

         "Outstanding Securities" means, with respect to any PEPS Units or
     Treasury PEPS Units and as of the date of determination, all PEPS Units or
     Treasury PEPS Units evidenced by Certificates theretofore authenticated,
     executed and delivered under this Agreement, except:

               (1) If a Termination Event has occurred, (i) Treasury PEPS Units
         and (ii) PEPS Units for which the underlying Senior Deferrable Notes
         have been theretofore deposited with the Purchase Contract Agent in
         trust for the Holders of such PEPS Units;

               (2) PEPS Units and Treasury PEPS Units evidenced by Certificates
         theretofore cancelled by the Purchase Contract Agent or delivered to
         the Purchase Contract Agent for cancellation or deemed cancelled
         pursuant to the provisions of this Agreement; and

               (3) PEPS Units and Treasury PEPS Units evidenced by Certificates
         in exchange for or in lieu of which other Certificates have been
         authenticated, executed on behalf of the Holder and delivered pursuant
         to this Agreement, other than any such Certificate in respect of which
         there shall have been presented to the Purchase Contract Agent proof
         satisfactory to it that such Certificate is held by a bona fide
         purchaser in whose hands the PEPS Units or Treasury PEPS Units
         evidenced by such Certificate are valid obligations of the Company;

     provided, however, that in determining whether the Holders of the requisite
     number of the PEPS Units or Treasury PEPS Units have given any request,
     demand, authorization,

                                       6
<PAGE>

     direction, notice, consent or waiver hereunder, PEPS Units or Treasury PEPS
     Units owned by the Company or any Affiliate of the Company shall be
     disregarded and deemed not to be Outstanding Securities, except that, in
     determining whether the Purchase Contract Agent shall be protected in
     relying upon any such request, demand, authorization, direction, notice,
     consent or waiver, only PEPS Units or Treasury PEPS Units which a
     Responsible Officer of the Purchase Contract Agent knows to be so owned
     shall be so disregarded. PEPS Units or Treasury PEPS Units so owned which
     have been pledged in good faith may be regarded as Outstanding Securities
     if the pledgee establishes to the satisfaction of the Purchase Contract
     Agent the pledgee's right so to act with respect to such PEPS Units or
     Treasury PEPS Units and that the pledgee is not the Company or any
     Affiliate of the Company.

         "Payment Date" means each February 16, May 16, August 16 and
     November 16, commencing November 16, 1999.

         "PEPS Unit" means the collective rights and obligations of a Holder of
     a PEPS Units Certificate in respect of the Senior Deferrable Note, subject
     to the Pledge thereof, and the related Purchase Contract.

         "PEPS Units Certificate" means a certificate evidencing the rights and
     obligations of a Holder in respect of the number of PEPS Units specified on
     such certificate.

         "PEPS Units Register" and "PEPS Units Registrar" have the respective
     meanings set forth in Section 3.5.

         "Permitted Investments" has the meaning set forth in Section 1 of the
     Pledge Agreement.

         "Person" means a legal person, including any individual, corporation,
     estate, partnership, joint venture, association, joint-stock company,
     limited liability company, trust, unincorporated organization or government
     or any agency or political subdivision thereof or any other entity of
     whatever nature.

         "Plan" means an employee benefit plan that is subject to ERISA, a plan
     or individual retirement account that is subject to Section 4975 of the
     Code or any entity whose assets are considered assets of any such plan.

         "Pledge" means the pledge under the Pledge Agreement of the Senior
     Deferrable Notes or the Treasury Securities, in either case constituting a
     part of the Securities.

         "Pledge Agreement" means the Pledge Agreement, dated as of July 7,
     1999, among the Company, the Collateral Agent, the Securities Intermediary
     and the Purchase Contract Agent, on its own behalf and as attorney-in-fact
     for the Holders from time to time of the Securities.

                                       7
<PAGE>

         "Pledged Senior Deferrable Notes" has the meaning set forth in Section
     1 of the Pledge Agreement.

         "Predecessor Certificate" means a Predecessor PEPS Units Certificate
     or a Predecessor Treasury PEPS Units Certificate.

         "Predecessor PEPS Units Certificate" of any particular PEPS Units
     Certificate means every previous PEPS Units Certificate evidencing all or a
     portion of the rights and obligations of the Company and the Holder under
     the PEPS Units evidenced thereby; and, for the purposes of this definition,
     any PEPS Units Certificate authenticated and delivered under Section 3.10
     in exchange for or in lieu of a mutilated, destroyed, lost or stolen PEPS
     Units Certificate shall be deemed to evidence the same rights and
     obligations of the Company and the Holder as the mutilated, destroyed, lost
     or stolen PEPS Units Certificate.

         "Predecessor Treasury PEPS Units Certificate" of any particular
     Treasury PEPS Units Certificate means every previous Treasury PEPS Units
     Certificate evidencing all or a portion of the rights and obligations of
     the Company and the Holder under the Treasury PEPS Units evidenced thereby;
     and, for the purposes of this definition, any Treasury PEPS Units
     Certificate authenticated and delivered under Section 3.10 in exchange for
     or in lieu of a mutilated, destroyed, lost or stolen Treasury PEPS Units
     Certificate shall be deemed to evidence the same rights and obligations of
     the Company and the Holder as the mutilated, destroyed, lost or stolen
     Treasury PEPS Units Certificate.

         "Proceeds" has the meaning set forth in Section 1 of the Pledge
     Agreement.

         "Purchase Contract" means, with respect to any Security, the contract
     forming a part of such Security and obligating the Company to (i) sell, and
     the Holder of such Security to purchase, shares of Georgia-Pacific Group
     Stock and (ii) pay the Holder Purchase Contract Payments on the terms and
     subject to the conditions set forth in Article Five hereof.

         "Purchase Contract Agent" means the Person named as the "Purchase
     Contract Agent" in the first paragraph of this agreement until a successor
     Purchase Contract Agent shall have become such pursuant to the applicable
     provisions of this Agreement, and thereafter "Purchase Contract Agent"
     shall mean such Person.

         "Purchase Contract Payments" means the payments payable by the Company
     on the Payment Dates in respect of each Purchase Contract, equal to .% per
     annum of the Stated Amount.

         "Purchase Contract Settlement Date" means the earlier of (1)
     August 16, 2002; (2) the fifth Business Day immediately preceding the
     Redemption Date, if any, or (3) the fifth Business Day immediately
     preceding the Spin-Off Date, if any.

                                       8
<PAGE>

         "Purchase Contract Settlement Fund" has the meaning set forth in
     Section 5.5.

         "Purchase Price" has the meaning set forth in Section 5.1.

         "Purchased Shares" has the meaning set forth in Section 5.6(a)(6).

         "Record Date" for the Purchase Contract Payments payable on any
     Payment Date means, as to any Global Certificate, the Business Day next
     preceding such Payment Date, and as to any other Certificate, the fifteenth
     Business Day prior to such Payment Date.

         "Redemption" has the meaning set forth in Section 5.10(a)(i)

         "Redemption Date" has the meaning set forth in Section 5.10(a)(i).

         "Reference Price" has the meaning set forth in Section 5.1.

         "Register" means the PEPS Units Register and the Treasury PEPS Units
     Register.

         "Registrar" means the PEPS Units Registrar and the Treasury PEPS Units
     Registrar.

         "Related Business Transaction" has the meaning set forth in Section F
     of Article V of the Restated Articles of Incorporation of the Company.

         "Remarketing" has the meaning set forth in the Senior Deferrable Notes
     Board Resolutions.

         "Remarketing Agent" has the meaning set forth in Section 5.4(b).

         "Remarketing Agreement" means the Remarketing Agreement, dated as of
     July 7, 1999, between the Company and the Remarketing Agent.

         "Remarketing Fee" has the meaning set forth in Section 5.4(b).

         "Reorganization Event" has the meaning set forth in Section 5.6(b).

         "Reset Rate" has the meaning set forth in the Senior Deferrable Notes
     Board Resolutions.

         "Responsible Officer" means, with respect to the Purchase Contract
     Agent, any officer of the Purchase Contract Agent assigned by the Purchase
     Contract Agent to administer its corporate trust matters.

         "Securities Intermediary" means The Chase Manhattan Bank, as
     Securities Intermediary under the Pledge Agreement until a successor
     Securities Intermediary shall

                                       9
<PAGE>

     have become such pursuant to the applicable provisions of the Pledge
     Agreement, and thereafter "Securities Intermediary" shall mean such
     successor.

         "Security" means a PEPS Unit or a Treasury PEPS Unit, as the case may
     be.

         "Senior Deferrable Notes" means the Senior Deferrable Notes issued
     under the Indenture, each bearing interest, payable on the Payment Dates,
     at the Coupon Rate until the Purchase Contract Settlement Date, and at the
     Reset Rate thereafter.

         "Senior Deferrable Notes Board Resolutions" means the resolutions duly
     adopted by the Board on June ., 1999 relating to the Senior Deferrable
     Notes.

         "Senior Trustee" means The Bank of New York, a New York State banking
     corporation, as trustee under the Indenture, or any successor thereto.

         "Settlement Rate" has the meaning set forth in Section 5.1.

         "Spin-Off Date" has the meaning set forth in Section 5.10(b).

         "Stated Amount" means $50.

         "Stated Maturity" means, with respect to the Senior Deferrable Notes,
     August 16, 2004.

         "Termination Date" means the date, if any, on which a Termination
     Event occurs.

         "Termination Event" means the occurrence of any of the following
     events:

         (1) at any time on or prior to the Purchase Contract Settlement Date,
     a judgment, decree or court order shall have been entered granting relief
     under the Bankruptcy Code, adjudicating the Company to be insolvent, or
     approving as properly filed a petition seeking reorganization or
     liquidation of the Company or any other similar applicable Federal or State
     law, and, unless such judgment, decree or order shall have been entered
     within 60 days prior to the Purchase Contract Settlement Date, such decree
     or order shall have continued undischarged and unstayed for a period of 60
     days;

         (2) a judgment, decree or court order for the appointment of a
     receiver or liquidator or trustee or assignee in bankruptcy or insolvency
     of the Company or of its property, or for the termination or liquidation of
     its affairs, shall have been entered, and, unless such judgment, decree or
     order shall have been entered within 60 days prior to the Purchase Contract
     Settlement Date, such judgment, decree or order shall have continued
     undischarged and unstayed for a period of 60 days; or

         (3) at any time on or prior to the Purchase Contract Settlement Date,
     the Company shall file a petition for relief under the Bankruptcy Code, or
     shall consent to the

                                       10
<PAGE>

     filing of a bankruptcy proceeding against it, or shall file a petition or
     answer or consent seeking reorganization or liquidation under the
     Bankruptcy Code or any other similar applicable Federal or State law, or
     shall consent to the filing of any such petition, or shall consent to the
     appointment of a receiver or liquidator or trustee or assignee in
     bankruptcy or insolvency of it or of its property, or shall make an
     assignment for the benefit of creditors, or shall admit in writing its
     inability to pay its debts generally as they become due.

         "Threshold Appreciation Price" has the meaning set forth in Section
     5.1.

         "TIA" means the Trust Indenture Act of 1939, as amended from time to
     time, or any successor legislation.

         "Trading Day" has the meaning set forth in Section 5.1.

         "Treasury PEPS Unit" means, following the substitution of Treasury
     Securities for the Senior Deferrable Note as collateral to secure a
     Holder's obligations under the Purchase Contract, the collective rights and
     obligations of a Holder of a Treasury PEPS Units Certificate in respect of
     such Treasury Securities, subject to the Pledge thereof, and the related
     Purchase Contract.

         "Treasury PEPS Units Certificate" means a certificate evidencing the
     rights and obligations of a Holder in respect of the number of Treasury
     PEPS Units specified on such certificate.

         "Treasury PEPS Units Register" and "Treasury PEPS Units Registrar"
     have the respective meanings set forth in Section 3.5.

         "Treasury Securities" means zero-coupon U.S. Treasury Securities
     (Cusip No. 912820BE6) which are the principal strip of the .% U.S. Treasury
     Securities which mature on August 15, 2002.

         "Underwriting Agreement" means the Underwriting Agreement, dated
     June 30, 1999, between the Company and Morgan Stanley & Co. Incorporated,
     Goldman, Sachs & Co., PaineWebber Incorporated and Salomon Smith Barney
     Inc.

Section I.2.  Compliance Certificates and Opinions.

     Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take any
action in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such

                                       11
<PAGE>

application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.

     Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:

          (1) a statement that each individual signing such certificate or
     opinion has read such covenant or condition and the definitions herein
     relating thereto;

          (2) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (3) a statement that, in the opinion of each such individual, he or
     she has made such examination or investigation as is necessary to enable
     such individual to express an informed opinion as to whether or not such
     covenant or condition has been complied with; and

          (4) a statement as to whether, in the opinion of each such individual,
     such condition or covenant has been complied with.

Section I.3.  Form of Documents Delivered to Purchase Contract Agent.

     In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous.  Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.

                                       12
<PAGE>

Section I.4.  Acts of Holders; Record Dates.

     (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Purchase
Contract Agent and, where it is hereby expressly required, to the Company.  Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments.  Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of the Purchase
Contract Agent and the Company, if made in the manner provided in this Section.

     (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner which the Purchase Contract Agent deems
sufficient.

     (c) The ownership of Securities shall be proved by the PEPS Units Register
or the Treasury PEPS Units Register, as the case may be.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Certificate shall bind every future Holder of
the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Purchase
Contract Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such Certificate.

     (e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities.  If any record date is set pursuant to this paragraph,
the Holders of the Outstanding PEPS Units and the Outstanding Treasury PEPS
Units, as the case may be, on such record date, and no other Holders, shall be
entitled to take the relevant action with respect to the PEPS Units or the
Treasury PEPS Units, as the case may be, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken prior to or on the applicable Expiration Date by Holders
of the requisite number of Outstanding Securities on such record date.  Nothing
contained in this paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be cancelled and be of no
effect), and nothing contained in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite number of Outstanding
Securities on the date such action is taken.  Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by

                                       13
<PAGE>

Holders and the applicable Expiration Date to be given to the Purchase Contract
Agent in writing and to each Holder of Securities in the manner set forth in
Section 1.6.

     With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Purchase Contract Agent in writing, and to each Holder of Securities in the
manner set forth in Section 1.6, prior to or on the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph.  Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

Section I.5.  Notices.

     Any notice or communication is duly given if in writing and delivered in
Person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Purchase Contract Agent only upon receipt thereof:

     If to the Purchase Contract Agent:

          The First National Bank of Chicago
          One First National Plaza
          Suite 0126
          Chicago, Illinois  60670-0126
          Telecopier No.:  (312) 407-1708
          Attention:  Global Corporate Trust Services

     If to the Company:

          Georgia-Pacific Corporation
          133 Peachtree Street, N.E.
          Atlanta, Georgia  30303
          Telecopier No.: (404) 230-1674
          Attention:  .

     If to the Collateral Agent:

          The Chase Manhattan Bank
          450 West 33rd Street, 15th Floor
          New York, New York 10001-2697
          Telecopier No.: (212) 946-8154

                                       14
<PAGE>

          Attention: Corporate Trust Department

     If to the Senior Trustee:

          The Bank of New York
          101 Barclay Street
          New York, New York 10286
          Telecopier No.:  .
          Attention:  .

Section I.6.  Notice to Holders; Waiver.

     Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice.  In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders.  Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice.  Waivers of notice by Holders shall be filed with the
Purchase Contract Agent, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.

     In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Purchase Contract Agent
shall constitute a sufficient notification for every purpose hereunder.

Section I.7.  Effect of Headings and Table of Contents.

     The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

Section I.8.  Successors and Assigns.

     All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.

Section I.9.  Separability Clause.

     In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.

                                       15
<PAGE>

Section I.10.  Benefits of Agreement.

     Nothing contained in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Securities
evidenced by their Certificates by their acceptance of delivery of such
Certificates.

Section I.11.  Governing Law.

     This Agreement and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York.

Section I.12.  Legal Holidays.

     In any case where any Payment Date shall not be a Business Day,
notwithstanding any other provision of this Agreement or the PEPS Units
Certificates or the Treasury PEPS Units Certificates, Purchase Contract Payments
shall not be made on such date, but shall be made on the next succeeding
Business Day with the same force and effect as if made on such Payment Date,
provided that no interest shall accrue or be payable by the Company or any
Holder for the period from and after any such Payment Date, except that, if such
next succeeding Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day with the same
force and effect as if made on such Payment Date.

     In any case where any Purchase Contract Settlement Date shall not be a
Business Day, notwithstanding any other provision of this Agreement, the PEPS
Units Certificates or the Treasury PEPS Units Certificates, the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.

Section I.13.  Counterparts.

     This Agreement may be executed in any number of counterparts by the parties
hereto on separate counterparts, each of which, when so executed and delivered,
shall be deemed an original, but all such counterparts shall together constitute
one and the same instrument.

Section I.14.  Inspection of Agreement.

     A copy of this Agreement shall be available at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any Holder
or Beneficial Owner.

                                       16
<PAGE>

                                  ARTICLE II

                               Certificate Forms

Section II.1.  Forms of Certificates Generally.

     The PEPS Units Certificates (including the form of Purchase Contract
forming part of each PEPS Unit evidenced thereby) shall be in substantially the
form set forth in Exhibit A hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the PEPS Units are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such PEPS Units Certificates, as evidenced by their execution
of the PEPS Units Certificates.

     The definitive PEPS Units Certificates shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing the PEPS Units evidenced
by such PEPS Units Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.

     The Treasury PEPS Units Certificates (including the form of Purchase
Contract forming part of each Treasury PEPS Unit evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury PEPS Units may be listed or any
depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Treasury PEPS Units Certificates, as
evidenced by their execution of the Treasury PEPS Units Certificates.

     The definitive Treasury PEPS Units Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Treasury PEPS Units evidenced by such Treasury PEPS Units Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.

     Every Global Certificate authenticated, executed on behalf of the Holders
and delivered hereunder shall bear a legend in substantially the following form:

     "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
     PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN
     THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
     "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY.  THIS CERTIFICATE IS
     EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN
     THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
     IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS

                                       17
<PAGE>

     CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE
     DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
     TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED
     EXCEPT IN LIMITED CIRCUMSTANCES.

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
     DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
     CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER
     NAME AS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
     ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
     REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
     PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
     WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
     HEREIN."

Section II.2.  Form of Purchase Contract Agent's Certificate of Authentication.

     The form of the Purchase Contract Agent's certificate of authentication of
the PEPS Units shall be in substantially the form set forth on the form of the
PEPS Units Certificates.

     The form of the Purchase Contract Agent's certificate of authentication of
the Treasury PEPS Units shall be in substantially the form set forth on the form
of the Treasury PEPS Units Certificates.

                                  ARTICLE III

                                The Securities

Section III.1.  Amount; Form and Denominations.

     The aggregate number of Securities evidenced by Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
17,250,000 (including 2,250,000 relating to the Underwriters' over-allotment
option), except for Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Certificates
pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.

     The Certificates shall be issuable only in registered form and only in
denominations of a single PEPS Unit or Treasury PEPS Unit and any integral
multiple thereof.

Section III.2.  Rights and Obligations Evidenced by the Certificates.

                                       18
<PAGE>

     Each PEPS Units Certificate shall evidence the number of PEPS Units
specified therein, with each such PEPS Unit representing (1) the ownership by
the Holder thereof of a beneficial interest in one Senior Deferrable Note,
subject to the Pledge of such Senior Deferrable Note by such Holder pursuant to
the Pledge Agreement, and (2) the rights and obligations of the Holder thereof
and the Company under one Purchase Contract.  The Purchase Contract Agent as
attorney-in-fact for, and on behalf of, the Holder of each PEPS Unit shall
pledge, pursuant to the Pledge Agreement, the Senior Deferrable Note, forming a
part of such PEPS Unit, to the Collateral Agent and grant to the Collateral
Agent a security interest in the right, title and interest of such Holder in
such Senior Deferrable Note for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase shares of
Georgia-Pacific Group Stock.  Prior to the purchase of shares of Georgia-Pacific
Group Stock under each Purchase Contract, such Purchase Contracts shall not
entitle the Holder of a PEPS Units Certificate to any of the rights of a holder
of shares of Georgia-Pacific Group Stock, including, without limitation, the
right to vote or receive any dividends or other payments or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
for the election of directors of the Company or for any other matter, or any
other rights whatsoever as a shareholder of the Company.

     Upon the formation of a Treasury PEPS Unit pursuant to Section 3.13, each
Treasury PEPS Units Certificate shall evidence the number of Treasury PEPS Units
specified therein, with each such Treasury PEPS Unit representing (1) the
ownership by the Holder thereof of a 1/20 undivided beneficial interest in a
Treasury Security with a principal amount equal to $1,000, subject to the Pledge
of such Treasury Security by such Holder pursuant to the Pledge Agreement, and
(2) the rights and obligations of the Holder thereof and the Company under one
Purchase Contract.  Prior to the purchase of shares of Georgia-Pacific Group
Stock under each Purchase Contract, such Purchase Contracts shall not entitle
the Holder of a Treasury PEPS Units Certificate to any of the rights of a holder
of shares of Georgia-Pacific Group Stock, including, without limitation, the
right to vote or receive any dividends or other payments or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
for the election of directors of the Company or for any other matter, or any
other rights whatsoever as a shareholder of the Company.

Section III.3.  Execution, Authentication, Delivery and Dating.

     Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.

     The Certificates shall be executed on behalf of the Company by (1) either
the Chairman,  Chief Executive Officer and President or the Executive Vice
President--Finance and Chief Financial Officer and (ii) the Vice President and
Treasurer or the Vice President, Deputy General Counsel and Secretary, of the
Company.  The signature of any of these officers on the Certificates may be
manual or facsimile.

                                       19
<PAGE>

     Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.

     No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized signatory of the Purchase Contract Agent, as such Holder's
attorney-in-fact.  Such signature by an authorized signatory of the Purchase
Contract Agent shall be conclusive evidence that the Holder of such Certificate
has entered into the Purchase Contracts evidenced by such Certificate.

     Each Certificate shall be dated the date of its authentication.

     No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.

Section III.4.  Temporary Certificates.

     Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as the case
may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
PEPS Units or Treasury PEPS Units, as the case may be, are listed, or as may,
consistently herewith, be determined by the officers of the Company executing
such Certificates, as evidenced by their execution of the Certificates.

     If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay.  After the preparation
of definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder.  Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
PEPS Units or Treasury PEPS Units, as the case may be, as the temporary
Certificate or Certificates so surrendered.  Until so exchanged, the temporary
Certificates shall in all respects evidence the same benefits and the same
obligations with respect to the PEPS Units or Treasury PEPS Units, as the case
may be, evidenced thereby as definitive Certificates.

                                       20
<PAGE>

Section III.5.  Registration; Registration of Transfer and Exchange.

     The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "PEPS Units Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of PEPS Units Certificates and of transfers of PEPS Units
Certificates (the Purchase Contract Agent, in such capacity, the "PEPS Units
Registrar") and a register (the "Treasury PEPS Units Register") in which,
subject to such reasonable regulations as it may prescribe, the Purchase
Contract Agent shall provide for the registration of the Treasury PEPS Units
Certificates and of transfers of Treasury PEPS Units Certificates (the Purchase
Contract Agent, in such capacity, the "Treasury PEPS Units Registrar").

     Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of PEPS Units
or Treasury PEPS Units, as the case may be.

     At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
PEPS Units or Treasury PEPS Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office.  Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.

     All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of PEPS Units or
Treasury PEPS Units, as the case may be, and be entitled to the same benefits
and subject to the same obligations, under this Agreement as the PEPS Units or
Treasury PEPS Units, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.

     Every Certificate presented or surrendered for registration of transfer or
exchange shall (if so required by the Purchase Contract Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Purchase Contract Agent duly executed, by the Holder thereof
or its attorney duly authorized in writing.

     No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.6 and 8.5 not involving any transfer.

                                       21
<PAGE>

     Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earlier of the Purchase Contract
Settlement Date or the Termination Date.  In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Purchase Contract Agent shall:

          (1) if the Purchase Contract Settlement Date has occurred, deliver the
     shares of Georgia-Pacific Group Stock issuable in respect of the Purchase
     Contracts forming a part of the Securities evidenced by such other
     Certificate; or

          (2) if a Termination Event shall have occurred prior to the Purchase
     Contract Settlement Date, transfer the Senior Deferrable Notes or the
     Treasury Securities, as the case may be, evidenced thereby, in each case
     subject to the applicable conditions and in accordance with the applicable
     provisions of Article Five hereof.

Section III.6.  Book-Entry Interests.

     The Certificates, on original issuance, will be issued in the form of one
or more fully registered Global Certificates, to be delivered to the Depositary
by, or on behalf of, the Company.  Such Global Certificate shall initially be
registered on the books and records of the Company in the name of Cede & Co.,
the nominee of the Depositary, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interest in such Global
Certificate, except as provided in Section 3.9.  The Purchase Contract Agent
shall enter into an agreement with the Depositary if so requested by the
Company.  Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to Section 3.9:

          (1) the provisions of this Section 3.6 shall be in full force and
     effect;

          (2) the Company shall be entitled to deal with the Clearing Agency for
     all purposes of this Agreement (including making Purchase Contract Payments
     and receiving approvals, votes or consents hereunder) as the Holder of the
     Securities and the sole holder of the Global Certificates and shall have no
     obligation to the Beneficial Owners;

          (3) to the extent that the provisions of this Section 3.6 conflict
     with any other provisions of this Agreement, the provisions of this Section
     3.6 shall control; and

          (4) the rights of the Beneficial Owners shall be exercised only
     through the Clearing Agency and shall be limited to those established by
     law and agreements between such Beneficial Owners and the Clearing Agency
     or the Clearing Agency Participants.

                                       22
<PAGE>

Section III.7.  Notices to Holders.

     Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Securities
registered in the name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.

Section III.8.  Appointment of Successor Clearing Agency.

     If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.

Section III.9.  Definitive Certificates.

     If:

          (1) a Clearing Agency elects to discontinue its services as securities
     depositary with respect to the Securities and a successor Clearing Agency
     is not appointed within 90 days after such discontinuance pursuant to
     Section 3.8; or

          (2) there shall have occurred and be continuing a default by the
     Company in respect of its obligations under one or more Purchase Contracts,

then upon surrender of the Global Certificates representing the Securities by
the Clearing Agency, accompanied by registration instructions, the Company shall
cause definitive Certificates to be delivered to Beneficial Owners in accordance
with the instructions of the Clearing Agency.  The Company shall not be liable
for any delay in delivery of such instructions and may conclusively rely on and
shall be protected in relying on, such instructions.

