Document:

EXHIBIT 10.16

                               OPERATING AGREEMENT

                                       OF

                           GEORGIA-PACIFIC TISSUE, LLC

                                  Dated As Of:

                                 October 4, 1999

<PAGE>

                                TABLE OF CONTENTS

                                                                        Page No.
ARTICLE I DEFINITIONS AND TERMS

Section 1.1 .       Certain Definitions                                      1
Section 1.2         Rules of Construction                                   10

ARTICLE II GENERAL MATTERS

Section 2.1        Formation                                                11
Section 2.2        Purpose and Business                                     11
Section 2.3        Offices                                                  11
Section 2.4        Name                                                     11
Section 2.5        Term                                                     11
Section 2.6        Members                                                  11

ARTICLE III FINANCIAL AND TAX MATTERS

Section 3.1          Capital Contributions                                  12
Section 3.2          Loans from Members                                     13
Section 3.3          Restrictions Relating to Capital; Company Property     13
Section 3.4          Tax Treatment                                          14
Section 3.5          Allocation of Profits                                  14
Section 3.6          Section 3.6                                            14
Section 3.7          Special Allocations                                    14
Section 3.8          Offsetting Special Allocations                         16
Section 3.9          Other Allocation Rules.                                16
Section 3.10         Tax Elections.                                         17
Section 3.11         Tax Allocations; Code Section 704(c).                  17
Section 3.12         Tax Matters Member.                                    18
Section 3.13         Regular Distribution Policy                            18
Section 3.14         Special Distribution.                                  18
Section 3.15         Accelerated Gains Tax Liability of WISCO.              18
Section 3.16         Sharing of Company Tax Benefits.                       21
Section 3.17         Permanent Company Debt                                 23

ARTICLE IV MANAGEMENT

Section 4.1          General                                                25
Section 4.2          Board Composition                                      25
Section 4.3          Terms; Removal; Vacancies                              25
Section 4.4          Notice; Quorum                                         25
Section 4.5          Voting                                                 26
Section 4.6          TelephonicMeeting; Written Consents                    26
Section 4.7          Committees of the Board; Officers                      27
Section 4.8          Executionof Documents                                  27
Section 4.9          Reliance on Documents and Reports.                     28

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Section 4.10         Standard of Care; Indemnification                      28
Section 4.11         Member Action.                                         28
Section 4.12         Certain Transactions.                                  29

ARTICLE V ACCOUNTING, BOOKS AND RECORDS

Section 5.1        Fiscal Year                                              29
Section 5.2        Books and Records.                                       30
Section 5.3        Auditors.                                                30
Section 5.4        Reporting                                                30
Section 5.5        Banking.                                                 30
Section 5.6        Tax Return Information.                                  30
Section 5.7        Delegation of Responsibility for Accounting and Reports. 31

ARTICLE VI CONFIDENTIALITY

Section 6.1        Confidentiality Obligation                               31
Section 6.2        Exceptions from Confidentiality Obligation               32
Section 6.3        Employees, Agents and Advisers                           32
Section 6.4         Return of Confidential Information                      32
Section 6.5        Survival After Termination                               33

ARTICLE VII TRANSFER OF UNITS; PUT AND CALL RIGHTS

Section 7.1        General                                                  33
Section 7.2        Put and Call Rights                                      34
Section 7.3        Member Transfers                                         35
Section 7.4        Retirement.                                              35

ARTICLE VIII DISSOLUTION AND WINDING UP; BUY OUT RIGHTS

Section 8.1        Dissolution                                              35
Section 8.2        Winding Up.                                              36
Section 8.3        In-Kind Distributions                                    36
Section 8.4        Cancellation of Certificate of Formation                 36
Section 8.5        Buy Out Rights.                                          37

ARTICLE IX CERTIFICATES EVIDENCING UNITS

Section 9.1        Certificates                                             37
Section 9.2        Register.                                                37
Section 9.3        New Certificates.                                        37
Section 9.4        Interest as a Security                                   37
Section 9.5        Legends                                                  38

ARTICLE X MISCELLANEOUS

Section 10.1           Notices                                              38
Section 10.2           Amendment; Waiver                                    38
Section 10.3           Assignment.                                          39
Section 10.4           Entire Agreement                                     39
Section 10.5           Public Disclosure.                                   39

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Section 10.6           Parties in Interest.                                 39
Section 10.7           Governing Law; Submission to Jurisdiction;
                         Selection of Forum.                                39
Section 10.8           Counterparts.                                        40
Section 10.9           Severability.                                        40
Section 10.10          Equitable Relief.                                    40
Section 10.11          No Agency.                                           40
Section 10.12          Limitation of Liability                              40
Section 10.13          Non-Exclusive Business                               40
Section 10.14          Dispute Resolution.                                  41

EXHIBIT A                  Form of Unit Certificate
SCHEDULE 1                 Identification of Members

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                               OPERATING AGREEMENT
                                       OF
                           GEORGIA-PACIFIC TISSUE, LLC

         THIS OPERATING AGREEMENT of GEORGIA-PACIFIC TISSUE, LLC, a Delaware
limited liability company (the "Company"), is made and entered into as of
October 4, 1999, among WISCONSIN TISSUE MILLS INC., a Delaware corporation and a
wholly owned subsidiary of Chesapeake Corporation ("WISCO"), GEORGIA-PACIFIC
CORPORATION, a Georgia corporation ("G-P"), and such other Persons that become
Members as herein provided.