Section III.10.  Mutilated, Destroyed, Lost and Stolen Certificates.

     If any mutilated Certificate is surrendered to the Purchase Contract Agent,
the Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, a new Certificate, evidencing the same number of
PEPS Units or Treasury PEPS Units, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.

     If there shall be delivered to the Company and the Purchase Contract Agent
(i) evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity as may be required by them to
hold each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Purchase Contract Agent that such Certificate has
been acquired by a bona fide purchaser, the Company shall execute and deliver to
the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, evidencing the same
number of PEPS Units or Treasury PEPS Units, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.

                                       23
<PAGE>

     Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earlier of the Purchase Contract Settlement Date or
the Termination Date.  In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Purchase Contract Agent shall:

          (1) if the Purchase Contract Settlement Date has occurred, deliver the
     shares of Georgia-Pacific Group Stock issuable in respect of the Purchase
     Contracts forming a part of the Securities evidenced by such Certificate;
     or

          (2) if a Termination Event shall have occurred prior to the Purchase
     Contract Settlement Date, transfer the Senior Deferrable Notes or the
     Treasury Securities, as the case may be, evidenced thereby, in each case
     subject to the applicable conditions and in accordance with the applicable
     provisions of Article Five hereof.

     Upon the issuance of any new Certificate under this Section, the Company
and the Purchase Contract Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Purchase Contract Agent) connected therewith.

     Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.

     The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.

                                       24
<PAGE>

Section III.11.  Persons Deemed Owners.

     Prior to due presentment of a Certificate for registration of transfer, the
Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the PEPS Units or Treasury PEPS Units evidenced
thereby, for the purpose of receiving interest payments on the Senior Deferrable
Notes, receiving Purchase Contract Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any interest
payments on the Senior Deferrable Notes or Purchase Contract Payments payable in
respect of the Purchase Contracts constituting a part of the PEPS Units or
Treasury PEPS Units evidenced thereby shall be overdue and notwithstanding any
notice to the contrary, and neither the Company nor the Purchase Contract Agent,
nor any agent of the Company or the Purchase Contract Agent, shall be affected
by notice to the contrary.

     Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by any
Clearing Agency (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Clearing Agency and owners of beneficial
interests in such Global Certificate, the operation of customary practices
governing the exercise of rights of such Clearing Agency (or its nominee) as
Holder of such Global Certificate.

Section III.12.  Cancellation.

     All Certificates surrendered for delivery of shares of Georgia-Pacific
Group Stock on or after the Purchase Contract Settlement Date, upon the transfer
of Senior Deferrable Notes or Treasury Securities, as the case may be, after the
occurrence of a Termination Event or pursuant to an Early Settlement, or upon
the registration of transfer or exchange of a Security, or a Collateral
Substitution or the reestablishment of PEPS Units shall, if surrendered to any
Person other than the Purchase Contract Agent, be delivered to the Purchase
Contract Agent and, if not already cancelled, shall be promptly cancelled by it.
The Company may at any time deliver to the Purchase Contract Agent for
cancellation any Certificates previously authenticated, executed and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the
Purchase Contract Agent.  No Certificates shall be authenticated, executed on
behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement.  All cancelled Certificates held by the Purchase
Contract Agent shall be destroyed by the Purchase Contract Agent unless
otherwise directed by Issuer Order.

     If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.

                                       25
<PAGE>

Section III.13.  Creation of Treasury PEPS Units by Substitution of Treasury
Securities.

     A Holder may separate the Senior Deferrable Notes from the related Purchase
Contracts in respect of such Holder's PEPS Units by substituting for such Senior
Deferrable Notes, Treasury Securities in an aggregate principal amount equal to
the aggregate principal amount of such Senior Deferrable Notes (a "Collateral
Substitution"), at any time from and after the date of this Agreement and prior
to or on the seventh Business Day immediately preceding the Purchase Contract
Settlement Date by:

          (1) depositing with the Securities Intermediary Treasury Securities
     having an aggregate principal amount equal to the aggregate principal
     amount of the Senior Deferrable Notes comprising part of such PEPS Units;
     and

          (2) transferring the related PEPS Units to the Purchase Contract Agent
     accompanied by a notice to the Purchase Contract Agent, substantially in
     the form of Exhibit C hereto, (i) stating that the Holder has transferred
     the relevant amount of Treasury Securities to the Securities Intermediary
     and (ii) requesting that the Purchase Contract Agent instruct the
     Collateral Agent to release the Senior Deferrable Notes underlying such
     PEPS Units, whereupon the Purchase Contract Agent shall promptly give such
     instruction to the Collateral Agent, substantially in the form of Exhibit A
     to the Pledge Agreement.

Upon receipt of the Treasury Securities described in clause (1) above and the
instruction described in clause (2) above, in accordance with the terms of the
Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to
effect the release of such Senior Deferrable Notes from the Pledge, free and
clear of the Company's security interest therein, and the transfer of such
Senior Deferrable Notes to the Purchase Contract Agent on behalf of the Holder.
Upon receipt thereof, the Purchase Contract Agent shall promptly:

          (i)    cancel the related PEPS Units;

          (ii)   transfer the Senior Deferrable Notes to the Holder; and

          (iii)  authenticate, execute on behalf of such Holder and deliver a
     Treasury PEPS Units Certificate executed by the Company in accordance with
     Section 3.3 evidencing the same number of Purchase Contracts as were
     evidenced by the cancelled PEPS Units.

     Holders who elect to separate the Senior Deferrable Notes from the related
Purchase Contracts and to substitute Treasury Securities for such Senior
Deferrable Notes shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.

     Holders may make Collateral Substitutions only in integral multiples of 20
PEPS Units.

                                       26
<PAGE>

     In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the PEPS Units or fails to
deliver PEPS Units Certificates to the Purchase Contract Agent after depositing
Treasury Securities with the Collateral Agent, the Senior Deferrable Notes,
constituting a part of such PEPS Units, and any interest payments on such Senior
Deferrable Notes, shall be held in the name of the Purchase Contract Agent or
its nominee in trust for the benefit of such Holder, until such PEPS Units are
so transferred or the PEPS Units Certificate is so delivered, as the case may
be, or, with respect to a PEPS Units Certificate, such Holder provides evidence
satisfactory to the Company and the Purchase Contract Agent that such PEPS Units
Certificate has been destroyed, lost or stolen, together with any indemnity that
may be required by the Purchase Contract Agent and the Company.

     Except as described in this Section 3.13, for so long as the Purchase
Contract underlying a PEPS Unit remains in effect, such PEPS Unit shall not be
separable into its constituent parts, and the rights and obligations of the
Holder in respect of the Senior Deferrable Note and the Purchase Contract
comprising such PEPS Unit may be acquired, and may be transferred and exchanged,
only as a PEPS Unit.

Section III.14.  Reestablishment of PEPS Units.

     A Holder of Treasury PEPS Units may recreate PEPS Units at any time prior
to or on the seventh Business Day immediately preceding the Purchase Contract
Settlement Date by:

          (1) depositing with the Securities Intermediary Senior Deferrable
     Notes, having an aggregate principal amount equal to the aggregate
     principal amount at maturity of the Treasury Securities comprising part of
     the Treasury PEPS Units; and

          (2) transferring the related Treasury PEPS Units to the Purchase
     Contract Agent accompanied by a notice to the Purchase Contract Agent,
     substantially in the form of Exhibit C hereto, (i) stating that the Holder
     has transferred the relevant amount of Senior Deferrable Notes to the
     Securities Intermediary and (ii) requesting that the Purchase Contract
     Agent instruct the Collateral Agent to release the Treasury Securities
     underlying such Treasury PEPS Units, whereupon the Purchase Contract Agent
     shall promptly give such instruction to the Collateral Agent, substantially
     in the form of Exhibit C to the Pledge Agreement.

Upon receipt of the Senior Deferrable Notes described in clause (1) above and
the instruction described in clause (2) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of the Treasury Securities having a
corresponding aggregate principal amount at maturity from the Pledge, free and
clear of the Company's security interest therein, and the transfer to the
Purchase Contract Agent on behalf of the Holder.  Upon receipt thereof, the
Purchase Contract Agent shall promptly:

          (i)    cancel the related Treasury PEPS Units;

                                       27
<PAGE>

          (ii)   transfer the Treasury Securities to the Holder; and

          (iii)  authenticate, execute on behalf of such Holder and deliver a
     PEPS Units Certificate executed by the Company in accordance with Section
     3.3 evidencing the same number of Purchase Contracts as were evidenced by
     the cancelled Treasury PEPS Units.

     Holders who elect to recreate PEPS Units shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as Collateral Agent
in respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.

     Holders of Treasury PEPS Units may reestablish PEPS Units in integral
multiples of 20 Treasury PEPS Units for 20 PEPS Units.

     Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Treasury PEPS Unit remains in effect, such Treasury PEPS
Unit shall not be separable into its constituent parts and the rights and
obligations of the Holder of such Treasury PEPS Unit in respect of the 1/20 of a
Treasury Security and the Purchase Contract comprising such Treasury PEPS Unit
may be acquired, and may be transferred and exchanged, only as a Treasury PEPS
Unit.

Section III.15.  Transfer of Collateral upon Occurrence of Termination Event.

     Upon the occurrence of a Termination Event and the transfer to the Purchase
Contract Agent of the Senior Deferrable Notes or the Treasury Securities, as the
case may be, underlying the PEPS Units and the Treasury PEPS Units, as the case
may be, pursuant to the terms of the Pledge Agreement, the Purchase Contract
Agent shall request transfer instructions with respect to such Senior Deferrable
Notes or Treasury Securities, as the case may be, from each Holder by written
request, substantially in the form of Exhibit D hereto, mailed to such Holder at
its address as it appears in the PEPS Units Register or the Treasury PEPS Units
Register, as the case may be.

     Upon book-entry transfer of the PEPS Units or the Treasury PEPS Units or
delivery of a PEPS Units Certificate or Treasury PEPS Units Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase Contract
Agent shall transfer the Senior Deferrable Notes or Treasury Securities, as the
case may be, underlying such PEPS Units or Treasury PEPS Units, as the case may
be, to such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions.  In the event a Holder of PEPS Units or
Treasury PEPS Units fails to effect such transfer or delivery, the Senior
Deferrable Notes or Treasury Securities, as the case may be, underlying such
PEPS Units or Treasury PEPS Units, as the case may be, and any distributions
thereon, shall be held in the name of the Purchase Contract Agent or its nominee
in trust for the benefit of such Holder, until the earlier of:

          (1) such PEPS Units or Treasury PEPS Units are transferred or the PEPS
     Units Certificate or Treasury PEPS Units Certificate is surrendered or such
     Holder

                                       28
<PAGE>

     provides satisfactory evidence that such PEPS Units Certificate or Treasury
     PEPS Units Certificate has been destroyed, lost or stolen, together with
     any indemnity that may be required by the Purchase Contract Agent and the
     Company; and

          (2) the expiration of the time period specified in the abandoned
     property laws of the relevant State.

Section III.16.  No Consent to Assumption.

     Each Holder of a Security, by acceptance thereof, shall be deemed expressly
to have withheld any consent to the assumption under Section 365 of the
Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or Federal law providing for reorganization or
liquidation.

                                  ARTICLE IV

                          The Senior Deferrable Notes

Section IV.1.  Interest Payments; Rights to Interest Payments Preserved.

     An interest payment on any Senior Deferrable Note which is paid on any
Payment Date shall, subject to receipt thereof by the Purchase Contract Agent
from the Collateral Agent as provided by the terms of the Pledge Agreement, be
paid to the Person in whose name the PEPS Units Certificate (or one or more
Predecessor PEPS Units Certificates) of which such Senior Deferrable Note is a
part is registered at the close of business on the Record Date for such Payment
Date.

     Each PEPS Units Certificate evidencing the Senior Deferrable Note delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other PEPS Units Certificate shall carry the right to accrued and
unpaid and deferred interest and the right to accrue interest, which rights were
carried by the Senior Deferrable Note underlying such other PEPS Units
Certificate.

     In the case of any PEPS Units with respect to which Cash Settlement of the
underlying Purchase Contract is effected prior to or on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date pursuant to prior
notice, or with respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, or with respect to which a
Collateral Substitution is effected, in each case on a date that is after any
Record Date and prior to or on the next succeeding Payment Date, the interest
payment on the Senior Deferrable Note underlying such PEPS Unit otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such interest payment shall, subject to receipt thereof by the
Purchase Contract Agent, be payable to the Person in whose name the PEPS Units

                                       29
<PAGE>

Certificate (or one or more Predecessor PEPS Units Certificates) was registered
at the close of business on the Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any PEPS Unit
with respect to which Cash Settlement or Early Settlement of the underlying
Purchase Contract is effected prior to or on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date or an Early Settlement Date, as
the case may be, or with respect to which a Collateral Substitution has been
effected, interest payments on the related Senior Deferrable Notes that would
otherwise be payable after the Purchase Contract Settlement Date or Early
Settlement Date shall not be payable hereunder to the Holder of such PEPS Units;
provided, however, that to the extent that such Holder continues to hold the
separated Senior Deferrable Note that formerly comprised a part of such Holder's
PEPS Unit, such Holder shall be entitled to receive the interest payments on
such separated Senior Deferrable Note, as provided in the Senior Deferrable
Notes Board Resolutions.

Section IV.2.  Deferral of Interest Payments.

     So long as no event of default has occurred and is occurring under the
Indenture, the Company shall have the right at any time until the Stated
Maturity of the Senior Deferrable Notes to defer the payment of interest on the
Senior Deferrable Notes for a period of time not extending beyond the Stated
Maturity (each such period of deferral, an "Extension Period").  If the Company
so elects to defer interest payments on the Senior Deferrable Notes, the Company
shall pay at the end of the Extension Period all interest then accrued and
unpaid, together with accrued interest at the Coupon Rate or the Reset Rate, as
applicable, compounded on each succeeding Payment Date.

Section IV.3.  Interest Rate Reset; Notice Relating to Cash Settlement.

     The Coupon Rate on the Senior Deferrable Notes on and after the Purchase
Contract Settlement Date shall be reset on the third Business Day immediately
preceding the Purchase Contract Settlement Date equal to the Reset Rate (such
Reset Rate to be in effect on and after the Purchase Contract Settlement Date).
The Reset Rate shall be equal to or greater than the Coupon Rate.

     Not later than 15 calendar days nor more than 30 calendar days prior to the
third Business Day immediately preceding the Purchase Contract Settlement Date,
the Company shall request DTC (or any successor Clearing Agency), to notify the
Beneficial Owners or Clearing Agency Participants holding PEPS Units of the
procedures to be followed by Holders of PEPS Units who intend to effect a Cash
Settlement prior to or on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date.

Section IV.4.  Notice and Voting.

     Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Senior Deferrable Notes, but only to the extent instructed in
writing by the Holders as described below.  Upon receipt of notice of any
meeting at which holders of Senior Deferrable Notes are entitled to vote

                                       30
<PAGE>

or upon any solicitation of consents, waivers or proxies of holders of Senior
Deferrable Notes, the Purchase Contract Agent shall, as soon as practicable
thereafter, mail to the Holders of PEPS Units a notice:

          (1) containing such information as is contained in the notice or
     solicitation;

          (2) stating that each Holder on the record date set by the Purchase
     Contract Agent therefor (which, to the extent possible, shall be the same
     date as the record date for determining the holders of Senior Deferrable
     Notes, as the case may be, entitled to vote) shall be entitled to instruct
     the Purchase Contract Agent as to the exercise of the voting rights
     pertaining to such Senior Deferrable Notes underlying their PEPS Units; and

          (3) stating the manner in which such instructions may be given.

Upon the written request of the Holders of PEPS Units on such record date
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Senior Deferrable Notes, as to which any
particular voting instructions are received.  In the absence of specific
instructions from the Holder of a PEPS Unit, the Purchase Contract Agent shall
abstain from voting the Senior Deferrable Notes underlying such PEPS Unit.  The
Company hereby agrees, if applicable, to solicit Holders of PEPS Units to timely
instruct the Purchase Contract Agent in order to enable the Purchase Contract
Agent to vote such Senior Deferrable Notes.

                                 ARTICLE V

                            The Purchase Contracts

Section V.1.  Purchase of Shares of Georgia-Pacific Group Stock.

     Each Purchase Contract shall, unless an Early Settlement has occurred in
accordance with Section 5.9 hereof, obligate the Holder of the related Security
to purchase, and the Company to sell, on the Purchase Contract Settlement Date
at a price equal to the Stated Amount (the "Purchase Price"), a number of shares
of Georgia-Pacific Group Stock equal to the Settlement Rate unless, prior to or
on the Purchase Contract Settlement Date, there shall have occurred a
Termination Event with respect to the Security of which such Purchase Contract
is a part.  The "Settlement Rate" is equal to:
          (1) if the Applicable Market Value (as defined below) equals or
     exceeds $. (the "Threshold Appreciation Price"), . shares of Georgia-
     Pacific Group Stock per Purchase Contract;

          (2) if the Applicable Market Value is less than the Threshold
     Appreciation Price but greater than $. (the "Reference Price"), the number
     of shares of Georgia-Pacific Group Stock having a value, based on the
     Applicable Market Value, equal to the Stated Amount; and

                                       31
<PAGE>

          (3) if the Applicable Market Value is less than or equal to the
     Reference Price, . shares of Georgia-Pacific Group Stock per Purchase
     Contract,

in each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).

     As provided in Section 5.11, no fractional shares of Georgia-Pacific Group
Stock will be issued upon settlement of Purchase Contracts.

     The "Applicable Market Value" means the average of the Closing Price per
share of Georgia-Pacific Group Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.

     The "Closing Price" per share of Georgia-Pacific Group Stock on any date of
determination means:

          (1) the closing sale price (or, if no closing price is reported, the
     last reported sale price) per share on the New York Stock Exchange, Inc.
     (the "NYSE") on such date;

          (2) if Georgia-Pacific Group Stock is not listed for trading on the
     NYSE on any such date, the closing sale price per share as reported in the
     composite transactions for the principal United States securities exchange
     on which Georgia-Pacific Group Stock is so listed;

          (3) if Georgia-Pacific Group Stock is not so listed on a United States
     national or regional securities exchange, the closing sale price per share
     as reported by The Nasdaq Stock Market, Inc.;

          (4) if Georgia-Pacific Group Stock is not so reported, the last quoted
     bid price for Georgia-Pacific Group Stock in the over-the-counter market as
     reported by the National Quotation Bureau or similar organization; or

          (5) if such bid price is not available, the average of the mid-point
     of the last bid and ask prices of Georgia-Pacific Group Stock on such date
     from at least three nationally recognized independent investment banking
     firms retained for this purpose by the Company.

     A "Trading Day" means a day on which Georgia-Pacific Group Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Georgia-Pacific Group Stock.

     Each Holder of a PEPS Unit or a Treasury PEPS Unit, by its acceptance
thereof:

                                       32
<PAGE>

          (1) irrevocably authorizes the Purchase Contract Agent to enter into
     and perform the related Purchase Contract on its behalf as its attorney-in-
     fact (including the execution of Certificates on behalf of such Holder);

          (2) agrees to be bound by the terms and provisions thereof;

          (3) covenants and agrees to perform its obligations under such
     Purchase Contracts;

          (4) consents to the provisions hereof;

          (5) irrevocably authorizes the Purchase Contract Agent to enter into
     and perform this Agreement and the Pledge Agreement on its behalf as its
     attorney-in-fact; and

          (6) consents to, and agrees to be bound by, the Pledge of the Senior
     Deferrable Notes or the Treasury Securities pursuant to the Pledge
     Agreement,

provided that upon a Termination Event, the rights of the Holder of such
Security under the Purchase Contract may be enforced without regard to any other
rights or obligations.  Each Holder of a PEPS Unit or a Treasury PEPS Unit, by
its acceptance thereof, further covenants and agrees, that to the extent and in
the manner provided in Section 5.4 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Senior Deferrable Notes or the
proceeds from the Treasury Securities at maturity on the Purchase Contract
Settlement Date, as the case may be, shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.

     Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such transferee)
by the terms of this Agreement, the Purchase Contracts underlying such
Certificate and the Pledge Agreement and the transferor shall be released from
the obligations under this Agreement, the Purchase Contracts underlying the
Certificate so transferred and the Pledge Agreement.  The Company covenants and
agrees, and each Holder of a Certificate, by its acceptance thereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.

Section V.2.  Purchase Contract Payments.

     The Company shall pay, on each Payment Date, the Purchase Contract Payments
payable in respect of each Purchase Contract to the Person in whose name a
Certificate (or one or more Predecessor Certificates) is registered at the close
of business on the Record Date next preceding such Payment Date.  The Purchase
Contract Payments will be payable at the office of the Purchase Contract Agent
in New York City maintained for that purpose or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such Person's
address

                                       33
<PAGE>

as it appears on the PEPS Units Register or Treasury PEPS Units
Register.  If any date on which Purchase Contract Payments are to be made is not
a Business Day, then payment of the Purchase Contract Payments payable on such
date will be made on the next day that is a Business Day (and without any
interest in respect of any such delay), except that, if such Business Day is in
the next calendar year, such payment will be made on the preceding Business Day.

     Upon the occurrence of a Termination Event, the Company's obligation to pay
Purchase Contract Payments (including any accrued or deferred Purchase Contract
Payments) shall cease.

     Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the reestablishment of PEPS Units) any other
Certificate shall carry the right to accrued and unpaid or deferred Purchase
Contract Payments and the right to accrue Purchase Contract Payments, which
rights were carried by the Purchase Contracts underlying such other
Certificates.

     Subject to Section 5.9, in the case of any Security with respect to which
Early Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date that is after any Record Date and prior to or on the next
succeeding Payment Date, Purchase Contract Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Purchase Contract Payments shall be paid to the Person in
whose name the Certificate evidencing such Security (or one or more Predecessor
Certificates) is registered at the close of business on such Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Security with respect to which Early Settlement of the
underlying Purchase Contract is effected on an Early Settlement Date, Purchase
Contract Payments that would otherwise be payable after the Early Settlement
Date with respect to such Purchase Contract shall not be payable.

Section V.3.  Deferral of Purchase Contract Payments.

     The Company has the right to defer payment of all or part of the Purchase
Contract Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date.  If the Company so elects to defer Purchase
Contract Payments, the Company shall pay additional Purchase Contract Payments
on such deferred installments of Purchase Contract Payments at a rate equal to
 .% per annum, compounding quarterly, until such deferred installments are paid.
If a Holder effects an Early Settlement or if a Termination Event shall occur,
such Holder will have no right to receive any accrued deferred Purchase Contract
Payments.

Section V.4.  Payment of Purchase Price.

     (a)  (i)  Unless a Holder of a PEPS Unit effects an Early Settlement of the
underlying Purchase Contract in the manner described in Section 5.9, each such
Holder who intends to pay in cash to satisfy such Holder's obligations under the
Purchase Contract shall notify the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit E hereto of his intention to pay in cash
("Cash Settlement") the Purchase Price for the shares of

                                       34
<PAGE>

Georgia-Pacific Group Stock to be purchased pursuant to the related Purchase
Contract. Such notice shall be given prior to 5:00 p.m. (New York City time) on
the seventh Business Day immediately preceding the Purchase Contract Settlement
Date. Prior to 11:00 a.m. (New York City time) on the next succeeding Business
Day, the Purchase Contract Agent shall notify the Collateral Agent and the
Senior Trustee of the receipt of such notices from Holders intending to make a
Cash Settlement.

          (ii) A Holder of a PEPS Unit who has so notified the Purchase Contract
Agent of his intention to effect a Cash Settlement in accordance with paragraph
(a)(i) above shall pay the Purchase Price to the Securities Intermediary for
deposit in the Collateral Account prior to 11:00 a.m. (New York City time) on
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check or
wire transfer, in each case in immediately available funds payable to or upon
the order of the Securities Intermediary.  Any cash received by the Collateral
Agent shall be invested promptly by the Securities Intermediary in Permitted
Investments and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement.  Any funds received by the Securities
Intermediary in respect of the investment earnings from the investment in such
Permitted Investments, shall be distributed to the Purchase Contract Agent when
received for payment to the Holder of the related PEPS Unit.

          (iii)  If a Holder of a PEPS Unit fails to notify the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, or does notify the Purchase Contract Agent as provided
in paragraph (a)(i) above of his intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph (a)(ii) above, such
Holder shall be deemed to have consented to the disposition of the Pledged
Senior Deferrable Notes pursuant to the Remarketing as described in paragraph
(b) below.

          (iv) Promptly after 11:00 a.m. (New York City time) on the fifth
Business Day preceding the Purchase Contract Settlement Date, the Purchase
Contract Agent, based on notices received by the Purchase Contract Agent
pursuant to Section 5.4(a) hereof and notice from the Securities Intermediary
regarding cash received by it prior to such time, shall notify the Collateral
Agent and the Senior Trustee of the aggregate number of Senior Deferrable Notes
to be tendered for purchase in the Remarketing in a notice substantially in the
form of Exhibit F hereto.

     (b) In order to dispose of the Senior Deferrable Notes, PEPS Units Holders
who have not notified the Purchase Contract Agent of their intention to effect a
Cash Settlement as provided in paragraph (a)(i) above, or who have so notified
the Purchase Contract Agent but failed to make such payment as required by
paragraph (a)(ii) above, the Company shall engage Morgan Stanley & Co.
Incorporated (the "Remarketing Agent") pursuant to the Remarketing Agreement to
sell such Senior Deferrable Notes.  In order to facilitate the Remarketing, the
Purchase Contract Agent, based on the notices specified in Section 5.4(a)(iv),
shall notify the Remarketing Agent, promptly after 11:00 a.m. (New York City
time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, of the aggregate number of

                                       35
<PAGE>

Senior Deferrable Notes that are part of PEPS Units to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, shall cause such Senior Deferrable Notes to be presented to the
Remarketing Agent for Remarketing.

     Upon receipt of such notice from the Purchase Contract Agent and such
Senior Deferrable Notes, the Remarketing Agent shall, on the third Business Day
immediately preceding the Purchase Contract Settlement Date, use reasonable
efforts to remarket such Senior Deferrable Notes on such date at a price equal
to at least 100.25% of the Stated Amount ($50.1250), as provided in the
Remarketing Agreement.  The proceeds from the Remarketing shall automatically be
applied by the Collateral Agent, in accordance with the Pledge Agreement, to
satisfy in full such PEPS Units Holders' obligations to pay the Purchase Price
for the shares of Georgia-Pacific Group Stock under the related Purchase
Contracts on the Purchase Contract Settlement Date.  In addition, $.1250 per
Senior Deferrable Note of the proceeds shall automatically be remitted to the
Remarketing Agent for services rendered in connection with the Remarketing (the
"Remarketing Fee").  Any proceeds remaining after satisfaction of the Purchase
Contract and payment of the Remarketing Fee shall be payable to the Holder of
such PEPS Unit.