                                    RECITALS

         WHEREAS, the Company, G-P, WISCO and certain WISCO Affiliates are
parties to that certain Joint Venture Agreement, dated as of October 4, 1999
(the "Joint Venture Agreement");

         WHEREAS, pursuant to and subject to the terms and conditions of the
Joint Venture Agreement, each of WISCO and G-P will contribute, or cause to be
contributed, to the Company certain assets and liabilities in exchange for
equity interests in the Company;

         WHEREAS, the Members desire to enter into this Agreement, which shall
constitute the limited liability company agreement of the Members under the
Delaware Act, for the purpose of setting forth the agreements of the Members as
to the affairs of the Company and the conduct of its business;

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

                                    ARTICLE I
                              DEFINITIONS AND TERMS

         SECTION 1.1 CERTAIN DEFINITIONS.

         As used herein, the following terms shall have the meanings set forth
or as referenced below:

         "Adjusted Capital Account Deficit" means, with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant Fiscal Year, after giving effect to the following adjustments:

               (i) Add to such Capital Account any amounts which such Member is
treated as obligated to restore pursuant to Regulations Section
1.704-1(b)(2)(ii)(c) by virtue of such Member's guarantee or indemnity agreement
with respect to the Company Debt or is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and

               (ii) Subtract from such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.

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The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.

         "Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Section 3.5(e);

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such first Person as of the date on which, or at any time
during the period for which, the determination of affiliation is being made. For
the purpose of this definition, "control" means (i) the direct or indirect
ownership or control of more than 50% of the voting stock or general partnership
interest or other voting interest in any Person, or (ii) the ability to direct
or cause the direction of the management or affairs of a Person, whether through
the direct or indirect ownership of voting interests, by contract or otherwise.

         "Affiliate Member" shall have the meaning set forth in Section 7.3(a).

         "Agreed Value" means the Fair Market Value of Contributed Assets;
provided that the initial Agreed Value of Contributed Assets that a Member is
obligated to transfer, or cause to be transferred, to the Company pursuant to
the Joint Venture Agreement shall be the amount set forth in, or determined
pursuant to, Section 3.1 of this Agreement.

         "Agreement" shall mean this Operating Agreement, including the
schedules and exhibits hereto, as the same may be amended or supplemented from
time to time in accordance with the terms hereof.

         "Ancillary Agreements" shall have the meaning set forth in the Joint
Venture Agreement.

         "Board" means the governance board of the Company consisting of all
Managers or, as may be applicable, any duly appointed committee of the Board.

         "Built In Gain" means, with respect to any Contributed Asset, the
excess of the Fair Market Value of such Contributed Asset on the Closing Date as
determined under Section 3.1(a) over the Company's adjusted basis for federal
income tax purposes in such Contributed Asset immediately following its
contribution to the Company.

         "Business Day" means a day, other than a Saturday or Sunday, on which
banks generally are open in New York City for a full range of business.

         "Call Price" shall have the meaning set forth in Section 7.2(b).

         "Capital Account" means, with respect to any Member, the Capital
Account maintained for such Member in accordance with the following provisions:

               (i) To each Member's Capital Account there shall be added the
amount of money and the initial Gross Asset Value of any property (other than
money) contributed to the Company by such Member (or its predecessors in
interest) with respect to the Interest in the Company held by such Member, such
Member's distributive share of Profits and any items in the nature of income or
gain which are specially allocated pursuant to Section 3.7 or Section 3.8, and
the amount of any Company liabilities assumed by such Member or which are
secured by any Company property distributed to such Member.

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               (ii) From each Member's Capital Account there shall be subtracted
the amount of money and the Gross Asset Value of any property distributed to
such Member pursuant to any provision of this Agreement, such Member's
distributive share of Losses and any items in the nature of expense or loss
which are specially allocated pursuant to Section 3.7 or Section 3.8, and the
amount of any liabilities of such Member assumed by the Company or which are
secured by any property contributed by such Member to the Company.

               (iii) In the event all or a portion of an Interest in the Company
is transferred in accordance with the terms of this Agreement, the transferee
shall succeed to the Capital Account of the transferor to the extent it relates
to the transferred Interest.

               (iv) In determining the amount of any liability for purposes of
subparagraphs (i) and (ii) above, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and Regulations.

         The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations. In the event the Board shall determine that it
is necessary to modify the manner in which the Capital Accounts, or any debits
or credits thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributions or distributed property or which
are assumed by the Company or any Member) are computed in order to comply with
such Regulations, the Board may make such modification, provided that such
modification is not likely to have a material adverse effect on the amounts
distributed to any Member upon the dissolution of the Company. The Board also
shall (i) make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Members and the amount of Company
capital reflected on the Company's balance sheet, as computed for book purposes
in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any
appropriate modifications in the event unanticipated events might otherwise
cause this Agreement not to comply with Regulations Section 1.704-1(b), provided
that, to the extent that any such adjustment is inconsistent with other
provisions of this Agreement and would have a material adverse effect on any
Member, such adjustment shall require the consent of such Member.

         "Capital Contribution" means, with respect to any Member, the amount of
cash and the Agreed Value of Contributed Assets contributed by such Member to
the Company in accordance with Section 3.1.

         "Cash Balances" means all cash accounts on a balance sheet representing
paper currency and coins, negotiable money orders, checks and bank balances as
well as cash equivalents in the form of highly liquid securities with a known
market value and a maturity, when acquired, of less than three months.

         "Certificate" means a certificate evidencing Units substantially in the
form of Exhibit A to this Agreement.

         "Certificate of Formation" shall have the meaning set forth in Section
2.1.

         "Closing" and "Closing Date" shall have the respective meanings set
forth in the Joint Venture Agreement.

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         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor to such statute.

         "Commercial Tissue Business" shall have the meaning set forth in the
Joint Venture Agreement.

         "Company" shall have the meaning set forth in the preamble hereto.

         "Company Business" means the business intended to be carried on by the
Company Group, as described in Section 2.2 hereof.

         "Company Debt" means the debt incurred by the Company on or about the
Closing Date solely to fund the Special Distribution, as further described in
Section 2.8(b) of the Joint Venture Agreement, and refinancing or replacement
therefor (including up to $8 million of related expenses, including legal fees,
accounting fees, printing fees, filing fees, and underwriting fees).

         "Company Group" means the Company and any Subsidiaries of the Company
from time to time.

         "Company Group Affiliate" means any Person that is an Affiliate of the
Company.

         "Company Property" means any and all property of whatsoever nature,
tangible or intangible, real or personal, of the Company Group from time to
time.

         "Confidential Information" shall have the meaning set forth in Section
6.1.

         "Contributed Assets" means the property or other consideration (other
than cash) contributed to the Company in exchange for Units in the Company.

         "CPA Firm" means the independent public auditor determined pursuant to
Section 5.3.

         "CSK" means Chesapeake Corporation, a Virginia corporation, of which
WISCO is a wholly-owned subsidiary.

         "CSK Group" means CSK, WISCO, and all other CSK Subsidiaries from time
to time.

         "CSK Group Affiliate" means any Person that is an Affiliate of CSK.

         "Debt" means any liability of the Company (including, without
limitation, liabilities to Members) for borrowed money, or any liability for the
payment of money by the Company in connection with any guarantees, surety
agreements, letters of credit, or other interest bearing liabilities evidenced
by any bond, debenture, note or other similar instrument, excluding any trade
liabilities or any non-interest bearing liabilities or obligations; capital
lease (but not operating lease) liabilities and other liabilities which are in
the nature of financing; and any interest bearing off-balance sheet liabilities
and the net liability of off balance sheet derivative contracts.

         "Delaware Act" means the Delaware Limited Liability Company Act, 6 Del.
C.ss.ss. 18-101 et seq., as amended from time to time, and any successor to such
statute.

         "Depreciation" means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable for
federal income tax purposes with respect to

                                      -4-
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an asset for such Fiscal Year, except that if the Gross Asset Value of an asset
differs from its adjusted basis for federal income tax purposes at the beginning
of such Fiscal Year, Depreciation shall be determined by the Board in the manner
described in Regulations Section 1.704-1(b)(2)(iv)(g)(3).

         "Distributable Cash" means the amount of cash that the Board reasonably
determines is available for distribution to Members at any applicable time,
taking into account available cash and anticipated cash flow and current and
anticipated expenses of the Company and after setting aside reserves in an
amount reasonably deemed necessary to provide for the Company's planned capital
expenditures, debt service and working capital.