     If, in spite of using their reasonable efforts, the Remarketing Agent
cannot remarket the related Senior Deferrable Notes of such Holders of PEPS
Units at a price equal to at least 100.25% of the Stated Amount ($50.1250), the
Remarketing shall be deemed to have failed (a "Failed Remarketing") and in
accordance with the terms of the Pledge Agreement, the Collateral Agent, for the
benefit of the Company, shall exercise its rights as a secured party with
respect to such Senior Deferrable Notes, including those actions specified in
paragraph (c) below; provided, that if upon a Failed Remarketing the Collateral
Agent exercises such rights for the benefit of the Company with respect to such
Senior Deferrable Notes, any accrued and unpaid and deferred interest on such
Senior Deferrable Notes shall become payable by the Company to the Purchase
Contract Agent for payment to the Beneficial Owner of the PEPS Units to which
such Senior Deferrable Notes relate.  The Company shall cause a notice of such
Failed Remarketing to be published on the second Business Day immediately
preceding the Purchase Contract Settlement Date in a daily newspaper in the
English language of general circulation in New York City, which is expected to
be The Wall Street Journal, and on Bloomberg News.

     (c) With respect to any Senior Deferrable Notes which are subject to a
Failed Remarketing, the Collateral Agent for the benefit of the Company reserves
all of its rights as a secured party with respect thereto and, subject to
applicable law and paragraph (g) below, may, among other things, (i) retain the
Senior Deferrable Notes in full satisfaction of the Holders' obligations under
the Purchase Contracts or (ii) sell the Senior Deferrable Notes in one or more
public or private sales.

     (d)  (i)  Unless a Holder of a Treasury PEPS Units effects an Early
Settlement of the underlying Purchase Contract through the early delivery of
cash to the Purchase Contract Agent in the manner described in Section 5.9, each
such Holder who intends to pay in cash shall notify the Purchase Contract Agent
by use of a notice in substantially the form of Exhibit E hereto of his
intention to pay in cash the Purchase Price for the shares of Georgia-Pacific
Group

                                       36
<PAGE>

Stock to be purchased pursuant to the related Purchase Contract.  Such
notice shall be given prior to 5:00 p.m. (New York City time) on the seventh
Business Day immediately preceding the Purchase Contract Settlement Date.  Prior
to 11:00 a.m. (New York City time) on the next succeeding Business Day, the
Purchase Contract Agent shall notify the Collateral Agent of the receipt of such
notices from such Holders intending to make a Cash Settlement.

          (ii) A Holder of a Treasury PEPS Unit who has so notified the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance with
paragraph (d)(i) above shall pay the Purchase Price to the Securities
Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by certified or cashiers'
check or wire transfer, in each case in immediately available funds payable to
or upon the order of the Securities Intermediary.  Any cash received by the
Collateral Agent shall be invested promptly by the Securities Intermediary in
Permitted Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement.  Any funds received by the
Securities Intermediary in respect of the investment earnings from the
investment in such Permitted Investments shall be distributed to the Purchase
Contract Agent when received for payment to the Holder of the related Treasury
PEPS Unit.

          (iii)  If a Holder of a Treasury PEPS Unit fails to notify the
Purchase Contract Agent of his intention to make a Cash Settlement in accordance
with paragraph (d)(i) above, or does notify the Purchase Contract Agent as
provided in paragraph (d)(i) above of his intention to pay the Purchase Price in
cash, but fails to make such payment as required by paragraph (d)(ii) above,
then upon the maturity of the Pledged Treasury Securities held by the Securities
Intermediary on the Business Day immediately preceding the Purchase Contract
Settlement Date, the principal amount of the Treasury Securities received by the
Securities Intermediary shall be invested promptly in Permitted Investments.

          On the Purchase Contract Settlement Date, an amount equal to the
Purchase Price shall be remitted to the Company as payment thereof without
receiving any instructions from the Holder of the related Treasury PEPS Unit.
In the event the sum of the proceeds from the related Pledged Treasury
Securities and the investment earnings earned from such investments is in excess
of the aggregate Purchase Price of the Purchase Contracts being settled thereby,
the Collateral Agent shall cause the Securities Intermediary to distribute such
excess to the Purchase Contract Agent for the benefit of the Holder of the
related Treasury PEPS Unit when received.

          (iv) A Holder of a Treasury PEPS Unit may elect to have the Senior
Deferrable Note, no longer a part of a PEPS Unit, remarketed.  A Holder making
such an election must notify the Senior Trustee prior to 11:00 a.m. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, of the aggregate number of Senior Deferrable Notes that are not
part of PEPS Units to be remarketed.  Any such notice will be irrevocable and
may not be conditioned upon the level at which the Reset Rate is established in
the Remarketing.  Concurrently, the Senior Trustee shall cause such Senior
Deferrable Notes to be presented to the Remarketing Agent for Remarketing.

                                       37
<PAGE>

     (e) Any distribution to Holders of excess funds and interest described
above shall be payable at the office of the Purchase Contract Agent in New York
City maintained for that purpose or, at the option of the Holder, by check
mailed to the address of the Person entitled thereto at such address as it
appears on the Register.

     (f) Upon Cash Settlement of any Purchase Contract:

          (1) the Collateral Agent will in accordance with the terms of the
     Pledge Agreement cause the Pledged Senior Deferrable Note or the Pledged
     Treasury Securities, as the case may be, underlying the relevant Security
     to be released from the Pledge, free and clear of any security interest of
     the Company, and transferred to the Purchase Contract Agent for delivery to
     the Holder thereof or its designee as soon as practicable; and

          (2) subject to the receipt thereof, the Purchase Contract Agent shall,
     by book-entry transfer or other appropriate procedures, in accordance with
     written instructions provided by the Holder thereof, transfer such Senior
     Deferrable Note or such Treasury Securities, as the case may be (or, if no
     such instructions are given to the Purchase Contract Agent by the Holder,
     the Purchase Contract Agent shall hold such Senior Deferrable Note or such
     Treasury Securities, as the case may be, and any interest payment thereon,
     in the name of the Purchase Contract Agent or its nominee in trust for the
     benefit of such Holder until the expiration of the time period specified in
     the abandoned property laws of the relevant State).

     (g) The obligations of the Holders to pay the Purchase Price are non-
recourse obligations and, except to the extent satisfied by Early Settlement or
Cash Settlement, are payable solely out of the proceeds of any Collateral
pledged to secure the obligations of the Holders and in no event will Holders be
liable for any deficiency between the proceeds of the disposition of Collateral
and the Purchase Price.

     (h) The Company shall not be obligated to issue any shares of Georgia-
Pacific Group Stock in respect of a Purchase Contract or deliver any
certificates thereof to the Holder of the related PEPS Unit or Treasury PEPS
Unit unless the Company shall have received payment in full for the aggregate
purchase price for the Georgia-Pacific Group Stock to be purchased thereunder in
the manner herein set forth.

Section V.5.  Issuance of Shares of Georgia-Pacific Group Stock.

     Unless a Termination Event or an Early Settlement shall have occurred,
subject to Section 5.6(b), the Company shall issue and deposit with the Purchase
Contract Agent, for the benefit of the Holders of the Outstanding Securities,
one or more certificates representing the shares of Georgia-Pacific Group Stock
registered in the name of the Purchase Contract Agent (or its nominee) as
custodian for the Holders (such certificates for shares of Georgia-Pacific Group
Stock, together with any dividends or distributions for which a record date and
payment date for

                                       38
<PAGE>

such dividend or distribution has occurred after the Purchase
Contract Settlement Date, being hereinafter referred to as the "Purchase
Contract Settlement Fund") to which the Holders are entitled hereunder.

     Subject to the foregoing, upon surrender of a Certificate to the Purchase
Contract Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive forthwith in exchange therefor a
certificate representing that number of whole shares of Georgia-Pacific Group
Stock which such Holder is entitled to receive pursuant to the provisions of
this Article Five (after taking into account all Securities then held by such
Holder), together with cash in lieu of fractional shares as provided in Section
5.11 and any dividends or distributions with respect to such shares constituting
part of the Purchase Contract Settlement Fund, but without any interest thereon,
and the Certificate so surrendered shall forthwith be cancelled.  Such shares
shall be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the Purchase
Contract Agent.  If any shares of Georgia-Pacific Group Stock issued in respect
of a Purchase Contract are to be registered to a Person other than the Person in
whose name the Certificate evidencing such Purchase Contract is registered, no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.

Section V.6.  Adjustment of Settlement Rate.

     (a   Adjustments for Dividends, Distributions, Stock Splits, Etc.

          (1 In case the Company shall pay or make a dividend or other
     distribution on Georgia-Pacific Group Stock in Georgia-Pacific Group Stock,
     the Settlement Rate in effect at the opening of business on the day
     following the date fixed for the determination of shareholders entitled to
     receive such dividend or other distribution shall be increased by dividing
     such Settlement Rate by a fraction of which:

               (i) the numerator shall be the number of shares of Georgia-
          Pacific Group Stock outstanding at the close of business on the date
          fixed for such determination; and

               (ii) the denominator shall be the sum of such number of shares
          and the total number of shares constituting such dividend or other
          distribution,

     such increase to become effective immediately after the opening of business
     on the day following the date fixed for such determination.  For the
     purposes of this paragraph (1), the number of shares of Georgia-Pacific
     Group Stock at any time outstanding shall not include shares held in the
     treasury of the Company but shall include any shares issuable in respect of
     any scrip certificates issued in lieu of fractions of shares of Georgia-
     Pacific

                                       39
<PAGE>

     Group Stock. The Company will not pay any dividend or make any distribution
     on shares of Georgia-Pacific Group Stock held in the treasury of the
     Company.

          (2 In case the Company shall issue rights, warrants or options to all
     holders of its Georgia-Pacific Group Stock (not being available on an
     equivalent basis to Holders of the Securities upon settlement of the
     Purchase Contracts underlying such Securities) entitling them, for a period
     expiring within 45 days after the record date for the determination of
     shareholders entitled to receive such rights, warrants or options, to
     subscribe for or purchase shares of Georgia-Pacific Group Stock at a price
     per share less than the Current Market Price per share of Georgia-Pacific
     Group Stock on the date fixed for the determination of shareholders
     entitled to receive such rights, warrants or options (other than pursuant
     to a dividend reinvestment plan), the Settlement Rate in effect at the
     opening of business on the day following the date fixed for such
     determination shall be increased by dividing such Settlement Rate by a
     fraction of which:

               (i) the numerator shall be the number of shares of Georgia-
          Pacific Group Stock outstanding at the close of business on the date
          fixed for such determination plus the number of shares of Georgia-
          Pacific Group Stock which the aggregate of the offering price of the
          total number of shares of Georgia-Pacific Group Stock so offered for
          subscription or purchase would purchase at such Current Market Price;
          and

               (ii) the denominator shall be the number of shares of Georgia-
          Pacific Group Stock outstanding at the close of business on the date
          fixed for such determination plus the number of shares of Georgia-
          Pacific Group Stock so offered for subscription or purchase,

     such increase to become effective immediately after the opening of business
     on the day following the date fixed for such determination.  For the
     purposes of this paragraph (2), the number of shares of Georgia-Pacific
     Group Stock at any time outstanding shall not include shares held in the
     treasury of the Company but shall include any shares issuable in respect of
     any scrip certificates issued in lieu of fractions of shares of Georgia-
     Pacific Group Stock.  The Company shall not issue any such rights, warrants
     or options in respect of shares of Georgia-Pacific Group Stock held in the
     treasury of the Company.

          (3 In case outstanding shares of Georgia-Pacific Group Stock shall be
     subdivided or split into a greater number of shares of Georgia-Pacific
     Group Stock, the Settlement Rate in effect at the opening of business on
     the day following the day upon which such subdivision or split becomes
     effective shall be proportionately increased, and, conversely, in case
     outstanding shares of Georgia-Pacific Group Stock shall each be combined
     into a smaller number of shares of Georgia-Pacific Group Stock, the
     Settlement Rate in effect at the opening of business on the day following
     the day upon which such combination becomes effective shall be
     proportionately reduced, such increase or reduction, as the case may be, to
     become effective immediately after the opening of

                                       40
<PAGE>

     business on the day following the day upon which such subdivision, split or
     combination becomes effective.

          (4 In case the Company shall, by dividend or otherwise, distribute to
     all holders of its Georgia-Pacific Group Stock evidences of its
     indebtedness or assets (including securities, but excluding any rights,
     warrants or options referred to in paragraph (2) of this Section 5.6(a),
     any dividend or distribution paid exclusively in cash and any dividend or
     distribution referred to in paragraph (1) of this Section 5.6(a)), the
     Settlement Rate shall be adjusted so that the same shall equal the rate
     determined by dividing the Settlement Rate in effect immediately prior to
     the close of business on the date fixed for the determination of
     shareholders entitled to receive such distribution by a fraction of which:

               (i) the numerator shall be the Current Market Price per share of
          Georgia-Pacific Group Stock on the date fixed for such determination
          less the then fair market value (as determined by the Board of
          Directors, whose determination shall be conclusive and described in a
          Board Resolution) of the portion of the assets or evidences of
          indebtedness so distributed applicable to one share of Georgia-Pacific
          Group Stock; and

               (ii) the denominator shall be such Current Market Price per share
          of Georgia-Pacific Group Stock,

     such adjustment to become effective immediately prior to the opening of
     business on the day following the date fixed for the determination of
     shareholders entitled to receive such distribution.  In any case in which
     this paragraph (4) is applicable, paragraph (2) of this Section 5.6(a)
     shall not be applicable.

          (5 In case the Company shall, by dividend or otherwise, distribute to
     all holders of its Georgia-Pacific Group Stock cash (excluding:

          (x) any quarterly cash dividend on Georgia-Pacific Group Stock to the
     extent that the aggregate cash dividend per share of Georgia-Pacific Group
     Stock in any fiscal quarter does not exceed the greater of (A) the amount
     per share of Georgia-Pacific Group Stock of the next preceding quarterly
     cash dividend on Georgia-Pacific Group Stock to the extent that such
     preceding quarterly dividend did not require an adjustment of the
     Settlement Rate pursuant to this Section 5.6(a)(5) (as adjusted to reflect
     subdivisions or combinations of Georgia-Pacific Group Stock), and (B) 3.75%
     of the arithmetic average of the Closing Prices of Georgia-Pacific Group
     Stock during the ten consecutive Trading Days immediately prior to the date
     of declaration of such dividend, and

          (y) any dividend or distribution in connection with the liquidation,
     dissolution or termination of the Company, whether voluntary or
     involuntary),

                                       41
<PAGE>

     then, in such case, the Settlement Rate shall be increased so that the same
     shall equal the rate determined by multiplying the Settlement Rate in
     effect immediately prior to the close of business on such record date by a
     fraction of which:

               (i) the numerator shall be the Current Market Price of Georgia-
          Pacific Group Stock; and

               (ii) the denominator shall be the Current Market Price of
          Georgia-Pacific Group Stock on the record date less the amount of cash
          so distributed (and not excluded as provided above) applicable to one
          share of Georgia-Pacific Group Stock,

     such increase to be effective immediately prior to the opening of business
     on the day following the record date; provided, however, that in the event
     the portion of cash so distributed applicable to one share of Georgia-
     Pacific Group Stock is equal to or greater than the Current Market Price
     per share of Georgia-Pacific Group Stock on the record date, in lieu of the
     foregoing adjustment, adequate provision shall be made so that each holder
     of a Security shall have the right to receive upon settlement of the
     Securities the amount of cash such Holder would have received had such
     Holder settled each Security on the record date.  In the event that such
     dividend or distribution is not so paid or made, the Settlement Rate shall
     again be adjusted to be the Settlement Rate which would then be in effect
     if such dividend or distribution had not been declared.  If any adjustment
     is required to be made as set forth in this Section 5.6(a)(5) as a result
     of a distribution that is a quarterly dividend, such adjustment shall be
     based upon the amount by which such distribution exceeds the amount of the
     quarterly cash dividend permitted to be excluded pursuant to this Section
     5.6(a)(5), notwithstanding the provisions of Section 5.6(a)(10).  If an
     adjustment is required to be made as set forth in this Section 5.6(a)(5)
     above as a result of a distribution that is not a quarterly dividend, such
     adjustment shall be based upon the full amount of the distribution.

          (6 In case a tender or exchange offer made by the Company or any
     subsidiary of the Company for all or any portion of Georgia-Pacific Group
     Stock shall expire and such tender or exchange offer (as amended upon the
     expiration thereof) shall require the payment to shareholders (based on the
     acceptance (up to any maximum specified in the terms of the tender or
     exchange offer) of Purchased Shares) of (I) an aggregate consideration
     having a fair market value (as determined by the Board of Directors, whose
     determination shall be conclusive and described in a Board Resolution) that
     combined together with the aggregate of the cash plus the fair market value
     (as determined by the Board of Directors, whose determination shall be
     conclusive and described in a Board Resolution), as of the expiration of
     such tender or exchange offer, of consideration payable in respect of any
     other tender or exchange offer, by the Company or any subsidiary of the
     Company for all or any portion of Georgia-Pacific Group Stock expiring
     within the 12 months preceding the expiration of such tender or exchange
     offer and in respect of which no adjustment pursuant to this paragraph (6)
     has been made, and (II) the aggregate amount of any distributions to all
     holders of Georgia-Pacific Group Stock made

                                       42
<PAGE>

     exclusively in cash within the 12 months preceding the expiration of such
     tender or exchange offer and in respect of which no adjustment pursuant to
     paragraph (6) has been made, exceeds 15% of the product of the Current
     Market Price per share of Georgia-Pacific Group Stock as of the last time
     (the "Expiration Time") tenders could have been made pursuant to such
     tender or exchange offer (as it may be amended) times the number of shares
     of Georgia-Pacific Group Stock outstanding (including any tendered shares)
     on the Expiration Time, then, and in each such case, immediately prior to
     the opening of business on the day after the date of the Expiration Time,
     the Settlement Rate shall be adjusted so that the same shall equal the rate
     determined by dividing the Settlement Rate immediately prior to the close
     of business on the date of the Expiration Time by a fraction:

               (i) the numerator of which shall be equal to (A) the product of
          (I) the Current Market Price per share of Georgia-Pacific Group Stock
          on the date of the Expiration Time and (II) the number of shares of
          Georgia-Pacific Group Stock outstanding (including any tendered
          shares) on the Expiration Time less (B) the amount of cash plus the
          fair market value (determined as aforesaid) of the aggregate
          consideration payable to shareholders based on the transactions
          described in clauses (I) and (II) above (assuming in the case of
          clause (I) the acceptance, up to any maximum specified in the terms of
          the tender or exchange offer, of Purchased Shares); and

               (ii) the denominator of which shall be equal to the product of
          (A) the Current Market Price per share of Georgia-Pacific Group Stock
          as of the Expiration Time and (B) the number of shares of Georgia-
          Pacific Group Stock outstanding (including any tendered shares) as of
          the Expiration Time less the number of all shares validly tendered and
          not withdrawn as of the Expiration Time (the shares deemed so
          accepted, up to any such maximum, being referred to as the "Purchased
          Shares").

          (7 The reclassification of Georgia-Pacific Group Stock into securities
     including securities other than Georgia-Pacific Group Stock (other than any
     reclassification upon a Reorganization Event to which Section 5.6(b)
     applies) shall be deemed to involve:

               (i) a distribution of such securities other than Georgia-Pacific
          Group Stock to all holders of Georgia-Pacific Group Stock (and the
          effective date of such reclassification shall be deemed to be "the
          date fixed for the determination of shareholders entitled to receive
          such distribution" and the "date fixed for such determination" within
          the meaning of paragraph (4) of this Section); and

               (ii) a subdivision, split or combination, as the case may be, of
          the number of shares of Georgia-Pacific Group Stock outstanding
          immediately prior to such reclassification into the number of shares
          of Georgia-Pacific Group Stock outstanding immediately thereafter (and
          the effective date of such reclassification

                                       43
<PAGE>

          shall be deemed to be "the day upon which such subdivision or split
          becomes effective" or "the day upon which such combination becomes
          effective", as the case may be, and "the day upon which such
          subdivision, split or combination becomes effective" within the
          meaning of paragraph (3) of this Section).

          (8 The "Current Market Price" per share of Georgia-Pacific Group Stock
     on any day means the average of the daily Closing Prices for the five
     consecutive Trading Days selected by the Company commencing not more than
     30 Trading Days before, and ending not later than, the earlier of the day
     in question and the day before the "ex date" with respect to the issuance
     or distribution requiring such computation.  For purposes of this
     paragraph, the term "ex date", when used with respect to any issuance or
     distribution, shall mean the first date on which Georgia-Pacific Group
     Stock trades regular way on such exchange or in such market without the
     right to receive such issuance or distribution.

          (9 All adjustments to the Settlement Rate shall be calculated to the
     nearest 1/10,000th of a share of Georgia-Pacific Group Stock (or if there
     is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a
     share).  No adjustment in the Settlement Rate shall be required unless such
     adjustment would require an increase or decrease of at least one percent
     thereof; provided, however, that any adjustments which by reason of this
     subparagraph are not required to be made shall be carried forward and taken
     into account in any subsequent adjustment.  If an adjustment is made to the
     Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
     (10) of this Section 5.6(a), an adjustment shall also be made to the
     Applicable Market Value solely to determine which of clauses (a), (b) or
     (c) of the definition of Settlement Rate in Section 5.1 will apply on the
     Purchase Contract Settlement Date.  Such adjustment shall be made by
     multiplying the Applicable Market Value by a fraction of which the
     numerator shall be the Settlement Rate immediately after such adjustment
     pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this
     Section 5.6(a) and the denominator shall be the Settlement Rate immediately
     prior to such adjustment; provided, however, that if such adjustment to the
     Settlement Rate is required to be made pursuant to the occurrence of any of
     the events contemplated by paragraph (1), (2), (3), (4), (5), (7) or (10)
     of this Section 5.6(a) during the period taken into consideration for
     determining the Applicable Market Value, appropriate and customary
     adjustments shall be made to the Settlement Rate.

          (10 The Company may make such increases in the Settlement Rate, in
     addition to those required by this Section, as it considers to be advisable
     in order to avoid or diminish any income tax to any holders of shares of
     Georgia-Pacific Group Stock resulting from any dividend or distribution of
     stock or issuance of rights or warrants to purchase or subscribe for stock
     or from any event treated as such for income tax purposes or for any other
     reason.

     (b   Adjustment for Consolidation, Merger or Other Reorganization Event.

          In the event of:

                                       44
<PAGE>

          (i) any consolidation or merger of the Company with or into another
     Person (other than a merger or consolidation in which the Company is the
     continuing corporation and in which the shares of Georgia-Pacific Group
     Stock outstanding immediately prior to the merger or consolidation are not
     exchanged for cash, securities or other property of the Company or another
     corporation);

          (ii) any sale, transfer, lease or conveyance to another Person of the
     property of the Company as an entirety or substantially as an entirety;

          (iii)  any statutory share exchange of the Company with another Person
     (other than in connection with a merger or acquisition);

          (iv) any liquidation, dissolution or termination of the Company other
     than as a result of or after the occurrence of a Termination Event;

          (v) any conversion of all of the shares of Georgia-Pacific Group Stock
     into shares of Timber Stock pursuant to the Company's Restated Articles of
     Incorporation (any such event, a "Reorganization Event"),

the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of shares of Georgia-Pacific Group Stock issuable on
account of each Purchase Contract if the Purchase Contract Settlement Date had
occurred immediately prior to such Reorganization Event, assuming such Holder of
Georgia-Pacific Group Stock is not a Person with which the Company consolidated
or into which the Company merged or which merged into the Company or to which
such sale or transfer was made, as the case may be (any such Person, a
"Constituent Person"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Georgia-Pacific
Group Stock held by Affiliates of the Company and non-affiliates and such Holder
failed to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and other property
receivable upon such Reorganization Event is not the same for each share of
Georgia-Pacific Group Stock held immediately prior to such Reorganization Event
by other than a Constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised ("non-electing
share"), then for the purpose of this Section the kind and amount of securities,
cash and other property receivable upon such Reorganization Event by each non-
electing share shall be deemed to be the kind and amount so receivable per share
by a plurality of the non-electing shares).

     In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a

                                       45
<PAGE>

liquidation, dissolution or termination of the Company, the Company or a
liquidating trust created in connection therewith, shall execute and deliver to
the Purchase Contract Agent an agreement supplemental hereto providing that the
Holders of each Outstanding Security shall have the rights provided by this
Section 5.6(b). Such supplemental agreement shall provide for adjustments which,
for events subsequent to the effective date of such supplemental agreement,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section. The above provisions of this Section shall similarly apply
to successive Reorganization Events.

     (c   All calculations and determinations pursuant to this Section 5.6 shall
be made by the Company or its agent and the Purchase Contract Agent shall have
no responsibility with respect thereto.

Section V.7.  Notice of Adjustments and Certain Other Events.

     (a   Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:

          (1) forthwith compute the adjusted Settlement Rate in accordance with
     Section 5.6 and prepare and transmit to the Purchase Contract Agent an
     Officers' Certificate setting forth the Settlement Rate, the method of
     calculation thereof in reasonable detail, and the facts requiring such
     adjustment and upon which such adjustment is based; and

          (2) within 10 Business Days following the occurrence of an event that
     requires an adjustment to the Settlement Rate pursuant to Section 5.6 (or
     if the Company is not aware of such occurrence, as soon as practicable
     after becoming so aware), provide a written notice to the Holders of the
     Securities of the occurrence of such event and a statement in reasonable
     detail setting forth the method by which the adjustment to the Settlement
     Rate was determined and setting forth the adjusted Settlement Rate.

     (b   The Purchase Contract Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same.  The Purchase Contract Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Georgia-Pacific Group Stock, or of any securities or
property, which may at the time be issued or delivered with respect to any
Purchase Contract; and the Purchase Contract Agent makes no representation with
respect thereto.  The Purchase Contract Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any shares of Georgia-
Pacific Group Stock pursuant to a Purchase Contract or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article.

Section V.8.  Termination Event; Notice.

                                       46
<PAGE>

     The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Purchase Contract
Payments (including any deferred or accrued and unpaid Purchase Contract
Payments), if the Company shall have such obligation, and the rights and
obligations of Holders to purchase Georgia-Pacific Group Stock, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Purchase Contract Agent or the Company, if, prior to
or on the Purchase Contract Settlement Date, a Termination Event shall have
occurred.