         "EBITDA" means, at any time of determination as specified in this
Agreement, the earnings before interest, taxes, depreciation and amortization of
the Company Group, computed on a consolidated basis in accordance with GAAP
consistently applied, for the four fiscal quarters next preceding such date of
determination, excluding any one time, unusual or extraordinary items (and, if
determined at a time prior to the expiration of four fiscal quarters following
the Closing Date, then such EBITDA shall be deemed to be the EBITDA of the
Company Group for post-Closing completed fiscal quarters of the Company plus
combined EBITDA of the WISCO Business and the G-P Business for such number of
pre-Closing fiscal quarters as, together with the completed fiscal quarters of
the Company, shall equal four (4)).

         "Exercise Notice" shall have the meaning set forth in Section 7.2(c).

         "Fair Market Value" means, with respect to property, as of any date of
determination, the price for such property that could be negotiated in an
arm's-length free market transaction, for cash, between a willing seller and a
willing buyer, neither of whom is under pressure or compulsion to complete the
transaction, as of such date of determination, as determined in good faith by
the Board using a reasonable valuation method, which determination must include
the vote or consent of the WISCO Member; provided that if the full Board is
unable to reach such a determination with the vote or consent of the WISCO
Member, the WISCO Member and the G-P Member shall each select an independent and
nationally recognized accounting firm as its representative, and such accounting
firms shall select one independent and nationally recognized investment banking
firm, accounting firm or appraisal company as they deem appropriate and in the
best position to determine the Fair Market Value, whose determination of the
Fair Market Value shall be final and binding.

         "Final Determination" means (i) a decision, judgment, decree or other
order by any court of competent jurisdiction, which binds WISCO or CSK and has
become final and not subject to further appeal, (ii) a closing agreement which
binds WISCO or CSK entered into under Section 7121 of the Code or any other
binding settlement agreement with the Internal Revenue Service entered into in
connection with or in contemplation of an administrative or judicial proceeding,
or (iii) the completion of Internal Revenue Service administrative proceedings
which binds WISCO or CSK and if a judicial contest is not or is no longer
available or, in the sole discretion of WISCO or CSK, is not to be commenced or
continued.

         "Financing Agreements" means any agreement pursuant to which the
Company or any Company Affiliate incurs Debt.

         "Fiscal Year" means the fiscal year of the Company as specified in 5.1.

         "Formula Price" means, at any date of determination, the EBITDA of the
Company less Net Debt as of such date multiplied by 7.38.

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         "G-P Books" means any books and records of G-P Related to calculation
of volume, price or cost allocation methodology for purposes of the Ancillary
Agreements.

         "G-P Call" shall have the meaning set forth in Section 7.2(b).

         "G-P Group" means G-P and its Subsidiaries from time to time.

         "G-P Group Affiliate" means any Person that is an Affiliate of G-P.

         "G-P Guarantee" shall have the meaning set forth in Section 3.17.

         "G-P Member" means, collectively if more than one, the G-P Group
Affiliate(s) who from time to time is (are) Member(s) of the Company.

         "Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

               (i) The initial Gross Asset Value of any asset contributed by a
Member to Company shall be the Agreed Value of such asset except as otherwise
provided in Section 3.1;

               (ii) The Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross Fair Market Values as of the following
times: (A) the acquisition of an additional Interest in the Company by any new
or existing Member in exchange for more than a de minimis capital contribution;
(B) the distribution by the Company to a Member of more than a de minimis amount
of money or other property as consideration for an Interest in the Company; and
(C) the liquidation of the Company within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses
(A) and (B) above shall be made only if such adjustments are reasonably
necessary or appropriate to reflect the relative economic interests of the
Members in the Company;

               (iii) The Gross Asset Value of any Company asset distributed to
any Member shall be adjusted to equal the gross Fair Market Value of such asset
on the date of distribution; and

               (iv) The Gross Asset Values of Company assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulation Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the
definition of "Profits" and "Losses" or Section 3.7(g); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to
the extent the Board makes an adjustment pursuant to subparagraph (ii) that
would otherwise result in an adjustment pursuant to this subparagraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraphs (i), (ii), or (iv), such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.

         "Group" means the Company Group, the CSK Group or the G-P Group, or
both, as the context may require.

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         "Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, is not the owner of in excess of a 5% Percentage
Interest in the Company and who is not a Member of any such 5% Owner.

         "Indemnitee" shall have the meaning set forth in Section 4.10.

         "Interest" means the ownership interest of a Member in the Company
(which shall be considered personal property for all purposes), consisting of
(i) such Member's interest in profits, losses, allocations and distributions,
(ii) such Member's right to vote or grant or withhold consents with respect to
Company matters as provided herein or in the Delaware Act and (iii) such
Member's other rights and privileges as provided herein or under the Delaware
Act.

         "Involuntary Dissolution Event" shall mean any event described in
Section 8.1(d) hereof if no Member filed a motion, petition, or other request
before a court or an administrative agency seeking a dissolution of the Company.

         "Joint Venture Agreement" shall have the meaning set forth in the
recitals hereto.

         "Law" means any federal, state, foreign or local law, constitutional
provision, code, statute, ordinance, rule, regulation, order, judgment or decree
of any governmental authority.

         "Manager" means a person duly elected to the Board pursuant to the
provisions of Section 4.2 or Section 4.3 hereof. Each Manager shall constitute a
"manager" of the Company as such term is defined in Section 18-101 of the
Delaware Act.

         "Members" mean WISCO and G-P and all other Persons admitted as
additional or substituted Members pursuant to this Agreement, so long as they
remain Members. Each Member shall constitute a "Member" of the Company, as such
term is defined in Section 18-101 of the Delaware Act.

         "Net Debt" means, at any date of determination, the amount of all Debt
of the Company Group on such date, less all Cash Balances held by or on behalf
of any Company Group Member and less loans made to the Members as of such date.

         "Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(b)(1) and 1.704-2(c) of the Regulations.

         "Obligations" shall have the meaning set forth in Section 3.17(b).

         "Nonrecourse Liability" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.

         "Option Closing" shall have the meaning set forth in Section 7.2(c).

         "Option Right" shall have the meaning set forth in Section 7.2(c).

         "Partner Nonrecourse Debt" has the same meaning as the term "partner
nonrecourse debt" set forth in Section 1.704-2(b)(4) of the Regulations.

         "Partner Nonrecourse Debt Minimum Gain" means an amount, with respect
to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that
would result if such Partner

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Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Section 1.704-2(i)(3) of the Regulations.

         "Partner Nonrecourse Deductions" has the same meaning as the term
"partner nonrecourse deductions" set forth in Sections 1.704-2(i)(1) and
1.704-2(i)(2) of the Regulations.

         "Partnership Minimum Gain" has the meaning set forth in Sections
1.704-2(b)(2) and 1.704-2(d) of the Regulations.

         "Percentage Interests" means the respective proportions in which the
Members hold their Interests in the Company, determined for any Member as of any
date by dividing the number of Units held by such Member on such date by the
total number of Units outstanding and held by all Members as of such date.

         "Permanent Company Debt" shall mean the indebtedness incurred by the
Company to refinance the Company Debt, as further described in Section 3.17
hereof, and shall include, where the context requires, any replacement or
refinancing thereof.

         "Person" shall mean an individual, a corporation, a partnership, an
association, a trust, a limited liability company, a governmental authority or
any other entity or organization.

         "Products" shall have the meaning set forth in Section 10.13(a).

         "Profits" and "Losses" means, for each Fiscal Year, an amount equal to
the Company's taxable income or loss for such Fiscal Year, determined in
accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

               (i) Any income of the Company that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses pursuant
to this definition of "Profits" and "Losses" shall be added to such taxable
income or loss;

               (ii) Any expenditures of the Company described in Code Section
705(a)(2)(B), or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses pursuant to this definition of "Profits" and
"Losses" shall be subtracted from such taxable income or loss;

               (iii) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraphs (ii) or (iii) of the definition of "Gross
Asset Value," the amount of such adjustment shall be taken into account as gain
or loss from the disposition of such asset for purposes of computing Profits or
Losses;

               (iv) Gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;

               (v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Allocation Year,
computed in accordance with the definition of "Depreciation";

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               (vi) To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account
in determining Capital Accounts as a result of a distribution other than in
complete liquidation of a Member's Interest, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing Profits or Losses; and

               (vii) Any items which are specially allocated pursuant to Section
3.7 or Section 3.8 shall not be taken into account in computing Profits or
Losses.

The amounts of the items of Company income, gain, loss or deduction available to
be specially allocated pursuant to Sections 3.7 and 3.8 shall be determined by
applying rules analogous to those set forth in subparagraphs (i) through (vi)
above.

         "Put Price" shall have the meaning set forth in Section 7.2(a).

         "Regulations" means the regulations promulgated by the U.S. Treasury
Department pursuant to the Code.

         "Regulatory Allocations" shall have the meaning set forth in Section
3.8.

         "Special Distribution" shall have the meaning set forth in Section
2.8(b) of the Joint Venture Agreement.

         "Subsidiary" means, with respect to any Person, any corporation,
partnership, association, trust, limited liability company or other legal entity
or organization of which such person, either directly or indirectly or through
or together with any other Subsidiary of such Person, owns more than 50% of the
equity interests.

         "Tax Matters Member" shall have the meaning set forth in Section 3.12.

         "Tax Opinion" means an opinion of CSK's legal counsel or public
accounting firm to the effect that it is substantially more likely than not that
(1) the transfer of the WISCO Business constituted a sale to the Company (in
whole or in part) for federal income tax purposes, or (2) the Special
Distribution is taxable to WISCO in whole or in part. Such opinion must be based
upon an addition, amendment, or other modification to the Code or the
Regulations, the issuance by the Internal Revenue Service (or any other
administrative agency or authority having jurisdiction over the interpretation,
administration, or enforcement of federal income tax laws) of a ruling, notice,
or other administrative pronouncement, or the issuance or publication of a
decision by a court, in any such event occurring after the Closing but before
the eighth anniversary of the Closing Date.