     Upon and after the occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Senior Deferrable Notes forming
part of such Securities in the case of PEPS Units, or Treasury Securities in the
case of Treasury PEPS Units, in accordance with the provisions of Section 5.4 of
the Pledge Agreement.  Upon the occurrence of a Termination Event, the Company
shall promptly but in no event later than two Business Days thereafter give
written notice to the Purchase Contract Agent, the Collateral Agent and the
Holders, at their addresses as they appear in the Register.

Section V.9.  Early Settlement.

     (a   Subject to and upon compliance with the provisions of this Section
5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early ("Early Settlement") prior to or on the seventh
Business Day immediately preceding the Purchase Contract Settlement Date, as
provided herein.  In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Securities shall deliver such Certificates to the Purchase Contract Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early on the reverse thereof duly completed
and accompanied by payment (payable to the Company in immediately available
funds) in an amount (the "Early Settlement Amount") equal to:

          (1) the product of (A) the Stated Amount times (B) the number of
     Purchase Contracts with respect to which the Holder has elected to effect
     Early Settlement, plus

          (2) if such delivery is made with respect to any Purchase Contracts
     during the period from the close of business on any Record Date next
     preceding any Payment Date to the opening of business on such Payment Date,
     an amount equal to the sum of (x) the Purchase Contract Payments payable on
     such Payment Date with respect to such Purchase Contracts plus (y) in the
     case of a PEPS Units Certificate, the interest on the related Senior
     Deferrable Notes payable on such Payment Date.

Except as provided in the immediately preceding sentence and subject to the
second to last paragraph of Section 5.2, no payment shall be made upon Early
Settlement of any Purchase Contract on account of any Purchase Contract Payments
accrued on such Purchase Contract or on account of any dividends on the Georgia-
Pacific Group Stock issued upon such Early Settlement.  If the foregoing
requirements are first satisfied with respect to Purchase Contracts

                                       47
<PAGE>

underlying any Securities prior to or at 5:00 p.m. (New York City time) on a
Business Day, such day shall be the "Early Settlement Date" with respect to such
Securities and if such requirements are first satisfied after 5:00 p.m. (New
York City time) on a Business Day or on a day that is not a Business Day, the
"Early Settlement Date" with respect to such Securities shall be the next
succeeding Business Day.

     (b   Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to
receive, . shares of Georgia-Pacific Group Stock on account of each Purchase
Contract as to which Early Settlement is effected (the "Early Settlement Rate").
The Early Settlement Rate shall be adjusted in the same manner and at the same
time as the Settlement Rate is adjusted.

     (c   No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:

          (1) the shares of Georgia-Pacific Group Stock issuable upon Early
     Settlement of Purchase Contracts to be issued and delivered, together with
     payment in lieu of any fraction of a share, as provided in Section 5.11;
     and

          (2) the related Senior Deferrable Notes, in the case of PEPS Units, or
     the related Treasury Securities, in the case of Treasury PEPS Units, to be
     released from the Pledge by the Collateral Agent and transferred, in each
     case, to the Purchase Contract Agent for delivery to the Holder thereof or
     its designee.

     (d   Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Georgia-Pacific Group Stock from the Company and the Senior
Deferrable Notes or Treasury Securities, as the case may be, from the Securities
Intermediary, as applicable, the Purchase Contract Agent shall, in accordance
with the instructions provided by the Holder thereof on the applicable form of
Election to Settle Early on the reverse of the Certificate evidencing the
related Securities:

          (1) transfer to the Holder the Senior Deferrable Notes or Treasury
     Securities, as the case may be, forming a part of such Securities; and

          (2) deliver to the Holder a certificate or certificates for the full
     number of shares of Georgia-Pacific Group Stock issuable upon such Early
     Settlement, together with payment in lieu of any fraction of a share, as
     provided in Section 5.11.

     (e   In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall authenticate, countersign and deliver to the
Holder thereof, at the expense of the Company, a Certificate evidencing the
Securities as to which Early Settlement was not effected.

                                       48
<PAGE>

     (f) A Holder of a Security who effects Early Settlement may elect to have
the Senior Deferrable Note, no longer a part of a PEPS Unit or Treasury PEPS
Unit. as the case my be, remarketed.  A Holder making such an election must
notify the Senior Trustee prior to 11:00 a.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, of the
aggregate number of Senior Deferrable Notes that are not part of PEPS Units or
Treasury PEPS Units, as the case may be, to be remarketed.  Any such notice will
be irrevocable and may not be conditioned upon the level at which the Reset Rate
is established in the Remarketing.  Concurrently, the Senior Trustee shall cause
such Senior Deferrable Notes to be presented to the Remarketing Agent for
Remarketing.

Section V.10.  Acceleration of Purchase Contract Settlement Date.

     (a)  (i)  In the event the Company sells, transfers, assigns or otherwise
disposes of (whether by merger, consolidation, sale or contribution of assets or
stock or otherwise), in one transaction or a series of related transactions, all
of the properties and assets of the Georgia-Pacific Group, (a "Disposition"), to
one or more Persons (other than:

          (1) the Disposition by the Company of all of the Company's properties
     and assets in one transaction or a series of related transactions in
     connection with the liquidation, dissolution or termination of the Company
     and the distribution of assets to shareholders;

          (2) on a pro rata basis to the holders of all outstanding shares of
     Georgia-Pacific Group Stock;

          (3) to any Person controlled by the Company (as determined by the
     Board); or

          (4) in connection with a Related Business Transaction),

and the Company determines to redeem all of the outstanding shares of Georgia-
Pacific Group Stock in exchange for cash and/or securities (other than Common
Stock) and other property having a Fair Value as of the date of such
consummation in the aggregate equal to the Fair Value of the Net Proceeds of
such Disposition as of the date of such consummation (a "Redemption"), then the
Purchase Contract Settlement Date shall be accelerated to the fifth Business Day
immediately preceding the 85th Trading Day following the consummation of such
Disposition (the "Redemption Date").

                                       49
<PAGE>

          (ii) Not later than the 10th Trading Day following the consummation of
such a Disposition, the Company shall announce publicly by press release:

          (1) the estimated Net Proceeds of such Disposition;

          (2) the number of shares of Georgia-Pacific Group Stock outstanding;
          and

          (3) the number of shares of Georgia-Pacific Group Stock into which or
     for which outstanding Convertible Securities (including the Purchase
     Contracts) are then convertible, exchangeable or exercisable and the
     conversion, exchange or exercise price thereof.

          (iii)  Not earlier than the 26th Trading Day and not later than the
30th Trading Day following the consummation of such a Disposition, the Company
shall announce publicly by press release that it has irrevocably determined to
effect the Redemption.

          (iv) Not earlier than the 35th Trading Day and not later than the 45th
Trading Day following the consummation of such a Disposition, the Company shall
cause to be given to the Purchase Contract Agent, the Collateral Agent, the
Securities Intermediary, the Remarketing Agent, DTC  (or any successor Clearing
Agency) and each Holder of a Purchase Contract a notice setting forth, among
other things required by the Company's Restated Articles of Incorporation:

          (1) a statement that the Purchase Contract Settlement Date is being
     accelerated to the fifth Business Day prior to the Redemption Date because
     all shares of Georgia-Pacific Group Stock outstanding on the Redemption
     Date are being redeemed on the Redemption Date;

          (2) the time and date by which a Holder must give notice to the
     Purchase Contract Agent of his intention to effect a Cash Settlement
     pursuant to Section 5.4 of the Purchase Contract Agreement, which shall be
     prior to 5:00 p.m. (New York City time) on the seventh Business Day
     preceding the accelerated Purchase Contract Settlement Date;

          (3) the time and date by which a Holder who has so notified the
     Purchase Contract Agent of his intention to effect a Cash Settlement must
     pay the Purchase Price to the Securities Intermediary for deposit in the
     Collateral Account, which shall be prior to 11:00 a.m. (New York City time)
     on the fifth Business Day preceding the accelerated Purchase Contract
     Settlement Date;

          (4) the time and date by which the Purchase Contract Agent shall
     notify the Collateral Agent and the Senior Trustee of the aggregate number
     of Senior Deferrable Notes to be tendered for purchase in the Remarketing,
     which shall be after 11:00 a.m. (New York City time) on the fifth Business
     Day preceding the accelerated Purchase Contract Settlement Date;

                                       50
<PAGE>

          (5) the time and date by which the Purchase Contract Agent shall
     notify the Remarketing Agent of the aggregate number of Senior Deferrable
     Notes to be remarketed, which shall be after 11:00 a.m. (New York City
     time) on the fifth Business Day preceding the accelerated Purchase Contract
     Settlement Date;

          (6) the date on which the Remarketing Agent shall use reasonable
     efforts to remarket such Senior Deferrable Notes, which shall be the third
     Business Day preceding the accelerated Purchase Contract Settlement Date;

          (7) the date by which a Holder electing to effect an Early Settlement
     must effect such Early Settlement, which shall be the seventh Business Day
     preceding the accelerated Purchase Contract Settlement Date; and

          (8)  the Redemption Date.

     (b)  (i)  In the event that all of the assets and liabilities of the
Georgia-Pacific Group (and no other assets or liabilities of the Company or any
subsidiary thereof) are held directly or indirectly by one or more wholly owned
subsidiaries of the Company (the "Georgia-Pacific Group Subsidiaries"), and the
Company determines to redeem all of the outstanding shares of Georgia-Pacific
Group Stock in exchange for all of the outstanding shares of  the common stock
of the Georgia-Pacific Group Subsidiaries equal to the number of shares of the
Georgia-Pacific Group Subsidiaries to be outstanding immediately following such
redemption, then the Purchase Contract Settlement Date shall be accelerated to
the fifth Business Day immediately preceding such redemption date (the "Spin-Off
Date").

          (ii) Not earlier than the 30th Trading Day and not later than the 45th
Trading Day prior to the Spin-Off Date, the Company shall cause to be given to
the Purchase Contract Agent, the Collateral Agent, the Securities Intermediary,
the Remarketing Agent, DTC  (or any successor Clearing Agency) and each Holder
of a Purchase Contract a notice setting forth, among other things required by
the Company's Restated Articles of Incorporation:

          (1) a statement that the Purchase Contract Settlement Date is being
     accelerated to the fifth Business Day prior to the Spin-Off Date because
     all shares of Georgia-Pacific Group Stock outstanding on the Spin-Off Date
     are being redeemed on the Spin-Off Date in exchange for shares of common
     stock of the Georgia-Pacific Group Subsidiaries;

          (2) the time and date by which a Holder must give notice to the
     Purchase Contract Agent of his intention to effect a Cash Settlement
     pursuant to Section 5.4 of the Purchase Contract Agreement, which shall be
     prior to 5:00 p.m. (New York City time) on the seventh Business Day
     preceding the accelerated Purchase Contract Settlement Date;

          (3) the time and date by which a Holder who has so notified the
     Purchase Contract Agent of his intention to effect a Cash Settlement must
     pay the Purchase Price to the Securities Intermediary for deposit in the
     Collateral Account, which shall be prior to

                                       51
<PAGE>

     11:00 a.m. (New York City time) on the fifth Business Day preceding the
     accelerated Purchase Contract Settlement Date;

          (4) the time and date by which the Purchase Contract Agent shall
     notify the Collateral Agent and the Senior Trustee of the aggregate number
     of Senior Deferrable Notes to be tendered for purchase in the Remarketing,
     which shall be after 11:00 a.m. (New York City time) on the fifth Business
     Day preceding the accelerated Purchase Contract Settlement Date;

          (5) the time and date by which the Purchase Contract Agent shall
     notify the Remarketing Agent of the aggregate number of Senior Deferrable
     Notes to be remarketed, which shall be after 11:00 a.m. (New York City
     time) on the fifth Business Day preceding the accelerated Purchase Contract
     Settlement Date;

          (6) the date on which the Remarketing Agent shall use reasonable
     efforts to remarket such Senior Deferrable Notes, which shall be the third
     Business Day preceding the accelerated Purchase Contract Settlement Date;

          (7) the date by which a Holder electing to effect an Early Settlement
     must effect such Early Settlement, which shall be the seventh Business Day
     preceding the accelerated Purchase Contract Settlement Date; and

          (8)  the Spin-Off Date.

Section V.11.  No Fractional Shares.

     No fractional shares or scrip representing fractional shares of Georgia-
Pacific Group Stock shall be issued or delivered upon settlement on the Purchase
Contract Settlement Date or upon Early Settlement of any Purchase Contracts.  If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Georgia-
Pacific Group Stock which shall be delivered upon settlement shall be computed
on the basis of the aggregate number of Purchase Contracts evidenced by the
Certificates so surrendered.  Instead of any fractional share of Georgia-Pacific
Group Stock which would otherwise be deliverable upon settlement of any Purchase
Contracts on the Purchase Contract Settlement Date or upon Early Settlement, the
Company, through the Purchase Contract Agent, shall make a cash payment in
respect of such fractional interest in an amount equal to the value of such
fractional shares times the Applicable Market Value.  The Company shall provide
the Purchase Contract Agent from time to time with sufficient funds to permit
the Purchase Contract Agent to make all cash payments required by this Section
5.11 in a timely manner.

                                       52
<PAGE>

Section V.12.  Charges and Taxes.

     The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the shares of Georgia-Pacific Group Stock
pursuant to the Purchase Contracts; provided, however, that the Company shall
not be required to pay any such tax or taxes which may be payable in respect of
any exchange of or substitution for a Certificate evidencing a Security or any
issuance of a share of Georgia-Pacific Group Stock in a name other than that of
the registered Holder of a Certificate surrendered in respect of the Securities
evidenced thereby, other than in the name of the Purchase Contract Agent, as
custodian for such Holder, and the Company shall not be required to issue or
deliver such share certificates or Certificates unless or until the Person or
Persons requesting the transfer or issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.

                                 ARTICLE VI

                                 Remedies

Section VI.1.  Unconditional Right of Holders to Receive Purchase Contract
               Payments and to Purchase Shares of Georgia-Pacific Group Stock.

     Each Holder of a PEPS Unit or Treasury PEPS Unit shall have the right,
which is absolute and unconditional, (1) subject to the payment by such Holder
of Purchase Contract Payments pursuant to Section 5.9(a), to receive each
Purchase Contract Payment with respect to the Purchase Contract constituting a
part of such Security on the respective Payment Date for such Security,
provided, however, that a Holder will have no right to receive any accrued
deferred Purchase Contract Payments if he effects an Early Settlement or if a
Termination Event shall occur and (2) to purchase shares of Georgia-Pacific
Group Stock pursuant to such Purchase Contract and, in each such case, to
institute suit for the enforcement of any such Purchase Contract Payment and
right to purchase shares of Georgia-Pacific Group Stock, and such rights shall
not be impaired without the consent of such Holder.

Section VI.2.  Restoration of Rights and Remedies.

     If any Holder has instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.

Section VI.3.  Rights and Remedies Cumulative.

     Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy

                                       53
<PAGE>

herein conferred upon or reserved to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

Section VI.4.  Delay or Omission Not Waiver.

     No delay or omission of any Holder to exercise any right or remedy upon a
default shall impair any such right or remedy or constitute a waiver of any such
right.  Every right and remedy given by this Article or by law to the Holders
may be exercised from time to time, and as often as may be deemed expedient, by
such Holders.

Section VI.5.  Undertaking for Costs.

     All parties to this Agreement agree, and each Holder of a PEPS Unit or a
Treasury PEPS Unit, by its acceptance of such PEPS Unit or Treasury PEPS Unit
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the Purchase Contract Agent for any action taken, suffered or
omitted by it as Purchase Contract Agent, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; provided
that the provisions of this Section shall not apply to any suit instituted by
the Company, to any suit instituted by the Purchase Contract Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Securities, or to any suit instituted by any Holder
for the enforcement of distributions on any Senior Deferrable Notes or Purchase
Contract Payments on any Purchase Contract on or after the respective Payment
Date therefor in respect of any Security held by such Holder, or for enforcement
of the right to purchase shares of Georgia-Pacific Group Stock under the
Purchase Contracts constituting part of any Security held by such Holder.

Section VI.6.  Waiver of Stay or Extension Laws.

     The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Purchase Contract Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

                                       54
<PAGE>

                                 ARTICLE VII

                          The Purchase Contract Agent

Section VII.1.  Certain Duties and Responsibilities.

     (a)  The Purchase Contract Agent:

          (1) undertakes to perform, with respect to the Securities, such duties
     and only such duties as are specifically set forth in this Agreement and
     the Pledge Agreement, and no implied covenants or obligations shall be read
     into this Agreement or the Pledge Agreement against the Purchase Contract
     Agent; and

          (2) in the absence of bad faith or negligence on its part, may, with
     respect to the Securities, conclusively rely, as to the truth of the
     statements and the correctness of the opinions expressed therein, upon
     certificates or opinions furnished to the Purchase Contract Agent and
     conforming to the requirements of this Agreement or the Pledge Agreement,
     as applicable, but in the case of any certificates or opinions which by any
     provision hereof are specifically required to be furnished to the Purchase
     Contract Agent, the Purchase Contract Agent shall be under a duty to
     examine the same to determine whether or not they conform to the
     requirements of this Agreement or the Pledge Agreement, as applicable.

     (b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its own
negligent action, its own negligent failure to act, or its own wilful
misconduct, except that:
          (1) this Subsection shall not be construed to limit the effect of
     Subsection (a) of this Section;

          (2) the Purchase Contract Agent shall not be liable for any error of
     judgment made in good faith by a Responsible Officer, unless it shall be
     proved that the Purchase Contract Agent was negligent in ascertaining the
     pertinent facts; and

          (3) no provision of this Agreement or the Pledge Agreement shall
     require the Purchase Contract Agent to expend or risk its own funds or
     otherwise incur any financial liability in the performance of any of its
     duties hereunder, or in the exercise of any of its rights or powers, if
     adequate indemnity is not provided to it.

     (c) Whether or not therein expressly so provided, every provision of this
Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.

     (d) The Purchase Contract Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Purchase Contract Agent.

                                       55
<PAGE>

Section VII.2.  Notice of Default.

     Within 30 days after the occurrence of any default by the Company hereunder
of which a Responsible Officer of the Purchase Contract Agent has actual
knowledge, the Purchase Contract Agent shall transmit by mail to the Company and
the Holders of Securities, as their names and addresses appear in the Register,
notice of such default hereunder, unless such default shall have been cured or
waived.

Section VII.3.  Certain Rights of Purchase Contract Agent.

     Subject to the provisions of Section 7.1:

          (1) the Purchase Contract Agent may rely and shall be protected in
     acting or refraining from acting upon any resolution, certificate,
     statement, instrument, opinion, report, notice, request, direction,
     consent, order, bond, debenture, note, other evidence of indebtedness or
     other paper or document believed by it to be genuine and to have been
     signed or presented by the proper party or parties;

          (2) any request or direction of the Company mentioned herein shall be
     sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
     Request, and any resolution of the Board of Directors of the Company may be
     sufficiently evidenced by a Board Resolution;

          (3) whenever in the administration of this Agreement or the Pledge
     Agreement the Purchase Contract Agent shall deem it desirable that a matter
     be proved or established prior to taking, suffering or omitting any action
     hereunder, the Purchase Contract Agent (unless other evidence be herein
     specifically prescribed) may, in the absence of bad faith on its part, rely
     upon an Officers' Certificate of the Company;

          (4) the Purchase Contract Agent may consult with counsel and the
     written advice of such counsel or any Opinion of Counsel shall be full and
     complete authorization and protection in respect of any action taken,
     suffered or omitted by it hereunder in good faith and in reliance thereon;

          (5) the Purchase Contract Agent shall not be bound to make any
     investigation into the facts or matters stated in any resolution,
     certificate, statement, instrument, opinion, report, notice, request,
     direction, consent, order, bond, debenture, note, other evidence of
     indebtedness or other paper or document, but the Purchase Contract Agent,
     in its discretion, may make reasonable further inquiry or investigation
     into such facts or matters related to the execution, delivery and
     performance of the Purchase Contracts as it may see fit, and, if the
     Purchase Contract Agent shall determine to make such further inquiry or
     investigation, it shall be given a reasonable opportunity to examine the
     books, records and premises of the Company, personally or by agent or
     attorney; and

                                       56
<PAGE>

          (6) the Purchase Contract Agent may execute any of the powers
     hereunder or perform any duties hereunder either directly or by or through
     agents or attorneys or an Affiliate and the Purchase Contract Agent shall
     not be responsible for any misconduct or negligence on the part of any
     agent or attorney or an Affiliate appointed with due care by it hereunder.

Section VII.4.  Not Responsible for Recitals or Issuance of Securities.

     The recitals contained herein and in the Certificates shall be taken as the
statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy.  The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the Securities, or of the Pledge Agreement or the Pledge.  The Purchase Contract
Agent shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.

Section VII.5.  May Hold Securities.

     Any Registrar or any other agent of the Company, or the Purchase Contract
Agent and its Affiliates, in their individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with the Company, the
Collateral Agent or any other Person with the same rights it would have if it
were not Registrar or such other agent, or the Purchase Contract Agent.

Section VII.6.  Money Held in Custody.

     Money held by the Purchase Contract Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein.  The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise agreed in
writing with the Company.

Section VII.7.  Compensation and Reimbursement.

     The Company agrees:

          (1) to pay to the Purchase Contract Agent compensation for all
     services rendered by it hereunder and under the Pledge Agreement as the
     Company and the Purchase Contract Agent shall from time to time agree in
     writing;

          (2) except as otherwise expressly provided for herein, to reimburse
     the Purchase Contract Agent upon its request for all reasonable expenses,
     disbursements and advances incurred or made by the Purchase Contract Agent
     in accordance with any provision of this Agreement and the Pledge Agreement
     (including the reasonable compensation and the expenses and disbursements
     of its agents and counsel), except any such expense, disbursement or
     advance as may be attributable to its negligence or bad faith; and

                                       57
<PAGE>

          (3) to indemnify the Purchase Contract Agent and any predecessor
     Purchase Contract Agent for, and to hold it harmless against, any loss,
     liability or expense incurred without negligence or bad faith on its part,
     arising out of or in connection with the acceptance or administration of
     its duties hereunder, including the costs and expenses of defending itself
     against any claim or liability in connection with the exercise or
     performance of any of its powers or duties hereunder.

Section VII.8.  Corporate Purchase Contract Agent Required; Eligibility.

     There shall at all times be an Purchase Contract Agent hereunder which
shall be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a corporation in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms.  If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.  If at
any time the Purchase Contract Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

Section VII.9.  Resignation and Removal; Appointment of Successor.

     (a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.

     (b) The Purchase Contract Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation.  If the instrument of acceptance by a successor Purchase Contract
Agent required by Section 7.10 shall not have been delivered to the Purchase
Contract Agent within 30 days after the giving of such notice of resignation,
the resigning Purchase Contract Agent may petition any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.

     (c) The Purchase Contract Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities delivered to the
Purchase Contract Agent and the Company.

     (d)  If at any time:

                                       58
<PAGE>

          (1) the Purchase Contract Agent fails to comply with Section 310(b) of
     the TIA, as if the Purchase Contract Agent were an indenture trustee under
     an indenture qualified under the TIA, after written request therefor by the
     Company or by any Holder who has been a bona fide Holder of a Security for
     at least six months;

          (2) the Purchase Contract Agent shall cease to be eligible under
     Section 7.8 and shall fail to resign after written request therefor by the
     Company or by any such Holder; or

          (3) the Purchase Contract Agent shall become incapable of acting or
     shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
     Contract Agent or of its property shall be appointed or any public officer
     shall take charge or control of the Purchase Contract Agent or of its
     property or affairs for the purpose of rehabilitation, conservation or
     liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Purchase Contract Agent and the appointment of a successor Purchase
Contract Agent.

     (e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 7.10.  If no successor Purchase Contract Agent shall
have been so appointed by the Company and accepted appointment in the manner
required by Section 7.10, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Purchase Contract Agent.

     (f) The Company shall give, or shall cause such successor Purchase Contract
Agent to give, notice of each resignation and each removal of the Purchase
Contract Agent and each appointment of a successor Purchase Contract Agent by
mailing written notice of such event by first-class mail, postage prepaid, to
all Holders as their names and addresses appear in the applicable Register.
Each notice shall include the name of the successor Purchase Contract Agent and
the address of its Corporate Trust Office.

Section VII.10.  Acceptance of Appointment by Successor.

     (a) In case of the appointment hereunder of a successor Purchase Contract
Agent, every such successor Purchase Contract Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Purchase Contract
Agent an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Purchase Contract Agent shall become effective and such
successor Purchase Contract Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the

                                       59
<PAGE>

retiring Purchase Contract Agent; but, on the request of the Company or the
successor Purchase Contract Agent, such retiring Purchase Contract Agent shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Purchase Contract Agent all the rights, powers and trusts of the
retiring Purchase Contract Agent and shall duly assign, transfer and deliver to
such successor Purchase Contract Agent all property and money held by such
retiring Purchase Contract Agent hereunder.

     (b) Upon request of any such successor Purchase Contract Agent, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Purchase Contract Agent all such rights, powers
and agencies referred to in paragraph (a) of this Section.

     (c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.

Section VII.11.  Merger, Conversion, Consolidation or Succession to Business.

     Any corporation into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Purchase Contract
Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the
successor of the Purchase Contract Agent hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, with the execution
or filing of any paper or any further act on the part of any of the parties
hereto.  In case any Certificates shall have been authenticated and executed on
behalf of the Holders, but not delivered, by the Purchase Contract Agent then in
office, any successor by merger, conversion or consolidation to such Purchase
Contract Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Purchase Contract Agent had itself authenticated and executed such
Securities.

Section VII.12.  Preservation of Information; Communications to Holders.

     (a) The Purchase Contract Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Registrar.

     (b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Purchase Contract Agent, and furnish to the Purchase Contract
Agent reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Purchase Contract Agent shall mail to
all the Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable

                                       60
<PAGE>

promptness after a tender to the Purchase Contract Agent of the materials to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of such mailing.

Section VII.13.  No Obligations of Purchase Contract Agent.

     Except to the extent otherwise expressly provided in this Agreement, the
Purchase Contract Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder.  The
Company agrees, and each Holder of a Certificate, by his acceptance thereof,
shall be deemed to have agreed, that the Purchase Contract Agent's execution of
the Certificates on behalf of the Holders shall be solely as agent and attorney-
in-fact for the Holders, and that the Purchase Contract Agent shall have no
obligation to perform such Purchase Contracts on behalf of the Holders, except
to the extent expressly provided in Article Five hereof.  Anything contained in
this Agreement to the contrary notwithstanding, in no event shall the Purchase
Contract Agent or its officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Purchase Contract Agent,
incurred without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Purchase Contract Agent.

Section VII.14.  Tax Compliance.

     (a) The Company will comply with all applicable certification, information
reporting and withholding (including "backup" withholding) requirements imposed
by applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities.  Such compliance shall include, without limitation, the preparation
and timely filing of required returns and the timely payment of all amounts
required to be withheld to the appropriate taxing authority or its designated
agent.

     (b) The Purchase Contract Agent shall comply in accordance with the terms
hereof with any written direction received from the Company with respect to the
execution or certification of any required documentation and the application of
such requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement rely on any such direction
in accordance with the provisions of Section 7.1(a)(2) hereof.

     (c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.

                                       61
<PAGE>

                                 ARTICLE VIII

                            Supplemental Agreements

Section VIII.1.  Supplemental Agreements Without Consent of Holders.

     Without the consent of any Holders, the Company and the Purchase Contract
Agent, at any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Purchase
Contract Agent, to:

          (1) evidence the succession of another Person to the Company, and the
     assumption by any such successor of the covenants of the Company herein and
     in the Certificates;

          (2) evidence and provide for the acceptance of appointment hereunder
     by a successor Purchase Contract Agent;

          (3) add to the covenants of the Company for the benefit of the
     Holders, or surrender any right or power herein conferred upon the Company;

          (4) make provision with respect to the rights of Holders pursuant to
     the requirements of Section 5.6(b); or

          (5) except as provided for in Section 5.6, cure any ambiguity, correct
     or supplement any provisions herein which may be inconsistent with any
     other provisions herein, or make any other provisions with respect to such
     matters or questions arising under this Agreement, provided such action
     shall not adversely affect the interests of the Holders.

Section VIII.2.  Supplemental Agreements With Consent of Holders.

     With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Purchase Contract Agent, the Company,
when authorized by a Board Resolution, and the Purchase Contract Agent may enter
into an agreement or agreements supplemental hereto for the purpose of modifying
in any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous consent of the Holders of each outstanding Purchase
Contract affected thereby,

          (1)  change any Payment Date;

          (2) change the amount or the type of Collateral required to be Pledged
     to secure a Holder's obligations under the Purchase Contract, impair the
     right of the Holder of any Purchase Contract to receive distributions on
     the related Collateral or otherwise

                                       62
<PAGE>

     adversely affect the Holder's rights in or to such Collateral or adversely
     alter the rights in or to such Collateral;

          (3) reduce any Purchase Contract Payments or change any place where,
     or the coin or currency in which, any Purchase Contract Payment is payable;

          (4) impair the right to institute suit for the enforcement of any
     Purchase Contract;

          (5) reduce the number of shares of Georgia-Pacific Group Stock to be
     purchased pursuant to any Purchase Contract, increase the price to purchase
     shares of Georgia-Pacific Group Stock upon settlement of any Purchase
     Contract, change the Purchase Contract Settlement Date or otherwise
     adversely affect the Holder's rights under any Purchase Contract; or

          (6) reduce the percentage of the outstanding Purchase Contracts the
     consent of whose Holders is required for any such supplemental agreement;

provided that if any amendment or proposal referred to above would adversely
affect only the PEPS Units or the Treasury PEPS Units, then only the affected
class of Holders as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; and provided, further, that the unanimous consent
of the Holders of each outstanding Purchase Contract of such class affected
thereby shall be required to approve any amendment or proposal specified in
clauses (1) through (6) above.

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.

Section VIII.3.  Execution of Supplemental Agreements.

     In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
provided, and (subject to Section 7.1) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.  The
Purchase Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.

Section VIII.4.  Effect of Supplemental Agreements.

     Upon the execution of any supplemental agreement under this Article, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of

                                       63
<PAGE>

this Agreement for all purposes; and every Holder of Certificates theretofore or
thereafter authenticated, executed on behalf of the Holders and delivered
hereunder, shall be bound thereby.

Section VIII.5.  Reference to Supplemental Agreements.

     Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any supplemental agreement pursuant to this Article may,
and shall if required by the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent as to any matter provided for in such
supplemental agreement.  If the Company shall so determine, new Certificates so
modified as to conform, in the opinion of the Purchase Contract Agent and the
Company, to any such supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and delivered by
the Purchase Contract Agent in exchange for Outstanding Certificates.

                                  ARTICLE IX

           Merger, Consolidation, Share exchange, Sale or Conveyance

Section IX.1.  Covenant Not to Merge, Consolidate, Enter into a Share Exchange,
               Sell or Convey Property Except Under Certain Conditions.

     The Company covenants that it will not merge, consolidate or enter into a
share exchange with any other Person or sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless:

          (1) either the Company shall be the continuing corporation, or the
     successor (if other than the Company) shall be a corporation organized and
     existing under the laws of the United States of America or a State thereof
     or the District of Columbia and such corporation shall expressly assume all
     the obligations of the Company under the Purchase Contracts, this Agreement
     and the Pledge Agreement by one or more supplemental agreements in form
     reasonably satisfactory to the Purchase Contract Agent and the Collateral
     Agent, executed and delivered to the Purchase Contract Agent and the
     Collateral Agent by such corporation; and

          (2) the Company or such successor corporation, as the case may be,
     shall not, immediately after such merger, consolidation or share exchange,
     or such sale, assignment, transfer, lease or conveyance, be in default in
     the performance of any covenant or condition hereunder, under any of the
     Securities or under the Pledge Agreement.

Section IX.2.  Rights and Duties of Successor Corporation.

                                       64
<PAGE>

     In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.1, such successor corporation
shall succeed to and be substituted for the Company with the same effect as if
it had been named herein as the Company.  Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name of
Georgia-Pacific Corporation, any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Purchase Contract Agent; and, upon the order of
such successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Agreement prescribed, the Purchase
Contract Agent shall authenticate and execute on behalf of the Holders and
deliver any Certificates which previously shall have been signed and delivered
by the officers of the Company to the Purchase Contract Agent for authentication
and execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Purchase
Contract Agent for that purpose.  All the Certificates issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.

     In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.

Section IX.3.  Officers' Certificate and Opinion of Counsel Given to Purchase
Contract Agent'.

     The Purchase Contract Agent, subject to Sections 7.1 and 7.3, shall receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any such merger, consolidation, share exchange, sale, assignment, transfer,
lease or conveyance, and any such assumption, complies with the provisions of
this Article and that all conditions precedent to the consummation of any such
merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance have been met.

                                 ARTICLE X

                                 Covenants

Section X.1.  Performance Under Purchase Contracts.

     The Company covenants and agrees for the benefit of the Holders from time
to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.

Section X.2.  Maintenance of Office or Agency.

     The Company will maintain in the Borough of Manhattan, New York City an
office or agency where Certificates may be presented or surrendered for
acquisition of shares of Georgia-

                                       65
<PAGE>

Pacific Group Stock upon settlement of the Purchase Contracts on the Purchase
Contract Settlement Date or Early Settlement and for transfer of Collateral upon
occurrence of a Termination Event, where Certificates may be surrendered for
registration of transfer or exchange, for a Collateral Substitution or
reestablishment of PEPS Units and where notices and demands to or upon the
Company in respect of the Securities and this Agreement may be served. The
Company will give prompt written notice to the Purchase Contract Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Purchase Contract Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Purchase Contract
Agent as its agent to receive all such presentations, surrenders, notices and
demands.

     The Company may also from time to time designate one or more other offices
or agencies where Certificates may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, New York City for such purposes.  The Company will give prompt
written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate
Trust Office as paying agent in such city.

Section X.3.  Company to Reserve Georgia-Pacific Group Stock.

     The Company shall at all times prior to the Purchase Contract Settlement
Date reserve and keep available, free from preemptive rights, out of its
authorized but unissued Georgia-Pacific Group Stock the full number of shares of
Georgia-Pacific Group Stock issuable against tender of payment in respect of all
Purchase Contracts constituting a part of the Securities evidenced by
Outstanding Certificates.

Section X.4.  Covenants as to Georgia-Pacific Group Stock.

     The Company covenants that all shares of Georgia-Pacific Group Stock which
may be issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.

Section X.5.  Statements of Officers of the Company as to Default.

     The Company will deliver to the Purchase Contract Agent, within 120 days
after the end of each fiscal year of the Company (which as of the date hereof is
December 31) ending after the date hereof, an Officers' Certificate (one of the
signers of which shall be the principal executive officer, principal financial
officer or principal accounting officer of the Company), stating whether or not
to the knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions
hereof, and if the

                                       66
<PAGE>

Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

Section X.6.  ERISA.

     Each Holder from time to time of the PEPS Units which is a Plan hereby
represents that its acquisition of the PEPS Units and the holding of the same
satisfies the applicable fiduciary requirements of ERISA and that it is entitled
to exemption relief from the prohibited transaction provisions of ERISA and the
Code in accordance with one or more prohibited transaction exemptions or
otherwise will not result in a nonexempt prohibited transaction.

                                       67
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                     GEORGIA-PACIFIC CORPORATION

                                     By:  ______________________________________
                                          Name:
                                          Title:

                                     THE FIRST NATIONAL BANK OF CHICAGO, as
                                     Purchase Contract Agent

                                     By:  ______________________________________
                                          Name:
                                          Title:

                                       68
<PAGE>

                                                                       EXHIBIT A

                        FACE OF PEPS UNITS CERTIFICATE

     THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A
NOMINEE OF THE DEPOSITARY.  THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO
TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. _______                                                  Cusip No. 373298801
Number of PEPS Units ________

                          GEORGIA-PACIFIC CORPORATION
                                  PEPS UNITS

     This PEPS Units Certificate certifies that Cede & Co. is the registered
Holder of the number of PEPS Units set forth above.  Each PEPS Unit consists of
(i) the beneficial ownership by the Holder of one Senior Deferrable Note (the
"Senior Deferrable Note") of Georgia-Pacific Corporation, a Georgia corporation
(the "Company"), having a principal amount of $50, subject to the Pledge of such
Senior Deferrable Note by such Holder pursuant to the Pledge Agreement, and (ii)
the rights and obligations of the Holder under one Purchase Contract with the
Company.  All capitalized terms used herein which are defined in the Purchase
Contract Agreement (as defined on the reverse hereof) have the meaning set forth
therein.

     Pursuant to the Pledge Agreement, the Senior Deferrable Note constituting
part of each PEPS Unit evidenced hereby has been pledged to the Collateral
Agent, for the benefit of the
<PAGE>

Company, to secure the obligations of the Holder under the Purchase Contract
comprising part of such PEPS Unit.

     Payments of interest on any Senior Deferrable Note forming part of a PEPS
Unit evidenced hereby, shall, subject to receipt thereof by the Purchase
Contract Agent from the Securities Intermediary, be paid to the Person in whose
name this PEPS Units Certificate (or a Predecessor PEPS Units Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Interest is payable quarterly in arrears on February 16, May 16, August 16 and
November 16 of each year, commencing November 16, 1999 (each, a "Payment Date").
The Company may, at its option, defer payments of interest.

     Each Purchase Contract evidenced hereby obligates the Holder of this PEPS
Units Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date, at a price equal to $50 (the "Stated Amount"), a number of
shares of Georgia-Pacific Group Common Stock, par value $.80 per share
("Georgia-Pacific Group Stock"), equal to the Settlement Rate, unless prior to
or on the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the PEPS Unit of which
such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof.  The purchase price
(the "Purchase Price") for the shares of Georgia-Pacific Group Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall
be paid on the Purchase Contract Settlement Date by cash or by application of
payment received in respect of the principal amount with respect to each Pledged
Senior Deferrable Note pursuant to the Remarketing pledged to secure the
obligations under such Purchase Contract of the Holder of the PEPS Unit of which
such Purchase Contract is a part.

     The Company shall pay, on each Payment Date, in respect of each Purchase
Contract forming part of a PEPS Unit evidenced hereby, an amount (the "Purchase
Contract Payments") equal to .% per annum of the Stated Amount.  Such Purchase
Contract Payments shall be payable to the Person in whose name this PEPS Units
Certificate (or a Predecessor PEPS Units Certificate) is registered at the close
of business on the Record Date for such Payment Date.    The Company may, at its
option, defer Purchase Contract Payments.

     Interest payments on the Senior Deferrable Notes and Purchase Contract
Payments will be payable at the office of the Purchase Contract Agent in New
York City or, at the option of the Company, by check mailed to the address of
the Person entitled thereto as such address appears on the PEPS Units Register.

     Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this PEPS Units Certificate shall
not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.

                                      A-2
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                     GEORGIA-PACIFIC CORPORATION

                                     By:  ______________________________________
                                          Name:
                                          Title:

                                     By:  ______________________________________
                                          Name:
                                          Title:

                                     HOLDER SPECIFIED ABOVE (as to obligations
                                     of such Holder under the Purchase Contracts
                                     evidenced hereby)

                                     By:  The First National Bank of Chicago,
                                          not individually but solely as
                                          Attorney-in-Fact of such Holder

                                     By:  ______________________________________
                                          Name:
                                          Title:

Dated:

                                      A-3
<PAGE>

                       CERTIFICATE OF AUTHENTICATION OF
                            PURCHASE CONTRACT AGENT

     This is one of the PEPS Units Certificates referred to in the within
mentioned Purchase Contract Agreement.

                                     By:  THE FIRST NATIONAL BANK OF CHICAGO, as
                                          Purchase Contract Agent

                                     By:  ______________________________________
                                                     Authorized Officer

Dated:

                                      A-4
<PAGE>

                  (FORM OF REVERSE OF PEPS UNITS CERTIFICATE)

     Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of July 7, 1999 (as may be supplemented from time to time,
the "Purchase Contract Agreement"), between the Company and The First National
Bank of Chicago, as Purchase Contract Agent (including its successors hereunder,
the "Purchase Contract Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Purchase Contract Agent, the Company, and the Holders and of
the terms upon which the PEPS Units Certificates are, and are to be, executed
and delivered.

     Each Purchase Contract evidenced hereby obligates the Holder of this PEPS
Units Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Georgia-Pacific Group Stock equal to the Settlement Rate,
unless, prior to or on the Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of which such Purchase
Contract is a part or an Early Settlement shall have occurred.  The "Settlement
Rate" is equal to:

          (1) if the Applicable Market Value (as defined below) is equals or
     exceeds $. (the "Threshold Appreciation Price"), . shares of Georgia-
     Pacific Group Stock per Purchase Contract;

          (2) if the Applicable Market Value is less than the Threshold
     Appreciation Price but greater than $. (the "Reference Price"), the number
     of shares of Georgia-Pacific Group Stock per Purchase Contract having a
     value, based on the Applicable Market Value, equal to the Stated Amount;
     and

          (3) if the Applicable Market Amount is less than or equal to the
     Reference Price, . shares of Georgia-Pacific Group Stock per Purchase
     Contract,

in each case subject to adjustment as provided in the Purchase Contract
Agreement.

     No fractional shares of Georgia-Pacific Group Stock will be issued upon
settlement of Purchase Contracts, as provided in Section 5.11 of the Purchase
Contract Agreement.

     Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
PEPS Unit to purchase at the Purchase Price, and the Company to sell, a number
of shares of Georgia-Pacific Group Stock equal to the Early Settlement Rate or
the Settlement Rate, as applicable.

     The "Applicable Market Value" means the average of the Closing Price per
share of Georgia-Pacific Group Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.

                                      A-5
<PAGE>

     The "Closing Price" per share of Georgia-Pacific Group Stock on any date of
determination means:

          (1) the closing sale price (or, if no closing price is reported, the
     last reported sale price) per share on the New York Stock Exchange, Inc.
     (the "NYSE") on such date;

          (2) if Georgia-Pacific Group Stock is not listed for trading on the
     NYSE on any such date, the closing sale price per share as reported in the
     composite transactions for the principal United States securities exchange
     on which Georgia-Pacific Group Stock is so listed;

          (3) if Georgia-Pacific Group Stock is not so listed on a United States
     national or regional securities exchange, the closing sale price per share
     as reported by The Nasdaq Stock Market, Inc.;

          (4) if Georgia-Pacific Group Stock is not so reported, the last quoted
     bid price for Georgia-Pacific Group Stock in the over-the-counter market as
     reported by the National Quotation Bureau or similar organization; or

          (5) if such bid price is not available, the average of the mid-point
     of the last bid and ask prices of Georgia-Pacific Group Stock on such date
     from at least three nationally recognized independent investment banking
     firms retained for this purpose by the Company.

     A "Trading Day" means a day on which Georgia-Pacific Group Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Georgia-Pacific Group Stock.

     In accordance with the terms of the Purchase Contract Agreement, the Holder
of this PEPS Units Certificate may pay the Purchase Price for the shares of
Georgia-Pacific Group Stock purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement or an Early Settlement or a
Remarketing of the related Pledged Senior Deferrable Notes.  A Holder of PEPS
Units who does not effect, on or prior to 11:00 a.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
an effective Cash Settlement or an Early Settlement, shall pay the Purchase
Price for the shares of Georgia-Pacific Group Stock to be delivered under the
related Purchase Contract from the proceeds of the sale of the related Pledged
Notes held by the Collateral Agent.  Such sale will be made by the Remarketing
Agent pursuant to the terms of the Remarketing Agreement on the third Business
Day prior to the Purchase Contract Settlement Date.  If, as provided in the
Purchase Contract Agreement, upon the occurrence of a Failed Remarketing, the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Senior Deferrable Notes related to
this PEPS Units certificate, any accrued and

                                      A-6
<PAGE>

unpaid or deferred interest payments on such Pledged Senior Deferrable Notes
will become payable by the Company to the holder of this PEPS Units Certificate
in the manner provided for in the Purchase Contract Agreement.

     In the event the Company sells, transfers, assigns or otherwise  disposes
of all of the properties and assets of the Georgia-Pacific Group and determines
to redeem all of the outstanding shares of Georgia-Pacific Group Stock, or
redeems all of the shares of Georgia-Pacific Group Stock for shares of common
stock of one or more of its wholly owned subsidiaries which own all of the
assets and liabilities attributed to the Georgia-Pacific Group, the Purchase
Contract Settlement Date and Remarketing Date shall be accelerated to five
Business Days immediately preceding the Redemption Date or Spin-Off Date, as the
case may be.

     The Company shall not be obligated to issue any shares of Georgia-Pacific
Group Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment of the aggregate
purchase price for the shares of Georgia-Pacific Group Stock to be purchased
thereunder in the manner herein set forth.

     Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Senior Deferrable Notes.  Upon receipt of notice of any meeting at
which holders of Senior Deferrable Notes are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Senior Deferrable
Notes, the Purchase Contract Agent shall, as soon as practicable thereafter,
mail to the PEPS Units Holders a notice:

          (1) containing such information as is contained in the notice or
     solicitation;

          (2) stating that each PEPS Unit Holder on the record date set by the
     Purchase Contract Agent therefor (which, to the extent possible, shall be
     the same date as the record date for determining the holders of Senior
     Deferrable Notes entitled to vote) shall be entitled to instruct the
     Purchase Contract Agent as to the exercise of the voting rights pertaining
     to the Senior Deferrable Notes constituting a part of such Holder's PEPS
     Unit; and

          (3) stating the manner in which such instructions may be given.

Upon the written request of the PEPS Unit Holders on such record date, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum number of Senior Deferrable Notes as to which any particular voting
instructions are received.  In the absence of specific instructions from the
Holder of a PEPS Unit, the Purchase Contract Agent shall abstain from voting the
Senior Deferrable Notes evidenced by such PEPS Unit.

     The PEPS Certificates are issuable only in registered form and only in
denominations of a single PEPS Unit and any integral multiple thereof.  The
transfer of any PEPS Units Certificate

                                      A-7
<PAGE>

will be registered and PEPS Units Certificates may be exchanged as provided in
the Purchase Contract Agreement. The PEPS Units Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Purchase Contract Agent may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. A holder who
elects to substitute a Treasury Security for Senior Deferrable Notes, thereby
creating Treasury PEPS Units, shall be responsible for any fees or expenses
payable in connection therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a PEPS Unit remains
in effect, such PEPS Unit shall not be separable into its constituent parts, and
the rights and obligations of the Holder of such PEPS Unit in respect of the
Senior Deferrable Note and Purchase Contract constituting such PEPS Unit may be
transferred and exchanged only as a PEPS Unit.

     The Holder of PEPS Units may substitute for the Pledged Senior Deferrable
Notes securing such Holder's obligations under the related Purchase Contracts
Treasury Securities in an aggregate principal amount equal to the aggregate
principal amount of the Pledged Senior Deferrable Notes in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.  From and
after such Collateral Substitution, each Security for which such Pledged
Treasury Securities secures the Holder's obligation under the Purchase Contract
shall be referred to as a "Treasury PEPS Unit".  A Holder may make such
Collateral Substitution only in integral multiples of 20 PEPS Units for 20
Treasury PEPS Units.  Such Collateral Substitution may cause the equivalent
aggregate principal amount of this Certificate to be increased or decreased;
provided, however, this PEPS Units Certificate shall not represent more than
4,000,000 PEPS Units.  All such adjustments to the equivalent aggregate
principal amount of this PEPS Units Certificate shall be duly recorded by
placing an appropriate notation on the Schedule attached hereto.

     A Holder of Treasury PEPS Units may recreate PEPS Units by delivering to
the Securities Intermediary with an aggregate principal amount, in the case of
such Senior Deferrable Notes equal to the aggregate principal amount of the
Pledged Treasury Securities in exchange for the release of such Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement.

     The Company shall pay, on each Payment Date, the Purchase Contract Payments
payable in respect of each Purchase Contract to the Person in whose name the
PEPS Units Certificate evidencing such Purchase Contract is registered at the
close of business on the Record Date for such Payment Date.  Purchase Contract
Payments will be payable at the office of the Purchase Contract Agent in New
York City or, at the option of the Company, by check mailed to the address of
the Person entitled thereto at such address as it appears on the PEPS Units
Register.

     The Company has the right to defer payment of all or part of the Purchase
Contract Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date.  If the Company so elects to defer Purchase
Contract Payments, the Company shall pay additional Purchase Contract Payments
on such deferred installments of Purchase
<PAGE>

Contract Payments at a rate equal to .% per annum, compounding quarterly, until
such deferred installments are paid. If a Holder effects an Early Settlement or
if a Termination Event shall occur, such Holder will have no right to receive
any accrued and unpaid or deferred Purchase Contract Payments.

     The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Purchase Contract
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Purchase Contract Agent or the
Company, if, on or prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred.  Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Purchase Contract Agent, the Collateral Agent and the
Holders, at their addresses as they appear in the PEPS Units Register.  Upon and
after the occurrence of a Termination Event, the Collateral Agent shall release
the Senior Deferrable Notes from the Pledge in accordance with the provisions of
the Pledge Agreement.  A PEPS Unit shall thereafter represent the right to
receive the Senior Deferrable Note forming a part of such PEPS Unit in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.

     Subject to and upon compliance with the provisions of the Purchase Contract
Agreement, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early ("Early Settlement") as provided in the Purchase
Contract Agreement.  In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts evidenced by this PEPS Units Certificate,
the Holder of this PEPS Units Certificate shall deliver this PEPS Units
Certificate to the Purchase Contract Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to:

          (1) the product of (A) the Stated Amount times (B) the number of
     Purchase Contracts with respect to which the Holder has elected to effect
     Early Settlement, plus

          (2) if such delivery is made with respect to any Purchase Contracts
     during the period from the close of business on any Record Date for any
     Payment Date to the opening of business on such Payment Date, an amount
     equal to the Purchase Contract Payments payable on such Payment Date with
     respect to such Purchase Contracts.

Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Senior Deferrable Notes underlying such Securities shall
be released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Georgia-Pacific Group Stock
on account of each Purchase Contract forming part of a PEPS Unit as to which
Early Settlement is effected equal to the Early Settlement Rate.  The Early
Settlement Rate shall initially be equal to . shares of Georgia-Pacific Group
Stock and shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted as provided in the Purchase Contract Agreement.

                                      A-9
<PAGE>

     Upon registration of transfer of this PEPS Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this PEPS Units Certificate.  The Company covenants and agrees, and
the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound
by the provisions of this paragraph.

     The Holder of this PEPS Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the PEPS Units evidenced hereby on its behalf
as its attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee in
the event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Purchase Contract
Agent to enter into and perform the Purchase Contract Agreement and the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of
the Senior Deferrable Notes underlying this PEPS Units Certificate pursuant to
the Pledge Agreement.  The Holder further covenants and agrees that, to the
extent and in the manner provided in the Purchase Contract Agreement and the
Pledge Agreement, but subject to the terms thereof, payments in respect to the
aggregate principal amount of the Pledged Senior Deferrable Notes, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.

     Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.

     The Purchase Contracts shall be governed by, and construed in accordance
with, the laws of the State of New York.

     The Company, the Purchase Contract Agent and its Affiliates and any agent
of the Company or the Purchase Contract Agent may treat the Person in whose name
this PEPS Units Certificate is registered as the owner of the PEPS Units
evidenced hereby for the purpose of receiving payments of interest payable
quarterly on the Senior Deferrable Notes, receiving payments of Purchase
Contract Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such agent shall be affected by notice to the
contrary.

     The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Georgia-Pacific Group
Stock.

                                     A-10
<PAGE>

     A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Purchase Contract Agent.

                                     A-11
<PAGE>

                                 ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM:
                                   as tenants in common

UNIF GIFT MIN ACT:
                                     ---------------Custodian---------------
                                            (cust)            (minor)

                                   Under Uniform Gifts to Minors Act of
                                                                        -------

                                   --------------------------------------------

TEN ENT:                           as tenants by the entireties

JT TEN:                            as joint tenants with right of survivorship
                                   and not as tenants in common

Additional abbreviations may also be used though not in the above list.

                           -------------------------

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)

 (Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within PEPS Units Certificates and all rights thereunder, hereby irrevocably
constituting and appointing attorney to transfer said PEPS Units Certificates on
the books of Georgia-Pacific Corporation with full power of substitution in the
premises.

Dated:
       -------------------            -----------------------------------------
                                      Signature

                                      NOTICE: The signature to this assignment
                                      must correspond with the name as it
                                      appears upon the face of the within PEPS
                                      Units Certificates in every particular,
                                      without alteration or enlargement or any
                                      change whatsoever.

Signature Guarantee:
                     -----------------------------------

                                     A-12
<PAGE>

                            SETTLEMENT INSTRUCTIONS

     The undersigned Holder directs that a certificate for shares of Georgia-
Pacific Group Stock deliverable upon settlement on or after the Purchase
Contract Settlement Date of the Purchase Contracts underlying the number of PEPS
Units evidenced by this PEPS Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below.  If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.