         "Transfer" shall have the meaning set forth in Section 7.1.

         "Units" means the equal proportional units into which Interests in the
Company shall be divided, which term may include fractions of Units as well as
whole Units. Subject to the Capital Contribution obligations of the Members
hereunder, all Units issued hereunder shall be fully paid and non-assessable.

                                      -9-
<PAGE>

         "Voluntary Dissolution Event" shall mean any event described in Section
8.1 hereof other than an Involuntary Dissolution Event.

         "Voluntary Dissolution Event Without WISCO's Consent" shall mean any
Voluntary Dissolution Event which is described in Section 8.1 hereof if the
event occurs without the consent of the WISCO Member. For this purpose, the
WISCO Member shall be deemed to have consented to (i) any action approved by the
Manager designated by the WISCO Member, (ii) any reduction of the WISCO Member's
(or the CSK Group's) ownership of the outstanding Units below 5% if such
reduction occurs because of an exercise of the WISCO Put, and (iii) the
dissolution of the Company under Section 8.1(d) hereof at the request of the
WISCO Member.

         "WISCO" shall have the meaning set forth in the preamble hereto.

         "WISCO Business" shall have the meaning set forth in the Joint Venture
Agreement.

         "WISCO Indemnity Period" shall have the meaning set forth in Section
3.17.

         "WISCO Manager" shall mean a Manager designated by the WISCO Member.

         "WISCO Member" means, collectively if more than one, the CSK Group
Affiliate(s) which from time to time is (are) Member(s) of the Company.

         "WISCO Put" shall have the meaning set forth in Section 7.2(a).

         SECTION 1.2 RULES OF CONSTRUCTION.

         (a) Words used herein, regardless of the number and gender used, shall
be deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context requires, and, as
used herein, unless the context requires otherwise, the words "hereof",
"herein", and "hereunder" and words of similar import shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.

         (b) A reference to any statute or statutory provision shall be
construed as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted.

         (c) The terms "dollars" and "$" shall mean United States dollars.

         (d) The term "including" shall be deemed to mean "including without
limitation."

         (e) Article and section headings used in this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.

         (f) This Agreement is among financially sophisticated and knowledgeable
parties and is entered into by the parties in reliance upon the economic and
legal bargains contained herein and shall be interpreted and construed in a fair
and impartial manner without regard to such factors as the party who prepared,
or caused the preparation of, this Agreement or the relative bargaining power of
the parties.

                                      -10-
<PAGE>

                                   ARTICLE II
                                 GENERAL MATTERS

         SECTION 2.1 FORMATION.

         The Members have caused the formation of the Company as a Delaware
Limited Liability Company pursuant to the Delaware Act by filing a Certificate
of Formation of the Company (the "Certificate of Formation") with the Delaware
Secretary of State in accordance with the Delaware Act and, in connection
therewith, each Member has contributed $10.00 to the capital of the Company
prior to the date hereof. The rights and liabilities of the Members shall be as
provided in the Delaware Act, except as otherwise provided in this Agreement.

         SECTION 2.2 PURPOSES AND BUSINESS.

         Except as may otherwise be approved by the Board (which approval must
include the affirmative vote or consent of the WISCO Manager), the purpose of
the Company and the Company Group shall be to engage in any lawful business in
any way related to the business of producing, licensing for production and
selling commercial tissue products and related products for the "away from home"
market, on a worldwide basis. The Company shall have all powers necessary or
desirable to accomplish the aforesaid purposes. In connection therewith, the
Company may engage in and enter into any and all activities, contracts and
agreements related or incident to the above-stated purposes as the Board may
determine to be appropriate from time to time. The Company shall have the power
to do all things necessary, appropriate, advisable, convenient, or incidental in
connection with the fulfillment of its business purposes. The Company shall not,
and shall not permit any of its Subsidiaries to, engage in any other activity or
business except to the extent approved by the Board (which approval must include
the affirmative vote or consent of the WISCO Manager).

         SECTION 2.3 OFFICES.

         (a) The principal executive offices of the Company shall be located at
55 Park Place, Atlanta, Georgia at the offices of G-P or such other location as
determined by the Board from time to time.

         (b) The registered office of the Company in the State of Delaware is
located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The registered agent of the Company for service of process at such
address is The Corporation Trust Company. Such registered office or registered
agent may be changed by the Board from time to time.

         SECTION 2.4 NAME.

         The name of the Company shall be Georgia-Pacific Tissue, LLC or such
other name as the Board may from time to time select.