Dated:
       ------------                      --------------------------------------
                                         Signature
                                         Signature Guarantee:
                                                              -----------------
                                         (if assigned to another person)

If shares are to be registered in the
name of and delivered to a Person other  REGISTERED HOLDER
than the Holder, please (i) print such
Person's name and address and (ii)
provide a guarantee of your signature:

                                         Please print name and address of
                                         Registered Holder:

-------------------------------------    -------------------------------------
Name                                     Name

-------------------------------------    -------------------------------------
Address                                  Address

-------------------------------------    -------------------------------------

-------------------------------------    -------------------------------------

-------------------------------------    -------------------------------------

Social Security or other
Taxpayer Identification
Number, if any
                                         -------------------------------------

                                     A-13
<PAGE>

                           ELECTION TO SETTLE EARLY

     The undersigned Holder of this PEPS Units Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of PEPS Units evidenced by this PEPS Units Certificate
specified below.  The undersigned Holder directs that a certificate for shares
of Georgia-Pacific Group Stock deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment for
any fractional share and any PEPS Units Certificate representing any PEPS Units
evidenced hereby as to which Early Settlement of the related Purchase Contracts
is not effected, to the undersigned at the address indicated below unless a
different name and address have been indicated below.  Pledged Senior Deferrable
Notes deliverable upon such Early Settlement will be transferred in accordance
with the transfer instructions set forth below.  If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.

Dated:
       ----------------               -----------------------------------
                                                  Signature

Signature Guarantee:
                     -------------------------------------

                                     A-14
<PAGE>

     Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:

If shares of Georgia-Pacific Group       REGISTERED HOLDER
Stock or PEPS Units Certificates are
to be registered in the name of and
delivered to and Pledged Senior
Deferrable Notes are to be transferred
to a Person other than the Holder,
please print such Person's name and
address:

                                         Please print name and address of
                                         Registered Holder:

-------------------------------------    -------------------------------------
Name                                     Name

-------------------------------------    -------------------------------------
Address                                  Address

-------------------------------------    -------------------------------------

-------------------------------------    -------------------------------------

-------------------------------------    -------------------------------------

Social Security or other
Taxpayer Identification
Number, if any
                                         -------------------------------------

                                     A-15
<PAGE>

Transfer Instructions for Pledged Senior Deferrable Notes Transferable Upon
Early Settlement or a Termination Event:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                                     A-16
<PAGE>

                    [TO BE ATTACHED TO GLOBAL CERTIFICATES]

           SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:

<TABLE>
<CAPTION>
============================================================================================================================
                                                                     Number of PEPS Units
                    Amount of decrease in   Amount of decrease in      evidenced by this
                    Number of PEPS Units    Number of PEPS Units      Global Certificate          Signature of authorized
                     evidenced by the        evidenced by the           following such             officer of Trustee or
       Date         Global Certificate      Global Certificate       decrease or increase           Securities Custodian
<S>                 <C>                     <C>                      <C>                          <C>
-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------

=============================================================================================================================
</TABLE>

                                     A-17
<PAGE>

                                   EXHIBIT B

                       FACE OF TREASURY PEPS CERTIFICATE

     THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A
NOMINEE OF THE DEPOSITARY.  THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO
TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No.  _____                                        Cusip No. 373298884
Number of Treasury PEPS Units _________

                          GEORGIA-PACIFIC CORPORATION
                              TREASURY PEPS UNITS

     This Treasury PEPS Units Certificate certifies that Cede & Co. is the
registered Holder of the number of Treasury PEPS Units set forth above.  Each
Treasury PEPS Unit consists of (i) a 1/20 undivided beneficial ownership
interest of a Treasury Security having a principal amount at maturity equal to
$1,000, subject to the Pledge of such Treasury Security by such Holder pursuant
to the Pledge Agreement, and (ii) the rights and obligations of the Holder under
one Purchase Contract with Georgia-Pacific Corporation, a Georgia corporation
(the "Company").  All capitalized terms used herein which are defined in the
Purchase Contract Agreement (as defined on the reverse hereof) have the meaning
set forth therein.
<PAGE>

     Pursuant to the Pledge Agreement, the Treasury Securities constituting part
of each Treasury PEPS Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising part of such Treasury PEPS Unit.

     Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PEPS Units Certificate to purchase, and the Company, to sell, on the
Purchase Contract Settlement Date, at a price equal to $50 (the "Stated
Amount"), a number of shares of Georgia-Pacific Group Common Stock, par value
$.80 per share ("Georgia-Pacific Group Stock"), equal to the Settlement Rate,
unless prior to or on the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement with respect to the Treasury
PEPS Unit of which such Purchase Contract is a part, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof.  The
purchase price (the "Purchase Price") for the shares of Georgia-Pacific Group
Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of the proceeds from the Treasury Securities at maturity pledged to secure the
obligations of the Holder under such Purchase Contract of the Treasury PEPS Unit
of which such Purchase Contract is a part.

     The Company shall pay, quarterly in arrears on February 16, May 16, August
16 and November 16, commencing November 16, 1999 (each, a "Payment Date"), in
respect of each Purchase Contract evidenced hereby an amount (the "Purchase
Contract Payments") equal to .% per annum of the Stated Amount.  Such Purchase
Contract Payments shall be payable to the Person in whose name this Treasury
PEPS Units Certificate (or a Predecessor Treasury PEPS Units Certificate) is
registered at the close of business on the Record Date for such Payment Date.
The Company may, at its option, defer Purchase Contract Payments.

     Purchase Contract Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Treasury PEPS Units Register.

     Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this Treasury PEPS Units
Certificate shall not be entitled to any benefit under the Pledge Agreement or
the Purchase Contract Agreement or be valid or obligatory for any purpose.

                                      B-2
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                           GEORGIA-PACIFIC CORPORATION

                                           By:  _______________________________
                                                Name:
                                                Title:

                                           By:  _______________________________
                                                Name:
                                                Title:

                                           HOLDER SPECIFIED ABOVE (as to
                                           obligations of such Holder under
                                           the Purchase Contracts)

                                           By:  The First National Bank of
                                                Chicago, not individually but
                                                solely as Attorney-in-Fact
                                                of such Holder

                                           By:  _______________________________
                                                Name:
                                                Title:

Dated:

                                      B-3
<PAGE>

                       CERTIFICATE OF AUTHENTICATION OF
                            PURCHASE CONTRACT AGENT

     This is one of the Treasury PEPS Units referred to in the within-mentioned
Purchase Contract Agreement.

                                               By:  THE FIRST NATIONAL BANK OF
                                                    CHICAGO, as Purchase
                                                    Contract Agent

                                               By:  ____________________________
                                                         Authorized Officer

Dated:

                                      B-4
<PAGE>

                 (REVERSE OF TREASURY PEPS UNITS CERTIFICATE)

     Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of July 7, 1999 (as may be supplemented from time to time,
the "Purchase Contract Agreement") between the Company and The First National
Bank of Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Purchase Contract Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company and
the Holders and of the terms upon which the Treasury PEPS Units Certificates
are, and are to be, executed and delivered.

     Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PEPS Units Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price") a number of shares of Georgia-Pacific Group Stock equal to the
Settlement Rate, unless prior to the Purchase Contract Settlement Date, there
shall have occurred a Termination Event with respect to the Security of which
such Purchase Contract is a part or an Early Settlement shall have occurred.
The "Settlement Rate" is equal to:

          (1) if the Applicable Market Value (as defined below) is equals or
     exceeds $. (the "Threshold Appreciation Price"), . shares of Georgia-
     Pacific Group Stock per Purchase Contract;

          (2) if the Applicable Market Value is less than the Threshold
     Appreciation Price but greater than $. (the "Reference Price"), the number
     of shares of Georgia-Pacific Group Stock per Purchase Contract having a
     value, based on the Applicable Market Value, equal to the Stated Amount;
     and

          (3) if the Applicable Market Amount is less than or equal to the
     Reference Price, . shares of Georgia-Pacific Group Stock per Purchase
     Contract,

in each case subject to adjustment as provided in the Purchase Contract
Agreement.

     No fractional shares of Georgia-Pacific Group Stock will be issued upon
settlement of Purchase Contracts, as provided in Section 5.11 of the Purchase
Contract Agreement.

     Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Treasury PEPS Unit to purchase at the Purchase Price for cash, and the Company
to sell, a number of shares of Georgia-Pacific Group Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.

     The "Applicable Market Value" means the average of the Closing Prices per
share of Georgia-Pacific Group Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.

                                      B-5
<PAGE>

     The "Closing Price" per share of Georgia-Pacific Group Stock on any date of
determination means the:

          (1) closing sale price (or, if no closing price is reported, the last
     reported sale price) per share on the New York Stock Exchange, Inc. (the
     "NYSE") on such date;

          (2) if Georgia-Pacific Group Stock is not listed for trading on the
     NYSE on any such date, the closing sale price per share as reported in the
     composite transactions for the principal United States securities exchange
     on which Georgia-Pacific Group Stock is so listed;

          (3) if Georgia-Pacific Group Stock is not so listed on a United States
     national or regional securities exchange, the closing sale price per share
     as reported by The Nasdaq Stock Market, Inc.;

          (4) if Georgia-Pacific Group Stock is not so reported, the last quoted
     bid price for Georgia-Pacific Group Stock in the over-the-counter market as
     reported by the National Quotation Bureau or similar organization; or

          (5) if such bid price is not available, the average of the mid-point
     of the last bid and ask prices of Georgia-Pacific Group Stock on such date
     from at least three nationally recognized independent investment banking
     firms retained for this purpose by the Company.

     A "Trading Day" means a day on which Georgia-Pacific Group Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Georgia-Pacific Group Stock.

     In accordance with the terms of the Purchase Contract Agreement, the Holder
of this Treasury PEPS Unit shall pay the Purchase Price for the shares of
Georgia-Pacific Group Stock purchased pursuant to each Purchase Contract
evidenced hereby either by effecting a Cash Settlement or an Early Settlement of
each such Purchase Contract or by applying a principal amount of the Pledged
Treasury Securities underlying such Holder's Treasury PEPS Unit equal to the
Stated Amount of such Purchase Contract to the purchase of the Georgia-Pacific
Group Stock.  A Holder of Treasury PEPS Unit who does not effect, prior to or on
11:00 a.m. (New York City time) on the Business Day immediately preceding the
Purchase Contract Settlement Date, an effective Cash Settlement or an Early
Settlement, shall pay the Purchase Price for the shares of Georgia-Pacific Group
Stock to be issued under the related Purchase Contract from the proceeds of the
Pledged Treasury Securities.

     The Company shall not be obligated to issue any shares of Georgia-Pacific
Group Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment of the aggregate
purchase price for the shares of Georgia-Pacific Group Stock to be purchased
thereunder in the manner herein set forth.

                                      B-6
<PAGE>

     In the event the Company sells, transfers, assigns or otherwise  disposes
of all of the properties and assets of the Georgia-Pacific Group and determines
to redeem all of the outstanding shares of Georgia-Pacific Group Stock, or
redeems all of the shares of Georgia-Pacific Group Stock for shares of common
stock of one or more of its wholly owned subsidiaries which own all of the
assets and liabilities attributed to the Georgia-Pacific Group, the Purchase
Contract Settlement Date and Remarketing Date shall be accelerated to five
Business Days immediately preceding the Redemption Date or Spin-Off Date, as the
case may be.

     The Treasury PEPS Units Certificates are issuable only in registered form
and only in denominations of a single Treasury PEPS and any integral multiple
thereof.  The transfer of any Treasury PEPS Certificate will be registered and
Treasury PEPS Certificates may be exchanged as provided in the Purchase Contract
Agreement.  The Treasury PEPS Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement.  No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.  A Holder who elects to
substitute Senior Deferrable Notes for Treasury Securities, thereby recreating
PEPS Units, shall be responsible for any fees or expenses associated therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract underlying a Treasury PEPS Unit remains in effect, such
Treasury PEPS Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Treasury PEPS Unit in respect of
the Treasury Security and the Purchase Contract constituting such Treasury PEPS
Unit may be transferred and exchanged only as a Treasury PEPS Unit.

     A Holder of Treasury PEPS Units may recreate PEPS Units by delivering to
the Collateral Agent Senior Deferrable Notes with a principal amount, in the
case of such Senior Deferrable Notes, equal to the aggregate principal amount at
maturity of the Pledged Treasury Securities in exchange for the release of such
Pledged Treasury Securities in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.  From and after such substitution,
the Holder's Security shall be referred to as a "PEPS Unit".  Such substitution
may cause the equivalent aggregate principal amount of this Certificate to be
increased or decreased; provided, however, this Treasury PEPS Units Certificate
shall not represent more than 4,000,000 Treasury PEPS Units.  All such
adjustments to the equivalent aggregate principal amount of this Treasury PEPS
Units Certificate shall be duly recorded by placing an appropriate notation on
the Schedule attached hereto.

     A Holder of PEPS Units may recreate Treasury PEPS Units by delivering to
the Collateral Agent Treasury Securities in an aggregate principal amount equal
to the aggregate principal amount at maturity of the Pledged Senior Deferrable
Notes in exchange for the release of such Pledged Senior Deferrable Notes in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.  Any such recreation of Treasury PEPS Units may be effected only in
multiples of 20 PEPS Units for 20 Treasury PEPS Units.

                                      B-7<PAGE>

                                                                    EXHIBIT 4(p)

================================================================================

                          GEORGIA-PACIFIC CORPORATION

                                      and

                THE CHASE MANHATTAN BANK , as Collateral Agent

                                      and

             THE CHASE MANHATTAN BANK, as Securities Intermediary

                                      and

        THE FIRST NATIONAL BANK OF CHICAGO, as Purchase Contract Agent

                               PLEDGE AGREEMENT

                           Dated as of July 7, 1999

================================================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                       Page
<S>                                                                                    <C>
Section 1.  Definitions................................................................   1

Section 2.  Pledge.....................................................................   5
       2.1  Pledge.....................................................................   5
       2.2  Control; Financing Statement...............................................   5
       2.3  Termination................................................................   5

Section 3.  Distributions on Pledged Collateral........................................   5
       3.1  Income Distributions.......................................................   5
       3.2  Principal Payments Following Termination Event.............................   6
       3.3  Principal Payments Prior To or On Purchase Contract Settlement Date........   6
       3.4  Payments to Purchase Contract Agent........................................   6
       3.5  Assets Not Properly Released...............................................   6

Section 4.  Control....................................................................   7
       4.1  Establishment of Collateral Account........................................   7
       4.2  Treatment as Financial Assets..............................................   7
       4.3  Sole Control by Collateral Agent...........................................   7
       4.4  Securities Intermediary's Location.........................................   7
       4.5  No Other Claims............................................................   8
       4.6  Investment and Release.....................................................   8
       4.7  Statements and Confirmations...............................................   8
       4.8  Tax Allocations............................................................   8
       4.9  No Other Agreements........................................................   8
       4.10 Powers Coupled With An Interest............................................   8

Section 5.  Initial Deposit; Establishment of Treasury PEPS Units and Reestablishment
       of PEPS Units...................................................................   8
       5.1  Initial Deposit of Senior Deferrable Notes.................................   9
       5.2  Establishment of Treasury PEPS Units.......................................   9
       5.3  Reestablishment of PEPS Units..............................................   9
       5.4  Termination Event..........................................................  10
       5.5  Cash Settlement............................................................  11
       5.6  Early Settlement...........................................................  12
       5.7  Application of Proceeds Settlement.........................................  13

Section 6.  Voting Rights..............................................................  14
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                      <C>
Section 7.  Rights and Remedies........................................................  14
       7.1  Rights and Remedies of the Collateral Agent................................  14
       7.2  Substitutions..............................................................  15

Section 8.  Representations and Warranties; Covenants..................................  15
       8.1  Representations and Warranties.............................................  15
       8.2  Covenants..................................................................  16

Section 9.  The Collateral Agent and the Securities Intermediary.......................  16
       9.1  Appointment, Powers and Immunities.........................................  16
       9.2  Instructions of the Company................................................  17
       9.3  Reliance by Collateral Agent and Securities Intermediary...................  18
       9.4  Rights in Other Capacities.................................................  18
       9.5  Non-Reliance on Collateral Agent and Securities Intermediary...............  18
       9.6  Compensation and Indemnity.................................................  18
       9.7  Failure to Act.............................................................  19
       9.8  Resignation of Collateral Agent and Securities Intermediary................  19
       9.9  Right to Appoint Agent or Advisor..........................................  20
       9.10 Survival...................................................................  21
       9.11 Exculpation................................................................  21

Section 10.  Amendment.................................................................  21
       10.1  Amendment Without Consent of Holders......................................  21
       10.2  Amendment With Consent of Holders.........................................  21
       10.3  Execution of Amendments...................................................  22
       10.4  Effect of Amendments......................................................  22
       10.5  Reference to Amendments...................................................  23

Section 11.  Miscellaneous.............................................................  23
       11.1  No Waiver.................................................................  23
       11.2  Governing Law.............................................................  23
       11.3  Notices...................................................................  23
       11.4  Successors and Assigns....................................................  24
       11.5  Counterparts..............................................................  24
       11.6  Severability..............................................................  24
       11.7  Expenses, etc.............................................................  24
       11.8  Security Interest Absolute................................................  24
</TABLE>

EXHIBIT A   Instruction from Purchase Contract Agent to Collateral Agent
            (Establishment of Treasury PEPS Units)
EXHIBIT B   Instruction from Collateral Agent to Securities Intermediary
            (Establishment of Treasury PEPS Units)

                                     -ii-
<PAGE>

EXHIBIT C   Instruction from Purchase Contract Agent to Collateral Agent
            (Reestablishment of PEPS Units)
EXHIBIT D   Instruction from Collateral Agent to Securities Intermediary
            (Reestablishment of PEPS Units)
EXHIBIT E   Notice of Cash Settlement from the Securities Intermediary to the
            Purchase Contract Agent

                                     -iii-
<PAGE>

                               PLEDGE AGREEMENT

     PLEDGE AGREEMENT, dated as of July 7, 1999, among Georgia-Pacific
Corporation, a Georgia corporation (the "Company"), The Chase Manhattan Bank, as
collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), The Chase Manhattan Bank, as securities
intermediary with respect to the Collateral Account (in such capacity, together
with its successors in such capacity, the "Securities Intermediary"), and The
First National Bank of Chicago, as purchase contract agent and as attorney-in-
fact of the Holders from time to time of the Securities (in such capacity,
together with its successors in such capacity, the "Purchase Contract Agent")
under the Purchase Contract Agreement.

                                   RECITALS

     The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement dated as of the date hereof (as modified and supplemented and
in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to 17,250,000 Premium Equity Participating Security
Units--PEPS_ Units (the "Securities").

     Each PEPS Unit, at issuance, consists of a unit comprised of (a) a stock
purchase contract (the "Purchase Contract") under which (i) the Holder will
purchase from the Company on the Purchase Contract Settlement Date, for an
amount equal to $50 (the "Stated Amount"), a number of shares of Georgia-Pacific
Corporation--Georgia-Pacific Group Common Stock ("Georgia-Pacific Group Stock")
equal to the Settlement Rate, and (ii) the Company will pay the Holder Purchase
Contract Payments and (b) a senior deferrable note of the Company (a "Senior
Deferrable Note"), having a principal amount equal to the Stated Amount and
maturing on August 16, 2004.

     Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders of the Securities have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral Account to secure the
Obligations.

     Accordingly, the Company, the Collateral Agent, the Securities Intermediary
and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of
the Holders from time to time of the Securities, agree as follows:

Section 1.  Definitions.
            -----------

     For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

     (a)  the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
<PAGE>

                                                                               2

     (b)  the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;

     (c)  the following terms which are defined in the UCC shall have the
meanings set forth therein: "certificated security", "control", "financial
asset", "entitlement order", "securities account" and "security entitlement";

     (d)  the following terms have the meanings assigned to them in the Purchase
Contract Agreement: "Act", "Bankruptcy Code", "Board Resolution", "Business
Day", "Cash Settlement", "Certificate", "Early Settlement", "Early Settlement
Amount", "Early Settlement Date", "Holders", "Indenture", "Opinion of Counsel",
"Outstanding Securities", "PEPS Units", "Person", "Purchase Contract", "Purchase
Contract Payments", "Purchase Contract Settlement Date", "Purchase Price",
"Remarketing Agent", "Remarketing Agreement", "Senior Trustee", "Settlement
Rate", "Termination Event", "Treasury PEPS Units", and "Underwriting Agreement";

     (e)  the following terms have the meanings given to them in this section
1(e):

          "Agreement" means this Pledge Agreement, as the same may be amended,
     modified or supplemented from time to time.

          "Cash" means any coin or currency of the United States as at the time
     shall be legal tender for payment of public and private debts.

          "Collateral Account" means the collective reference to:

          (1)  Securities Account No. . entitled "The Chase Manhattan Bank, as
     Collateral Agent, Securities Account (Georgia-Pacific Corporation)"
     maintained by the Securities Intermediary for the Purchase Contract Agent
     on behalf of and as attorney-in-fact for the Holders;

          (2)  all investment property and other financial assets from time to
     time credited to the Collateral Account, including, without limitation, (A)
     Senior Deferrable Notes and security entitlements relating thereto which
     are a component of the PEPS Units from time to time, (B) any Treasury
     Securities and security entitlements relating thereto delivered from time
     to time upon establishment of Treasury PEPS Units in accordance with
     Section 5.2 hereof and (C) payments made by Holders pursuant to Section 5.5
     hereof (collectively, the "Collateral");

          (3)  all Proceeds of any of the foregoing (whether such Proceeds arise
     before or after the commencement of any proceeding under any applicable
     bankruptcy, insolvency or other similar law, by or against the pledgor or
     with respect to the pledgor); and
<PAGE>

                                                                               3

          (4)  all powers and rights now owned or hereafter acquired under or
     with respect to the Collateral Account.

          "Company" means the Person named as the "Company" in the first
     paragraph of this instrument until a successor shall have become such, and
     thereafter "Company" shall mean such successor.

          "Obligations" means, with respect to each Holder, the collective
     reference to all obligations and liabilities of such Holder under such
     Holder's Purchase Contract and this Agreement or any other document made,
     delivered or given in connection herewith or therewith, in each case
     whether on account of principal, interest (including, without limitation,
     interest accruing before and after the filing of any petition in
     bankruptcy, or the commencement of any insolvency, reorganization or like
     proceeding, relating to such Holder, whether or not a claim for post-filing
     or post-petition interest is allowed in such proceeding), fees,
     indemnities, costs, expenses or otherwise (including, without limitation,
     all fees and disbursements of counsel to the Company or the Collateral
     Agent or the Securities Intermediary that are required to be paid by the
     Holder pursuant to the terms of any of the foregoing agreements).

          "Permitted Investments" means any one of the following which shall
     mature not later than the next succeeding Business Day:

          (1)  any evidence of indebtedness with an original maturity of 365
     days or less issued, or directly and fully guaranteed or insured, by the
     United States of America or any agency or instrumentality thereof (provided
     that the full faith and credit of the United States of America is pledged
     in support of the timely payment thereof or such indebtedness constitutes a
     general obligation of it);

          (2)  deposits, certificates of deposit or acceptances with an original
     maturity of 365 days or less of any institution which is a member of the
     Federal Reserve System having combined capital and surplus and undivided
     profits of not less than $200.0 million at the time of deposit;

          (3)  investments with an original maturity of 365 days or less of any
     Person that is fully and unconditionally guaranteed by a bank referred to
     in clause (2);

          (4)  repurchase agreements and reverse repurchase agreements relating
     to marketable direct obligations issued or unconditionally guaranteed by
     the United States Government or issued by any agency thereof and backed as
     to timely payment by the full faith and credit of the United States
     Government;

          (5)  investments in commercial paper, other than commercial paper
     issued by the Company or its affiliates, of any corporation incorporated
     under the laws of the
<PAGE>

                                                                               4

     United States or any State thereof, which commercial paper has a rating at
     the time of purchase at least equal to "A-1" by Standard & Poor's Ratings
     Services ("S&P") or at least equal to "P-1" by Moody's Investors Service,
     Inc. ("Moody's"); and

          (6)  investments in money market funds registered under the Investment
     Company Act of 1940, as amended, rated in the highest applicable rating
     category by S&P or Moody's.

          "Pledge" means the lien and security interest created by this
     Agreement.

          "Pledged Senior Deferrable Notes" means the Senior Deferrable Notes
     and security entitlements with respect thereto from time to time credited
     to the Collateral Account and not then released from the Pledge.

          "Pledged Treasury Securities" means Treasury Securities and security
     entitlements with respect thereto from time to time credited to the
     Collateral Account and not then released from the Pledge.

          "Proceeds" has the meaning ascribed thereto in the UCC and includes,
     without limitation, all interest, dividends, cash, instruments, securities,
     financial assets (as defined in (S) 8-102(a)(9) of the UCC) and other
     property received, receivable or otherwise distributed upon the sale,
     exchange, collection or disposition of any financial assets from time to
     time held in the Collateral Account.

          "Purchase Contract Agent" has the meaning specified in the paragraph
     preceding the recitals of this Agreement.

          "TRADES" means the Treasury/Reserve Automated Debt Entry System
     maintained by the Federal Reserve Bank of New York pursuant to the TRADES
     Regulations.

          "TRADES Regulations" means the regulations of the United States
     Department of the Treasury, published at 31 C.F.R. Part 357, an amended
     from time to time.  Unless otherwise defined herein, all terms defined in
     the TRADES Regulations are used herein as therein defined.

          "Transfer" means:

          (1)  in the case of certificated securities in registered form,
     delivery as provided in (S) 8-301(a) of the UCC, indorsed to the transferee
     or in blank by an effective indorsement;

          (2)  in the case of Treasury Securities, registration of the
     transferee as the owner of such Treasury Securities on TRADES; and
<PAGE>

                                                                               5

          (3)  in the case of security entitlements, including, without
     limitation, security entitlements with respect to Treasury Securities, a
     securities intermediary indicating by book entry that such security
     entitlement has been credited to the transferee's securities account.

          "Treasury Securities" means zero-coupon U.S. Treasury Securities
     (Cusip No. 912820BE6) which are the principal strips of the .% U.S.
     Treasury Securities which mature on August 15, 2002.

          "UCC" means the Uniform Commercial Code as in effect in the State of
     New York from time to time.

          "Value" means, with respect to any item of Collateral on any date, as
     to (1) Cash, the face amount thereof and (2) Treasury Securities or Senior
     Deferrable Notes, in each case the aggregate principal amount thereof at
     maturity.

Section 2.  Pledge.
            ------

     Section 2.1  Pledge.
                  ------

     Each Holder, acting through the Purchase Contract Agent as such Holder's
attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of
and for the benefit of the Company, a continuing first priority security
interest in and to, and a lien upon and right of set off against, all of such
Holder's right, title and interest in and to the Collateral Account to secure
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations. The Collateral Agent
shall have all of the rights, remedies and recourses with respect to the
Collateral afforded a secured party by the UCC, in addition to, and not in
limitation of, the other rights, remedies and recourses afforded to the
Collateral Agent by this Agreement.

     Section 2.2  Control; Financing Statement.
                  ----------------------------

     (a)  The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Section 4 of this Agreement.

     (b)  On the date of initial issuance of the Securities, the Purchase
Contract Agent shall deliver to the Collateral Agent a financing statement
prepared by the Company for filing in the Office of the Secretary of State of
the State of New York, signed by the Purchase Contract Agent, as attorney-in-
fact for the Holders, as Debtors, and describing the Collateral.

     Section 2.3  Termination.
                  -----------
<PAGE>

                                                                               6

     As to each Holder, this Agreement and the Pledge created hereby shall
terminate upon the satisfaction of such Holder's Obligations. Upon termination,
the Securities Intermediary shall Transfer the Collateral to the Purchase
Contract Agent for distribution to such Holder in accordance with his interest,
free and clear of any lien, pledge or security interest created hereby.

Section 3.  Distributions on Pledged Collateral.
            -----------------------------------

     Section 3.1  Income Distributions.
                  --------------------

     All income distributions received by the Securities Intermediary on account
of the Senior Deferrable Notes or Permitted Investments from time to time held
in the Collateral Account shall be distributed to the Purchase Contract Agent
for the benefit of the applicable Holders as provided in the Purchase Contracts.

     Section 3.2  Principal Payments Following Termination Event.
                  ----------------------------------------------

     All payments received by the Securities Intermediary following a
Termination Event of (1) the principal amount of Pledged Senior Deferrable Notes
or (2) the principal amount of the Pledged Treasury Securities, shall be
distributed to the Purchase Contract Agent for the benefit of the applicable
Holders for distribution to such Holders in accordance with their respective
interests.

     Section 3.3  Principal Payments Prior To or On Purchase Contract
                  ---------------------------------------------------
Settlement Date.
---------------

     (a)  Subject to the provisions of Section 7.2, and except as provided in
clause 3.3(b) below, if no Termination Event shall have occurred, all payments
received by the Securities Intermediary of (1) the principal amount with respect
to the Pledged Senior Deferrable Notes or (2) the principal amount of Pledged
Treasury Securities, shall be held and invested in Permitted Investments until
the Purchase Contract Settlement Date and on the Purchase Contract Settlement
Date distributed to the Company as provided in Section 5.7 hereof. Any balance
remaining in the Collateral Account shall be distributed to the Purchase
Contract Agent for the benefit of the applicable Holders for distribution to
such Holders in accordance with their respective interests.

     (b)  All payments received by the Securities Intermediary of (A) the
principal amount of Senior Deferrable Notes or security entitlements thereto or
(1) the principal amount of Treasury Securities or security entitlements
thereto, that, in each case, have been released from the Pledge shall be
distributed to the Purchase Contract Agent for the benefit of the applicable
Holders for distribution to such Holders in accordance with their respective
interests.

     Section 3.4  Payments to Purchase Contract Agent.
                  -----------------------------------

     Payments to the Purchase Contract Agent hereunder shall be made to the
account designated by the Purchase Contract Agent for such purpose not later
than 12:00 p.m. (New York
<PAGE>

                                                                               7

City time) on the Business Day such payment is received by the Securities
Intermediary; provided, however, that if such payment is received on a day that
is not a Business Day or after 12:00 p.m. (New York City time) on a Business
Day, then such payment shall be made no later than 10:30 a.m. (New York City
time) on the next succeeding Business Day.

     Section 3.5  Assets Not Properly Released.
                  ----------------------------

     If the Purchase Contract Agent or any Holder shall receive any principal
payments on account of financial assets credited to the Collateral Account and
not released therefrom in accordance with this Agreement, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for the
benefit of the Company and, upon receipt of an Officers' Certificate (as defined
in the Purchase Contract Agreement) of the Company so directing, promptly
deliver the same to the Securities Intermediary for credit to the Collateral
Account or to the Company for application to the obligations of the Holders
under the related Purchase Contracts, and the Purchase Contract Agent and
Holders shall acquire no right, title or interest in any such payments of
principal amounts so received.

Section 4.  Control.
            -------

     Section 4.1  Establishment of Collateral Account.
                  -----------------------------------

     The Securities Intermediary hereby confirms that:

          (1)  the Securities Intermediary has established the Collateral
     Account;

          (2)  the Collateral Account is a securities account;

          (3)  subject to the terms of this Agreement, the Securities
     Intermediary shall treat the Purchase Contract Agent as entitled to
     exercise the rights that comprise any financial asset credited to the
     Collateral Account;

          (4)  all property delivered to the Securities Intermediary pursuant to
     this Agreement or the Purchase Contract Agreement will be credited promptly
     to the Collateral Account;

          (5)  all securities or other property underlying any financial assets
     credited to the Collateral Account shall be registered in the name of the
     Securities Intermediary, indorsed to the Securities Intermediary, or in
     blank or credited to another securities account maintained in the name of
     the Securities Intermediary, and in no case will any financial asset
     credited to the Collateral Account be registered in the name of the
     Purchase Contract Agent or any Holder, payable to the order of the Purchase
     Contract Agent or any Holder or specially indorsed to the Purchase Contract
     Agent or any Holder.

     Section 4.2  Treatment as Financial Assets.
                  -----------------------------
<PAGE>

                                                                               8

     Each item of property (whether investment property, financial asset,
security, instrument or cash) credited to the Collateral Account shall be
treated as a financial asset.

     Section 4.3  Sole Control by Collateral Agent.
                  --------------------------------

     Except as provided in Section 6, at all times prior to the termination of
the Pledge, the Collateral Agent shall have sole control of the Collateral
Account, and the Securities Intermediary shall take instructions and directions
with respect to the Collateral Account solely from the Collateral Agent. If at
any time the Securities Intermediary shall receive an entitlement order issued
by the Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Until termination
of the Pledge, the Securities Intermediary will not comply with any entitlement
orders issued by the Purchase Contract Agent or any Holder.

     Section 4.4  Securities Intermediary's Location.
                  ----------------------------------

     The Collateral Account, and the rights and obligations of the Securities
Intermediary, the Collateral Agent, the Purchase Contract Agent and the Holders
with respect thereto, shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's location.

     Section 4.5  No Other Claims.
                  ---------------

     Except for the claims and interest of the Collateral Agent and of the
Purchase Contract Agent and the Holders in the Collateral Account, the
Securities Intermediary does not know of any claim to, or interest in, the
Collateral Account or in any financial asset credited thereto. If any person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the
Collateral Account or in any financial asset carried therein, the Securities
Intermediary will promptly notify the Collateral Agent and the Purchase Contract
Agent.

     Section 4.6  Investment and Release.
                  ----------------------

     All proceeds of financial assets from time to time deposited in the
Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement or
upon written instructions of the Collateral Agent.

     Section 4.7  Statements and Confirmations.
                  ----------------------------

     The Securities Intermediary will promptly send copies of all statements,
confirmations and other correspondence concerning the Collateral Account and any
financial assets credited
<PAGE>

                                                                               9

thereto simultaneously to each of the Purchase Contract Agent and the Collateral
Agent at their addresses for notices under this Agreement.

     Section 4.8  Tax Allocations.
                  ---------------

     All items of income, gain, expense and loss recognized in the Collateral
Account shall be reported to the Internal Revenue Service and all state and
local taxing authorities under the names and taxpayer identification numbers of
the holders which are the beneficial owners thereof.

     Section 4.9  No Other Agreements.
                  -------------------

     The Securities Intermediary has not entered into, and prior to the
termination of the Pledge will not enter into, any agreement with any other
Person relating to the Collateral Account or any financial assets credited
thereto, including, without limitation, any agreement to comply with entitlement
orders of any Person other than the Collateral Agent.

     Section 4.10 Powers Coupled With An Interest.
                  -------------------------------

     The rights and powers granted in this Section 4 to the Collateral Agent
have been granted in order to perfect its security interests in the Collateral
Account, are powers coupled with an interest and will be affected neither by the
bankruptcy of the Purchase Contract Agent or any Holder nor by the lapse of
time. The obligations of the Securities Intermediary under this Section 4 shall
continue in effect until the termination of the Pledge.

Section 5.  Initial Deposit; Establishment of Treasury PEPS Units and
            ---------------------------------------------------------
Reestablishment of PEPS Units.
-----------------------------

     Section 5.1  Initial Deposit of Senior Deferrable Notes.
                  ------------------------------------------

     Prior to or concurrently with the execution and delivery of this Agreement,
the Purchase Contract Agent, on behalf of the initial Holders of the PEPS Units,
shall Transfer to the Securities Intermediary, for credit to the Collateral
Account, the Senior Deferrable Notes or security entitlements relating thereto,
and the Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Senior Deferrable Notes has been credited to the Collateral
Account.

     Section 5.2  Establishment of Treasury PEPS Units.
                  ------------------------------------

     (a)  At any time prior to or on the seventh Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of PEPS Units shall
have the right to establish or reestablish Treasury PEPS Units by substitution
of Treasury Securities or security entitlements thereto for the Pledged Senior
Deferrable Notes comprising a part of such Holder's PEPS Units in integral
multiples of 20 PEPS Units by:
<PAGE>

                                                                              10

          (1)  transferring to the Securities Intermediary for credit to the
     Collateral Account Treasury Securities or security entitlements thereto
     having a Value equal to the principal amount of the Pledged Senior
     Deferrable Notes to be released, accompanied by a notice, substantially in
     the form of Exhibit C to the Purchase Contract Agreement, whereupon the
     Purchase Contract Agent shall deliver to the Collateral Agent a notice,
     substantially in the form of Exhibit A hereto, (A) stating that such Holder
     has Transferred Treasury Securities or security entitlements thereto to the
     Securities Intermediary for credit to the Collateral Account, (B) stating
     the Value of the Treasury Securities or security entitlements thereto
     Transferred by such Holder and (C) requesting that the Collateral Agent
     release from the Pledge the Pledged Senior Deferrable Notes that are a
     component of such PEPS Units; and

          (2)  delivering the related PEPS Units to the Purchase Contract Agent.

Upon receipt of such notice and confirmation that Treasury Securities or
security entitlements thereto have been credited to the Collateral Account as
described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice, substantially in the form of Exhibit B hereto, to
release such Pledged Senior Deferrable Notes from the Pledge by Transfer to the
Purchase Contract Agent for distribution to such Holder, free and clear of any
lien, pledge or security interest created hereby.

     (b)  Upon credit to the Collateral Account of Treasury Securities or
security entitlements thereto delivered by a Holder of PEPS Units and receipt of
the related instruction from the Collateral Agent, the Securities Intermediary
shall release the Pledged Senior Deferrable Notes and shall promptly transfer
the same to the Purchase Contract Agent for distribution to such Holder, free
and clear of any lien, pledge or security interest created hereby.

     Section 5.3  Reestablishment of PEPS Units.
                  -----------------------------

     (a)  At any time prior to or on the seventh Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of Treasury PEPS Units
shall have the right to reestablish PEPS Units by substitution of Senior
Deferrable Notes or security entitlements thereto for Pledged Treasury
Securities in integral multiples of 20 Treasury PEPS Units by:

          (1)  transferring to the Securities Intermediary for credit to the
     Collateral Account Senior Deferrable Notes or security entitlements thereto
     having a principal amount equal to the Value of the Pledged Treasury
     Securities to be released, accompanied by a notice, substantially in the
     form of Exhibit C to the Purchase Contract Agreement, whereupon the
     Purchase Contract Agent shall deliver to the Collateral Agent a notice,
     substantially in the form of Exhibit C hereto, (A) stating that such Holder
     has Transferred Senior Deferrable Notes or security entitlements thereto to
     the Securities Intermediary for credit to the Collateral Account and (B)
     requesting that the Collateral
<PAGE>

                                                                              11

     Agent release from the Pledge the Pledged Treasury Securities related to
     such Treasury PEPS Units; and

          (2)  delivering the related Treasury PEPS Units to the Purchase
     Contract Agent.

Upon receipt of such notice and confirmation that Senior Deferrable Notes or
security entitlements thereto have been credited to the Collateral Account as
described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice in the form provided in Exhibit D hereto to release
such Pledged Treasury Securities from the Pledge by Transfer to the Purchase
Contract Agent for distribution to such Holder.

     (b)  Upon credit to the Collateral Account of Senior Deferrable Notes or
security entitlements thereto, and receipt of the related instruction from the
Collateral Agent, the Securities Intermediary shall release the applicable
Pledged Treasury Securities and shall promptly Transfer the same to the Purchase
Contract Agent for distribution to such Holder, free and clear of any lien,
pledge or security interest created hereby.

     Section 5.4  Termination Event.
                  -----------------

     (a)  Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:

          (1)  any Pledged Senior Deferrable Notes; and

          (2)  any Pledged Treasury Securities,

to the Purchase Contract Agent for the benefit of the Holders for distribution
to such Holders in accordance with their respective interests, free and clear of
any lien, pledge or security interest or other interest created hereby.

     (b)  If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Senior Deferrable Notes or the Pledged Treasury Securities, as the case may be,
as provided by this Section 5.4, the Purchase Contract Agent shall:

          (1)  use its best efforts to obtain an opinion of a nationally
     recognized law firm reasonably acceptable to the Collateral Agent to the
     effect that, as a result of the Company's being the debtor in such a
     bankruptcy case, the Collateral Agent will not be prohibited from releasing
     or Transferring the Collateral as provided in this Section 5.4, and shall
     deliver such opinion to the Collateral Agent within ten days after the
     occurrence of such Termination Event, and if (A) the Purchase Contract
     Agent shall be unable to
<PAGE>

                                                                              12

     obtain such opinion within ten days after the occurrence of such
     Termination Event or (B) the Collateral Agent shall continue, after
     delivery of such opinion, to refuse to effectuate the release and Transfer
     of all Pledged Senior Deferrable Notes, all the Pledged Treasury Securities
     or the Proceeds of any of the foregoing, as the case may be, as provided in
     this Section 5.4, then the Purchase Contract Agent shall within fifteen
     days after the occurrence of such Termination Event commence an action or
     proceeding in the court having jurisdiction of the Company's case under the
     Bankruptcy Code seeking an order requiring the Collateral Agent to
     effectuate the release and transfer of all Pledged Senior Deferrable Notes
     or all the Pledged Treasury Securities, as the case may be, as provided by
     this Section 5.4; or

          (2)  commence an action or proceeding like that described in clause
     5.4(b)(1)(B) hereof within ten days after the occurrence of such
     Termination Event.

     Section 5.5  Cash Settlement.
                  ---------------

     (a)  Upon receipt by the Collateral Agent of (1) a notice from the Purchase
Contract Agent promptly after the receipt by the Purchase Contract Agent of a
notice from a Holder of PEPS Units or Treasury PEP Units has elected, in
accordance with the procedures specified in Section 5.4(a)(i) or (d)(i) of the
Purchase Contract Agreement, respectively, to effect a Cash Settlement and (2)
payment by such Holder by deposit in the Collateral Account prior to or on 11:00
a.m. (New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date of the Purchase Price in lawful money of the
United States by certified or cashier's check or wire transfer of immediately
available funds payable to or upon the order of the Securities Intermediary,
then the Collateral Agent shall:

          (1)  instruct the Securities Intermediary promptly to invest any such
     Cash in Permitted Investments;

          (2)  release from the Pledge (i) in the case of a Holder of PEPS
     Units, the related Pledged Senior Deferrable Notes or (ii) in the case of a
     Holder of Treasury PEPS Units, the related Pledged Treasury Securities with
     a principal amount equal to the product of (x) the Stated Amount times (y)
     the number of Purchase Contracts as to which such Holder has elected to
     effect a Cash Settlement pursuant to this Section 5.5(a); and

          (3)  instruct the Securities Intermediary to Transfer all such Pledged
     Senior Deferrable Notes or Pledged Treasury Securities, as the case may be,
     to the Purchase Contract Agent for the benefit of such Holder, in each case
     free and clear of the Pledge created hereby, for distribution to such
     Holder.

Upon receipt of the proceeds upon the maturity of the Permitted Investments on
the Purchase Contract Settlement Date, the Collateral Agent shall (A) instruct
the Securities Intermediary to pay the portion of such proceeds and deliver any
certified or cashier's checks received, in an aggregate amount equal to the
Purchase Price, to the Company on the Purchase Contract
<PAGE>

                                                                              13

Settlement Date, and (B) instruct the Securities Intermediary to release any
amounts in respect of the interest earned from such Permitted Investments to the
Purchase Contract Agent for distribution to the such Holder.

     (b)  If a Holder of PEPS Units notifies the Purchase Contract Agent as
provided in paragraph 5.4(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.4(a)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have consented to the disposition of such Holder's Pledged
Senior Deferrable Notes in accordance with paragraph 5.4(a)(iii) of the Purchase
Contract Agreement.

     (c)  If a Holder of Treasury PEPS Units notifies the Purchase Contract
Agent as provided in paragraph 5.4(d)(i) of the Purchase Contract Agreement of
its intention to pay the Purchase Price in cash, but fails to make such payment
as required by paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such
Holder shall be deemed to have elected to pay the Purchase Price in accordance
with paragraph 5.4(d)(iii) of the Purchase Contract Agreement.

     (d)  Prior to 3:00 p.m. (New York City time) on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating (i) the amount of cash
that it has received with respect to the Cash Settlement of PEPS Units and (ii)
the amount of cash that it has received with respect to the Cash Settlement of
Treasury PEPS Units.

     Section 5.6  Early Settlement.
                  ----------------

     Upon receipt by the Collateral Agent of a notice from the Purchase Contract
Agent that a Holder of Securities has elected to effect Early Settlement of its
obligations under the Purchase Contracts forming a part of such Securities in
accordance with the terms of the Purchase Contracts and Section 5.9 of the
Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to effect Early
Settlement), and that the Purchase Contract Agent has received from such Holder,
and paid to the Company as confirmed in writing by the Company, the related
Early Settlement Amounts pursuant to the terms of the Purchase Contracts and the
Purchase Contract Agreement and that all conditions to such Early Settlement
have been satisfied, then the Collateral Agent shall release from the Pledge,
(1) Pledged Senior Deferrable Notes in the case of a Holder of PEPS Units or (2)
Pledged Treasury Securities, in the case of a Holder of Treasury PEPS Units,
with a Value equal to the product of (x) the Stated Amount times (y) the number
of Purchase Contracts as to which such Holder has elected to effect Early
Settlement, and shall instruct the Securities Intermediary to Transfer all such
Pledged Senior Deferrable Notes or Pledged Treasury Securities, as the case may
be, to the Purchase Contract Agent for the benefit of such Holder, in each case
free and clear of the Pledge created hereby, for distribution to such Holder.

     Section 5.7  Application of Proceeds Settlement.
                  ----------------------------------
<PAGE>

                                                                              14

     (a)  If a Holder of PEPS Units has not elected to make an effective Cash
Settlement by notifying the Purchase Contract Agent in the manner provided for
in Section 5.4(a)(i) in the Purchase Contract Agreement, or has given such
notice but failed to deliver the required cash prior to 11:00 A.M. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, such Holder shall be deemed to have elected to pay for the
shares of Georgia-Pacific Group Stock to be issued under such Purchase Contracts
from the Proceeds of the related Pledged Senior Deferrable Notes. In such event,
the Collateral Agent shall instruct the Securities Intermediary to Transfer the
related Pledged Senior Deferrable Notes to the Remarketing Agent for
remarketing. Upon receiving such Pledged Senior Deferrable Notes, the
Remarketing Agent, pursuant to the terms of the Remarketing Agreement, will use
reasonable efforts to remarket such Pledged Senior Deferrable Notes on such
date. The Remarketing Agent will deposit the entire amount of the Proceeds of
such remarketing in the Collateral Account. On the Purchase Contract Settlement
Date, the Collateral Agent shall instruct the Securities Intermediary to apply a
portion of the Proceeds from such remarketing equal to the aggregate principal
amount of such Pledged Senior Deferrable Notes to satisfy in full such Holder's
obligations to pay the Purchase Price to purchase the shares of Georgia-Pacific
Group Stock under the related Purchase Contracts. The Collateral Agent shall
also instruct the Securities Intermediary to apply a portion of the Proceeds of
such remarketing equal to $.1250 per Pledged Senior Deferrable Note to pay the
Remarketing Agent for its services rendered in connection with the remarketing.
The balance of the Proceeds from such remarketing, if any, shall be transferred
to the Purchase Contract Agent for the benefit of such Holder for distribution
to such Holder.

     If the Remarketing Agent advises the Collateral Agent in writing that there
has been a Failed Remarketing, thus resulting in an event of default under the
Purchase Contract Agreement and hereunder, the Collateral Agent, for the benefit
of the Company shall, at the written direction of the Company, dispose of the
Pledged Senior Deferrable Notes in accordance with applicable law and satisfy in
full, from such disposition, such Holder's obligations to pay the Purchase Price
for the shares of Georgia-Pacific Group.

     (b)  If a Holder of Treasury PEPS Units has not elected to make an
effective Cash Settlement by notifying the Purchase Contract Agent in the manner
provided for in Section 5.4(d)(i) of the Purchase Contract Agreement, or has
given such notice but failed to make such payment in the manner required by
Section 5.4(d)(ii) of the Purchase Contract Agreement, such Holder shall be
deemed to have elected to pay for the shares of Georgia-Pacific Group Stock to
be issued under such Purchase Contracts from the Proceeds of the related Pledged
Treasury Securities. Upon maturity of the Pledged Treasury Securities, the
Securities Intermediary, at the written direction of the Collateral Agent, shall
invest the Cash Proceeds of the maturing Pledged Treasury Securities in
Permitted Investments. Without receiving any instruction from any such Holder,
the Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities to the settlement of such Purchase Contracts on the Purchase Contract
Settlement Date. In the event the sum of the Proceeds from the related Pledged
Treasury Securities and the investment earnings from the investment in Permitted
Investments exceeds the aggregate Purchase Price of the Purchase Contracts being
settled thereby, the
<PAGE>

                                                                              15

Collateral Agent shall instruct the Securities Intermediary to distribute such
excess, when received, to the Purchase Contract Agent for the benefit of such
Holder for distribution to such Holder.

     Section 6.   Voting Rights.
                  -------------

     The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the Pledged Senior
Deferrable Notes or any part thereof for any purpose not inconsistent with the
terms of this Agreement and in accordance with the terms of the Purchase
Contract Agreement; provided, that the Purchase Contract Agent shall not
exercise or shall not refrain from exercising such right, as the case may be,
if, in the judgment of the Purchase Contract Agent, such action would impair or
otherwise have a material adverse effect on the value of all or any of the
Pledged Senior Deferrable Notes; and provided, further, that the Purchase
Contract Agent shall give the Company and the Collateral Agent at least five
days' prior written notice of the manner in which it intends to exercise, or its
reasons for refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Senior Deferrable
Notes, including notice of any meeting at which holders of the Senior Deferrable
Notes are entitled to vote or solicitation of consents, waivers or proxies of
holders of the Senior Deferrable Notes, the Collateral Agent shall use
reasonable efforts to send promptly to the Purchase Contract Agent such notice
or communication, and as soon as reasonably practicable after receipt of a
written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such Pledged Senior Deferrable Notes (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Senior Deferrable Notes.

Section 7.  Rights and Remedies.
            -------------------

     Section 7.1  Rights and Remedies of the Collateral Agent.
                  -------------------------------------------

     (a)  In addition to the rights and remedies specified in Section 5.5 hereof
or otherwise available at law or in equity, after an event of default (as
specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the Pledged
Senior Deferrable Notes in full satisfaction of the Holders' obligations under
the Purchase Contracts or (2) sale of the Pledged Senior Deferrable Notes in one
or more public or private sales.

     (b)  Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company
<PAGE>

                                                                              16

on account of principal payments of any Pledged Treasury Securities as provided
in Section 3 hereof, in satisfaction of the Obligations of the Holder of the
Treasury PEPS Units of which such Pledged Treasury Securities are a part under
the related Purchase Contracts, the inability to make such payments shall
constitute an event of default hereunder and the Collateral Agent shall have and
may exercise, with reference to such Pledged Treasury Securities and such
Obligations of such Holder, any and all of the rights and remedies available to
a secured party under the UCC and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.

     (c)  Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Senior Deferrable Notes and (ii) the principal amount of the Pledged
Treasury Securities subject, in each case, to the provisions of Section 3
hereof, and as otherwise granted herein.

     (d)  The Purchase Contract Agent and each Holder of Securities agrees that,
from time to time, upon the written request of the Collateral Agent, the
Purchase Contract Agent or such Holder shall execute and deliver such further
documents and do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any Holder for executing
any documents or taking any such acts requested by the Collateral Agent
hereunder, except for liability for its own negligent acts, its own negligent
failure to act or its own willful misconduct.

     Section 7.2  Substitutions.
                  -------------

     Whenever a Holder has the right to substitute Treasury Securities, Senior
Deferrable Notes or security entitlements to either of them for financial assets
held in the Collateral Account, such substitution shall not constitute a
novation of the security interest created hereby.

Section 8.  Representations and Warranties; Covenants.
            -----------------------------------------

     Section 8.1  Representations and Warranties.
                  ------------------------------

     Each Holder from time to time, acting through the Purchase Contract Agent
as attorney-in-fact (it being understood that the Purchase Contract Agent shall
not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represents and warrants to the Collateral Agent (with respect to
such Holder's interest in the Collateral), which representations and warranties
shall be deemed repeated on each day a Holder Transfers Collateral that:

          (1)  such Holder has the power to grant a security interest in and
     lien on the Collateral;
<PAGE>

                                                                              17

          (2)  such Holder is the sole beneficial owner of the Collateral and,
     in the case of Collateral delivered in physical form, is the sole holder of
     such Collateral and is the sole beneficial owner of, or has the right to
     Transfer, the Collateral it Transfers to the Securities Intermediary for
     credit to the Collateral Account, free and clear of any security interest,
     lien, encumbrance, call, liability to pay money or other restriction other
     than the security interest and lien granted under Section 2 hereof;

          (3)  upon the Transfer of the Collateral to the Securities
     Intermediary for credit to the Collateral Account, the Collateral Agent,
     for the benefit of the Company, will have a valid and perfected first
     priority security interest therein (assuming that any central clearing
     operation or any securities intermediary or other entity not within the
     control of the Holder involved in the Transfer of the Collateral, including
     the Collateral Agent and the Securities Intermediary, gives the notices and
     takes the action required of it hereunder and under applicable law for
     perfection of that interest and assuming the establishment and exercise of
     control pursuant to Section 4 hereof); and

          (4)  the execution and performance by the Holder of its obligations
     under this Agreement will not result in the creation of any security
     interest, lien or other encumbrance on the Collateral other than the
     security interest and lien granted under Section 2 hereof or violate any
     provision of any existing law or regulation applicable to it or of any
     mortgage, charge, pledge, indenture, contract or undertaking to which it is
     a party or which is binding on it or any of its assets.