         SECTION 2.5 TERM.

         The existence of the Company commenced on the date its Certificate of
Formation was filed with the Secretary of State of the State of Delaware, and
shall continue in perpetuity unless dissolved in accordance with Section 8.1.

         SECTION 2.6 MEMBERS.

                                      -11-
<PAGE>

         The name and business or mailing address of each Member of the Company
are set forth on Schedule 1 to this Agreement. The Board shall cause Schedule 1
to be amended from time to time to reflect the addition or retirement of
Members, or transfers of Units, in accordance with the terms of this Agreement.
Except in connection with a permitted redemption or transfer of a Member's
entire Interest in accordance with the terms of this Agreement, no Member shall
have the right to retire from the Company prior to the termination of the
Company following dissolution and winding up.

                                   ARTICLE III
                            FINANCIAL AND TAX MATTERS

         SECTION 3.1 CAPITAL CONTRIBUTIONS.

         (a) Simultaneously with the execution of this Agreement, WISCO is
contributing to the Company the WISCO Business, as defined and identified in the
Joint Venture Agreement, with an aggregate agreed value of $775,000,000 in
exchange for 5 Units, which number of Units reflects the Special Distribution.
Specifically, the various categories of assets comprising the Contributed Assets
of WISCO are as follows:

                           Shares of Wisconsin Tissue
                               de Mexico, S.A.
                           Shares of Wisconsin Tissue
                                Management LLC
                           Interest in Alsip Condominium Association
                           Working Capital
                           Land
                           Buildings
                           Equipment
                           Inventory
                           Goodwill

For purposes of maintaining the Company's books in accordance with Regulations
Section 1.704-1(b)(2)(iv), the initial Gross Asset Value of each asset within
each of the above categories shall be based on the relative Fair Market Values
of the assets within each category.

         (b) Simultaneously with the execution of this Agreement, G-P is
contributing to the Company the G-P Contributed Assets, as defined and
identified in the Joint Venture Agreement, with an aggregate agreed value of
$376,400,000 in exchange for 95 Units, which number of Units reflects the
Special Distribution. Specifically, the various categories of assets comprising
the Contributed Assets of G-P are as follows:

                           Working Capital
                           Land
                           Buildings
                           Equipment
                           Inventory
                           Goodwill

                                      -12-
<PAGE>

For purposes of maintaining the Company's books in accordance with Regulations
Section 1.704-1(b)(2)(iv), the initial Gross Asset Value of each asset within
each of the above categories shall be based on the relative Fair Market Values
of the assets within each category.

         (c) Except as may otherwise be unanimously agreed to in writing by the
Members, the Members shall have no right or obligation to make any additional
Capital Contributions to the Company.

         (d) Unless otherwise unanimously agreed by the Members, any additional
Capital Contributions made by the Members shall be made in accordance with the
Members' respective Percentage Interests, and additional Units shall be issued
in respect of any such additional Capital Contributions pro rata based on the
Members' respective Percentage Interests.

         SECTION 3.2 LOANS FROM MEMBERS.

         Loans by a Member to the Company shall not be considered Capital
Contributions. Such loans shall bear interest at arm's length market rates and
may contain other customary commercial terms as agreed by the Company and the
Member; provided, however, that any such loans shall be fully subordinated to
the Company Debt and the Permanent Company Debt in accordance with terms that
are reasonably acceptable to each Member. If any Member shall advance funds to
the Company in excess of the amounts required hereunder to be contributed by
such Member to the capital of the Company, such advances shall not increase the
Capital Account of such Member. The amounts of any such advances shall be a debt
of the Company to such Member and shall be payable or collectible only out of
Company assets in accordance with the terms and conditions upon which such
advances are made. The repayment of debt owed to a Member upon liquidation of
the Company shall be subject to the order of priority set forth in Section 8.2.

         SECTION 3.3 RESTRICTIONS RELATING TO CAPITAL; COMPANY PROPERTY.

         (a) Except as otherwise provided herein or by the Delaware Act, no
Member shall have the right to withdraw, or receive any return of, all or a
portion of such Member's Capital Contribution, nor shall any Member have the
right to demand and receive property other than cash in return for its Capital
Contribution, except as provided in Section 8.3(a).

         (b) No interest shall be paid by the Company on Capital Contributions
or on balances in Members' Capital Accounts.

         (c) All Company Property, whether contributed by a Member or otherwise
acquired by the Company, shall be owned by the Company as a separate legal
entity and no Member shall have any right of partition with respect to any
Company Property. The Board shall cause the Company to execute, file and record
such documents as may be necessary or appropriate to reflect the Company's
ownership of Company Property in appropriate public offices.