     Section 8.2  Covenants.
                  ---------

     The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any covenant made by or on behalf of a Holder), hereby
covenant to the Collateral Agent that for so long as the Collateral remains
subject to the Pledge:

          (1)  neither the Purchase Contract Agent nor such Holders will create
     or purport to create or allow to subsist any mortgage, charge, lien, pledge
     or any other security interest whatsoever over the Collateral or any part
     of it other than pursuant to this Agreement; and

          (2)  neither the Purchase Contract Agent nor such Holders will sell or
     otherwise dispose (or attempt to dispose) of the Collateral or any part of
     it except for the beneficial interest therein, subject to the Pledge
     hereunder, transferred in connection with the Transfer of the Securities.
<PAGE>

                                                                              18

Section 9.  The Collateral Agent and the Securities Intermediary.
            ----------------------------------------------------

     It is hereby agreed as follows:

     Section 9.1  Appointment, Powers and Immunities.
                  ----------------------------------

     The Collateral Agent shall act as agent for the Company hereunder with such
powers as are specifically vested in the Collateral Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
The Collateral Agent shall:

          (1)  have no duties or responsibilities except those expressly set
     forth in this Agreement and no implied covenants or obligations shall be
     inferred from this Agreement against the Collateral Agent, nor shall the
     Collateral Agent be bound by the provisions of any agreement by any party
     hereto beyond the specific terms hereof;

          (2)  not be responsible for any recitals contained in this Agreement,
     or in any certificate or other document referred to or provided for in, or
     received by it under, this Agreement, the Securities or the Purchase
     Contract Agreement, or for the value, validity, effectiveness, genuineness,
     enforceability or sufficiency of this Agreement (other than as against the
     Collateral Agent), the Securities or the Purchase Contract Agreement or any
     other document referred to or provided for herein or therein or for any
     failure by the Company or any other Person (except the Collateral Agent) to
     perform any of its obligations hereunder or thereunder or for the
     perfection, priority or, except as expressly required hereby, maintenance
     of any security interest created hereunder;

          (3)  not be required to initiate or conduct any litigation or
     collection proceedings hereunder (except pursuant to directions furnished
     under Section 9.2 hereof, subject to Section 9.6 hereof);

          (4)  not be responsible for any action taken or omitted to be taken by
     it hereunder or under any other document or instrument referred to or
     provided for herein or in connection herewith or therewith, except for its
     own negligence or willful misconduct; and

          (5)  not be required to advise any party as to selling or retaining,
     or taking or refraining from taking any action with respect to, any
     securities or other property deposited hereunder.

Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.

     No provision of this Agreement shall require the Collateral Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties
<PAGE>

                                                                              19

hereunder. In no event shall the Collateral Agent be liable for any amount in
excess of the Value of the Collateral. Notwithstanding the foregoing, each of
the Collateral Agent and the Securities Intermediary in its individual capacity
hereby waives any right of setoff, bankers' lien, liens or perfection rights as
securities intermediary or any counterclaim with respect to any of the
Collateral.

     Section 9.2  Instructions of the Company.
                  ---------------------------

     The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, or to direct the taking or refraining from taking of any
action authorized by this Agreement; provided, however, that (i) such direction
shall not conflict with the provisions of any law or of this Agreement and (ii)
the Collateral Agent shall be adequately indemnified as provided herein. Nothing
contained in this Section 9.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.

     Section 9.3  Reliance by Collateral Agent and Securities Intermediary.
                  --------------------------------------------------------

     Each of the Securities Intermediary and the Collateral Agent shall be
entitled to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex or facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated therein)
and upon advice and statements of legal counsel and other experts selected by
the Collateral Agent and the Securities Intermediary. As to any matters not
expressly provided for by this Agreement, the Collateral Agent and the
Securities Intermediary shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions given by the
Company in accordance with this Agreement.

     Section 9.4  Rights in Other Capacities.
                  --------------------------

     The Collateral Agent and the Securities Intermediary and their affiliates
may (without having to account therefor to the Company) accept deposits from,
lend money to, make their investments in and generally engage in any kind of
banking, trust or other business with the Purchase Contract Agent or the
Securities Intermediary, as the case may be, any other Person interested herein
and any Holder of Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Securities without having to
account for the same to the Company; provided that each of the Securities
Intermediary and the Collateral Agent covenants and agrees with the Company that
it shall not accept, receive or permit there to be created in favor of itself
and shall take no affirmative action
<PAGE>

                                                                              20

to permit there to be created in favor of any other Person, any security
interest, lien or other encumbrance of any kind in or upon the Collateral other
than the lien created by the Pledge.

     Section 9.5  Non-Reliance on Collateral Agent and Securities Intermediary.
                  ------------------------------------------------------------

     Neither the Securities Intermediary nor the Collateral Agent shall be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Securities of this Agreement, the
Purchase Contract Agreement, the Securities or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Purchase Contract Agent or any Holder of Securities. Neither the Collateral
Agent nor the Securities Intermediary shall have any duty or responsibility to
provide the Company with any credit or other information concerning the affairs,
financial condition or business of the Purchase Contract Agent or any Holder of
Securities (or any of their respective affiliates) that may come into the
possession of the Collateral Agent or the Securities Intermediary or any of
their respective affiliates.

     Section 9.6  Compensation and Indemnity.
                  --------------------------

     The Company agrees to:

          (1)  pay the Collateral Agent and the Securities Intermediary from
     time to time such compensation as shall be agreed in writing between the
     Company and the Collateral Agent or the Securities Intermediary, as the
     case may be, for all services rendered by them hereunder; and

          (2)  indemnify the Collateral Agent and the Securities Intermediary
     for, and hold each of them harmless from and against, any loss, liability
     or reasonable out-of-pocket expense incurred without negligence, willful
     misconduct or bad faith on its part, arising out of or in connection with
     the acceptance or administration of its powers and duties under this
     Agreement, including the reasonable out-of-pocket costs and expenses
     (including reasonable fees and expenses of counsel) of defending itself
     against any claim or liability in connection with the exercise or
     performance of such powers and duties.

     Section 9.7  Failure to Act.
                  --------------

     In the event of any ambiguity in the provisions of this Agreement or any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Securities Intermediary shall be entitled, after prompt
notice to the Company and the Purchase Contract Agent, at its sole option, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and the Collateral Agent and the Securities Intermediary shall not be or become
liable in any way to any of the parties hereto
<PAGE>

                                                                              21

for its failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent and the Securities Intermediary shall be
entitled to refuse to act until either:

          (1)  such conflicting or adverse claims or demands shall have been
     finally determined by a court of competent jurisdiction or settled by
     agreement between the conflicting parties as evidenced in a writing
     satisfactory to the Collateral Agent or the Securities Intermediary; or

          (2)  the Collateral Agent or the Securities Intermediary shall have
     received security or an indemnity satisfactory to it sufficient to save it
     harmless from and against any and all loss, liability or reasonable out-of-
     pocket expense which it may incur by reason of its acting.

The Collateral Agent and the Securities Intermediary may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Securities Intermediary shall be required to take any
action that is in its opinion contrary to law or to the terms of this Agreement,
or which would in its opinion subject it or any of its officers, employees or
directors to liability.
<PAGE>

                                                                              22

     Section 9.8  Resignation of Collateral Agent and Securities Intermediary.
                  -----------------------------------------------------------

     (a)  Subject to the appointment and acceptance of a successor Collateral
Agent as provided below:

          (1)  the Collateral Agent may resign at any time by giving notice
     thereof to the Company and the Purchase Contract Agent as attorney-in-fact
     for the Holders of Securities;

          (2)  the Collateral Agent may be removed at any time by the Company;
     and

          (3)  if the Collateral Agent fails to perform any of its material
     obligations hereunder in any material respect for a period of not less than
     20 days after receiving written notice of such failure by the Purchase
     Contract Agent and such failure shall be continuing, the Collateral Agent
     may be removed by the Purchase Contract Agent.

The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Collateral Agent. If no successor Collateral Agent shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's giving of notice of resignation or such
removal, then the retiring Collateral Agent may petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent. The Collateral
Agent shall be a bank which has an office in New York City with a combined
capital and surplus of at least $50,000,000 and shall not be the Purchase
Contract Agent or any of its affiliates. Upon the acceptance of any appointment
as Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall take all appropriate action to transfer any
money and property held by it hereunder (including the Collateral) to such
successor Collateral Agent. The retiring Collateral Agent shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent
hereunder. After any retiring Collateral Agent's resignation hereunder as
Collateral Agent, the provisions of this Section 9 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Collateral Agent.

     (b)  Subject to the appointment and acceptance of a successor Securities
Intermediary as provided below:

          (1)  the Securities Intermediary may resign at any time by giving
     notice thereof to the Company and the Purchase Contract Agent as attorney-
     in-fact for the Holders of Securities;

          (2)  the Securities Intermediary may be removed at any time by the
     Company; and
<PAGE>

                                                                              23

          (3)  if the Securities Intermediary fails to perform any of its
     material obligations hereunder in any material respect for a period of not
     less than 20 days after receiving written notice of such failure by the
     Purchase Contract Agent and such failure shall be continuing, the
     Securities Intermediary may be removed by the Purchase Contract Agent.

The Purchase Contract Agent shall promptly notify the Company of any removal of
the Securities Intermediary pursuant to clause (3) of the immediately preceding
sentence. Upon any such resignation or removal, the Company shall have the right
to appoint a successor Securities Intermediary. If no successor Securities
Intermediary shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Securities Intermediary's giving
of notice of resignation or such removal, then the retiring Securities
Intermediary may petition any court of competent jurisdiction for the
appointment of a successor Securities Intermediary. The Securities Intermediary
shall be a bank which has an office in New York City with a combined capital and
surplus of at least $50,000,000 and shall not be the Purchase Contract Agent or
any of its affiliates. Upon the acceptance of any appointment as Securities
Intermediary hereunder by a successor Securities Intermediary, such successor
Securities Intermediary shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Securities
Intermediary, and the retiring Securities Intermediary shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor Securities Intermediary. The
retiring Securities Intermediary shall, upon such succession, be discharged from
its duties and obligations as Securities Intermediary hereunder. After any
retiring Securities Intermediary's resignation hereunder as Securities
Intermediary, the provisions of this Section 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Securities Intermediary.

     Section 9.9  Right to Appoint Agent or Advisor.
                  ---------------------------------

     The Collateral Agent shall have the right to appoint agents or advisors in
connection with any of its duties hereunder, and the Collateral Agent shall not
be liable for any action taken or omitted by, or in reliance upon the advice of,
such agents or advisors selected in good faith. The appointment of agents
pursuant to this Section 9.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.

     Section 9.10 Survival.
                  --------

     The provisions of this Section 9 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Securities Intermediary.
<PAGE>

                                                                              24

     Section 9.11 Exculpation.
                  -----------

     Anything contained in this Agreement to the contrary notwithstanding, in no
event shall the Collateral Agent or the Securities Intermediary or their
officers, directors, employees or agents be liable under this Agreement to any
third party for indirect, special, punitive, or consequential loss or damage of
any kind whatsoever, including lost profits, whether or not the likelihood of
such loss or damage was known to the Collateral Agent or the Securities
Intermediary, or any of them, incurred without any act or deed that is found to
be attributable to gross negligence or willful misconduct on the part of the
Collateral Agent or the Securities Intermediary.

Section 10. Amendment.
            ---------

     Section 10.1 Amendment Without Consent of Holders.
                  ------------------------------------

     Without the consent of any Holders, the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Securities Intermediary and the Purchase Contract Agent,
to:

          (1)  evidence the succession of another Person to the Company, and the
     assumption by any such successor of the covenants of the Company;

          (2)  evidence and provide for the acceptance of appointment hereunder
     by a successor Collateral Agent, Securities Intermediary or Purchase
     Contract Agent;

          (3)  add to the covenants of the Company for the benefit of the
     Holders, or surrender any right or power herein conferred upon the Company,
     provided such covenants or such surrender do not adversely affect the
     validity, perfection or priority of the Pledge created hereunder; or

          (4)  cure any ambiguity (or formal defect), correct or supplement any
     provisions herein which may be inconsistent with any other such provisions
     herein, or make any other provisions with respect to such matters or
     questions arising under this Agreement, provided such action shall not
     adversely affect the interests of the Holders.

     Section 10.2 Amendment With Consent of Holders.
                  ---------------------------------

     With the consent of the Holders of not less than a majority of the Purchase
Contracts at the time outstanding, by Act of such Holders delivered to the
Company, the Purchase Contract Agent, the Securities Intermediary or the
Collateral Agent, as the case may be, the Company, when duly authorized, the
Purchase Contract Agent, the Securities Intermediary and the Collateral Agent
may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
Securities; provided,
<PAGE>

                                                                              25

however, that no such supplemental agreement shall, without the unanimous
consent of the Holders of each Outstanding Security adversely affected thereby:

          (1)  change the amount or type of Collateral underlying a Security,
     impair the right of the Holder of any Security to receive distributions on
     the underlying Collateral or otherwise adversely affect the Holder's rights
     in or to such Collateral;

          (2)  otherwise effect any action that would require the consent of the
     Holder of each Outstanding Security affected thereby pursuant to the
     Purchase Contract Agreement if such action were effected by an agreement
     supplemental thereto; or

          (3)  reduce the percentage of Purchase Contracts the consent of whose
     Holders is required for any such amendment;

provided that if any amendment or proposal referred to above would adversely
affect only the PEPS Units or only the Treasury PEPS Units, then only the
affected class of Holders as of the record date for the Holders entitled to vote
thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of Holders
of not less than a majority of such class; provided, further, that the unanimous
consent of the Holders of each outstanding Purchase Contract of such class
affected thereby shall be required to approve any amendment or proposal
specified in clauses (1) through (3) above.

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.

     Section 10.3 Execution of Amendments.
                  -----------------------

     In executing any amendment permitted by this Section, the Collateral Agent,
the Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.1 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied.

     Section 10.4 Effect of Amendments.
                  --------------------

     Upon the execution of any amendment under this Section, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.
<PAGE>

                                                                              26

     Section 10.5 Reference to Amendments.
                  -----------------------

     Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any amendment pursuant to this Section may, and shall if
required by the Collateral Agent or the Purchase Contract Agent, bear a notation
in form approved by the Purchase Contract Agent and the Collateral Agent as to
any matter provided for in such amendment. If the Company shall so determine,
new Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.

Section 11. Miscellaneous.
            -------------

     Section 11.1 No Waiver.
                  ---------

     No failure on the part of the Collateral Agent or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.

     Section 11.2 Governing Law.
                  -------------

     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

     The Company, the Collateral Agent, the Securities Intermediary and the
Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the Collateral Agent, the
Securities Intermediary and the Holders from time to time of the Securities,
acting through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

     Section 11.3 Notices.
                  -------

     All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be
<PAGE>

                                                                              27

given or made in writing (including, without limitation, by telecopy) delivered
to the intended recipient at the "Address for Notices" specified below its name
on the signature pages hereof or, as to any party, at such other address as
shall be designated by such party in a notice to the other parties. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telecopier or personally delivered or,
in the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.

     Section 11.4 Successors and Assigns.
                  ----------------------

     This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, and the Holders from
time to time of the Securities, by their acceptance of the same, shall be deemed
to have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.

     Section 11.5 Counterparts.
                  ------------

     This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Agreement by signing any such counterpart.

     Section 11.6 Severability.
                  ------------

     If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

     Section 11.7 Expenses, etc.
                  --------------

     The Company agrees to reimburse the Collateral Agent and the Securities
Intermediary for:

          (1)  all reasonable out-of-pocket costs and expenses of the Collateral
     Agent and the Securities Intermediary (including, without limitation, the
     reasonable fees and expenses of counsel to the Collateral Agent and the
     Securities Intermediary), in connection with (i) the negotiation,
     preparation, execution and delivery or performance of this Agreement and
     (ii) any modification, supplement or waiver of any of the terms of this
     Agreement;
<PAGE>

                                                                              28

          (2)  all reasonable costs and expenses of the Collateral Agent and the
     Securities Intermediary (including, without limitation, reasonable fees and
     expenses of counsel) in connection with (i) any enforcement or proceedings
     resulting or incurred in connection with causing any Holder of Securities
     to satisfy its obligations under the Purchase Contracts forming a part of
     the Securities and (ii) the enforcement of this Section 11.7; and

          (3)  all transfer, stamp, documentary or other similar taxes,
     assessments or charges levied by any governmental or revenue authority in
     respect of this Agreement or any other document referred to herein and all
     costs, expenses, taxes, assessments and other charges incurred in
     connection with any filing, registration, recording or perfection of any
     security interest contemplated hereby.

     Section 11.8 Security Interest Absolute.
                  --------------------------

     All rights of the Collateral Agent and security interests hereunder, and
all obligations of the Holders from time to time hereunder, shall be absolute
and unconditional irrespective of:

          (1)  any lack of validity or enforceability of any provision of the
     Purchase Contracts or the Securities or any other agreement or instrument
     relating thereto;

          (2)  any change in the time, manner or place of payment of, or any
     other term of, or any increase in the amount of, all or any of the
     obligations of Holders of the Securities under the related Purchase
     Contracts, or any other amendment or waiver of any term of, or any consent
     to any departure from any requirement of, the Purchase Contract Agreement
     or any Purchase Contract or any other agreement or instrument relating
     thereto; or

          (3)  any other circumstance which might otherwise constitute a defense
     available to, or discharge of, a borrower, a guarantor or a pledgor.
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

_________________________________           _________________________________
GEORGIA-PACIFIC CORPORATION                 THE FIRST NATIONAL BANK OF
                                            CHICAGO, as Purchase Contract Agent
                                            and as attorney-in- fact of the
                                            Holders from time to time of the
                                            Securities

By:                                         By:
   Name: John F. McGovern                       Name:
   Title:Executive Vice President--             Title:
         Financial and Chief Financial
         Officer

Address for Notices:                        Address for Notices:

   133 Peachtree Street, N.E.                   One First National Plaza
   Atlanta, Georgia  30303                      Suite 0126
                                                Chicago, Illinois  60670-0126
Attention:
Telecopy:                                   Attention:  Global Corporate Trust
                                                        Services
                                            Telecopy:   (312) 407-1708

_________________________________           _________________________________
THE CHASE MANHATTAN BANK, as                THE CHASE MANHATTAN BANK, as
Collateral Agent                            Securities Intermediary

By:                                         By:
   Name:                                        Name:
   Title:                                       Title:

Address for Notices:                        Address for Notices:

   450 West 33rd Street                         450 West 33rd Street
   New York, New York 10001                     New York, New York 10001

Attention:  Corporate Trust Group           Attention:   Corporate Trust Group
Telecopy:   (212) 946-8159                  Telecopy:    (212) 946-8159
<PAGE>

                                                                       EXHIBIT A

                                  INSTRUCTION
                         FROM PURCHASE CONTRACT AGENT
                              TO COLLATERAL AGENT
                    (Establishment of Treasury PEPS Units)

The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001

Attention:  Corporate Trust Group
Telecopy:   (212) 946-8159

               Re:  PEPS Units of Georgia-Pacific Corporation (the "Company")

     Please refer to the Pledge Agreement, dated as of July 7, 1999 (the "Pledge
Agreement"), among the Company, you, as Collateral Agent, The Chase Manhattan
Bank, as Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of PEPS Units from time to time.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.

     We hereby notify you in accordance with Section 5.2 of the Pledge Agreement
that the holder of securities named below (the "Holder") has elected to
substitute $__________ Value of Treasury Securities or security entitlements
thereto in exchange for an equal Value of Pledged Senior Deferrable Notes and
has delivered to the undersigned a notice stating that the Holder has
Transferred such Treasury Securities or security entitlements thereto to the
Securities Intermediary, for credit to the Collateral Account.

     We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of Pledged Senior Deferrable Notes in accordance with Section 5.2 of the
Pledge Agreement.

                                    The First National Bank of Chicago

Date:                               By:______________________________
                                       Name:
                                       Title:
<PAGE>

Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the Pledged Senior Deferrable
Notes:

_________________________     _______________________________
          Name                Social Security or other
                              Taxpayer Identification Number,
                              if any

_________________________
        Address

_________________________

_________________________
<PAGE>

                                                                       EXHIBIT B

                                  INSTRUCTION
                             FROM COLLATERAL AGENT
                          TO SECURITIES INTERMEDIARY
                    (Establishment of Treasury PEPS Units)

The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001

Attention:  Corporate Trust Group
Telecopy:   (212) 946-8159

               Re:  PEPS Units of Georgia-Pacific Corporation (the "Company")

                    Securities Account No. . entitled "The Chase Manhattan Bank,
                    as Collateral Agent, Securities Account (Georgia-Pacific
                    Corporation)" (the "Collateral Account")

     Please refer to the Pledge Agreement, dated as of July 7, 1999 (the "Pledge
Agreement"), among the Company, you, as Securities Intermediary, The First
National Bank of Chicago, as Purchase Contract Agent and as attorney-in-fact for
the holders of PEPS Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.

     When you have confirmed that $__________ Value of Treasury Securities or
security entitlements thereto has been credited to the Collateral Account by or
for the benefit of _________, as Holder of PEPS Units (the "Holder"), you are
hereby instructed to release from the Collateral Account an equal Value of
Senior Deferrable Notes or security entitlements thereto by Transfer to the
Purchase Contract Agent.

                                        The Chase Manhattan Bank

Dated:                                  By:_____________________________
                                           Name:
                                           Title:
<PAGE>

Please print name and address of Holder:

_________________________     ______________________________
          Name                Social Security or other
                              Taxpayer Identification Number,
                              if any

_________________________
          Address

_________________________

_________________________
<PAGE>

                                                                       EXHIBIT C

                                 INSTRUCTION
                         FROM PURCHASE CONTRACT AGENT
                             TO COLLATERAL AGENT
                       (Reestablishment of PEPS Units )

The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001

Attention:  Corporate Trust Group
Telecopy:   (212) 946-8159

               Re:  PEPS Units of Georgia-Pacific Corporation (the "Company")

     Please refer to the Pledge Agreement, dated as of July 7, 1999 (the "Pledge
Agreement"), among the Company, you, as Collateral Agent, The Chase Manhattan
Bank, as Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of PEPS Units from time to time.
Capitalized terms used herein but not defined shall have the meanings set forth
in the Pledge Agreement.

     We hereby notify you in accordance with Section 5.3(a) of the Pledge
Agreement that the holder of securities listed below (the "Holder") has elected
to substitute $__________ Value of Senior Deferrable Notes or security
entitlements thereto in exchange for $__________ Value of Pledged Treasury
Securities and has delivered to the undersigned a notice stating that the Holder
has Transferred such Senior Deferrable Notes or security entitlements thereto to
the Securities Intermediary, for credit to the Collateral Account.

     We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Senior Deferrable Notes or security entitlements thereto
have been credited to the Collateral Account, to release to the undersigned
$__________ Value of Treasury Securities or security entitlements thereto
related to _____ Treasury PEPS Units of such Holder in accordance with Section
5.3(a) of the Pledge Agreement.

                                    The First National Bank of Chicago

Date:                               By:_______________________________
                                       Name:
                                       Title:
<PAGE>

Please print name and address of Holder electing to substitute Pledged Senior
Deferrable Notes or security entitlements thereto for Pledged Treasury
Securities:

_____________________________       _______________________________
          Name                      Social Security or other
                                    Taxpayer Identification Number,
                                    if any

_____________________________
          Address

_____________________________

_____________________________
<PAGE>

                                                                       EXHIBIT D

                                 INSTRUCTION
                            FROM COLLATERAL AGENT
                          TO SECURITIES INTERMEDIARY
                        (Reestablishment of PEPS Units)

The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001

Attention:  Corporate Trust Group
Telecopy:   (212) 946-8159

               Re:  PEPS Units of Georgia-Pacific Corporation (the "Company")
                    Securities Account No. . entitled "The Chase Manhattan Bank,
                    as Collateral Agent, Securities Account (Georgia-Pacific
                    Corporation)" (the "Collateral Account")

     Please refer to the Pledge Agreement, dated as of July 7, 1999 (the "Pledge
Agreement"), among the Company, you, as Securities Intermediary, The First
National Bank of Chicago, as Purchase Contract Agent and as attorney-in-fact for
the holders of PEPS Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.

     When you have confirmed that $_________ Value of Senior Deferrable Notes or
security entitlements thereto has been credited to the Collateral Account by or
for the benefit of _________, as Holder of PEPS Units (the "Holder"), you are
hereby instructed to release from the Collateral Account $__________ Value of
Treasury Securities or security entitlements thereto by Transfer to the Purchase
Contract Agent.

                              The Chase Manhattan Bank

Dated:                        By:______________________________
                                 Name:
                                 Title:
<PAGE>

Please print name and address of Holder:

___________________________         _______________________________
          Name                      Social Security or other
                                    Taxpayer Identification Number,
                                    if any

___________________________
          Address

___________________________

___________________________
<PAGE>

                                                                      EXHIBIT  E

            NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY
                          TO PURCHASE CONTRACT AGENT
                           (Cash Settlement Amounts)

The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126

Attention: Global Corporate Trust Services
Telecopy:  (312) 407-1708

               Re:  PEPS Units of Georgia-Pacific Corporation (the "Company")

     Please refer to the Pledge Agreement, dated as of July 7, 1999 (the "Pledge
Agreement"), among you, the Company, The Chase Manhattan Bank, as Collateral
Agent and the undersigned, as Securities Intermediary. Unless otherwise defined
herein, terms defined in the Pledge Agreement are used herein as defined therein

     In accordance with Section 5.5(d) of the Pledge Agreement, we hereby notify
you that as of 11:00 a.m., [on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date], we have received (i) $_____ in immediately
available funds paid in an aggregate amount equal to the Purchase Price to the
Company on the Purchase Contract Settlement Date with respect to __________ PEPS
Units and (ii) $_________ in immediately available funds paid in an aggregate
amount equal to the Purchase Price to the Company on the Purchase Contract
Settlement Date with respect to ______ Treasury PEPS Units.

                              The Chase Manhattan Bank

Date:                         By:________________________________
                                 Name:
                                 Title:

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