         (d) No Member shall be liable to the Company or to any other Member to
restore any deficit balance in its Capital Account (except as may be required by
the Delaware Act) or to reimburse any other Member for any portion of such other
Member's investment in the Company. No Member shall have priority over any other
Member, either as to the return of its Capital Contribution or as to income,
losses, interest, returns, or distributions, except for the priority of the
WISCO Member with respect to the Special Distributions and as set forth in
Section 8.3(a).

                                      -13-
<PAGE>

         (e) The Company shall not enter into any transaction, other than the
Ancillary Agreements, with any Member or any Affiliate of any Member except on
arms length terms.

         SECTION 3.4 TAX TREATMENT.

         It is the intention of the Members that the Company shall be taxed as a
"partnership" for United States federal, state and local income tax purposes,
and, except as otherwise required by law, no Member shall take any action
inconsistent with the classification of the Company as a partnership for U.S.
tax purposes, including any action to cause the Company to be treated as an
association taxable as a corporation for U.S. tax purposes.

         SECTION 3.5 ALLOCATION OF PROFITS.

         After giving effect to the special allocations set forth in Sections
3.7 and 3.8, Profits for any Fiscal Year shall be allocated among the Members in
proportion to their respective Percentage Interests.

         SECTION 3.6 ALLOCATION OF LOSSES.

         After giving effect to the special allocations set forth in Sections
3.7 and 3.8, Losses for any Fiscal Year shall be allocated as set forth in
Section 3.6(a), subject to the limitation in Section 3.6(b).

         (a) Losses for any Fiscal Year shall be allocated among the Members in
proportion to their respective Percentage Interests.

         (b) The Losses allocated pursuant to Section 3.6(a) shall not exceed
the maximum amount of Losses that can be so allocated without causing any Member
to have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In
the event some but not all of the Members would have Adjusted Capital Account
Deficits as a consequence of an allocation of Losses pursuant to Section 3.6(a),
the limitation set forth in this Section 3.6(b) shall be applied on a Member by
Member basis so as to allocate the maximum permissible Losses to each Member
under Section 1.704-1(b)(2)(ii)(d) of the Regulations.

         SECTION 3.7 SPECIAL ALLOCATIONS.

         The following special allocations shall be made in the following order:

         (a) Minimum Gain Chargeback Except as otherwise provided in Section
1.704-2(f) of the Regulations, notwithstanding any other provision of this
Article III, if there is a net decrease in Partnership Minimum Gain during any
Fiscal Year, each Member shall be specially allocated items of Company income
and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an
amount equal to such Member's share of the net decrease in Partnership Minimum
Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The items to
be so allocated shall be determined in accordance with Sections 1.704-2(f)(6)
and 1.704-2(j)(2) of the Regulations. This Section 3.7(a) is intended to comply
with the minimum gain chargeback requirement in Section 1.704-2(f) of the
Regulations and shall be interpreted consistently therewith.

                                      -14-
<PAGE>

         (b) Partner Minimum Gain Chargeback. Except as otherwise provided in
Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of
this Article III, if there is a net decrease in Partner Nonrecourse Debt Minimum
Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each
Member who has a share of the Partner Nonrecourse Debt Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in accordance with Section
1.704-2(i)(5) of the Regulations, shall be specially allocated items of Company
income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal
Years) in an amount equal to such Member's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The items to
be so allocated shall be determined in accordance with Sections 1.704-2(i)(4)
and 1.704-2(j)(2) of the Regulations. This Section 3.7(b) is intended to comply
with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of the
Regulations and shall be interpreted consistently therewith.

         (c) Qualified Income Offset. In the event any Member unexpectedly
receives any adjustments, allocations, or distributions described in Section
1.704-1(b)(2)(ii)(d)(4), Section 1.704-1(b)(2)(ii)(d)(5) or Section
1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Company income and gain
shall be specially allocated to each such Member in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this Section 3.7(c) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Article III have been tentatively made as
if this Section 3.7(c) were not in the Agreement.

         (d) Gross Income Allocation. In the event any Member has a deficit
Capital Account at the end of any Fiscal Year which is in excess of the sum of
(i) the amount such Member is treated as obligated to restore pursuant to
Regulations Section 1.704-1(b)(2)(ii)(c) by virtue of such Partner's guarantee
or indemnity with respect to the Company Debt, and (ii) the amount such Member
is deemed to be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be
specially allocated items of Company income and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant to this
Section 3.7(d) shall be made only if and to the extent that such Member would
have a deficit Capital Account in excess of such sum after all other allocations
provided for in this Article III have been made as if Section 3.7(c) and this
Section 3.7(d) were not in the Agreement.

         (e) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions
for any Fiscal Year shall be allocated to the Member who bears the economic risk
of loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Regulations Section
1.704-2(i)(1).

         (f) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year
shall be allocated to the Members in proportion to their respective Percentage
Interests.

         (g) Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be
taken into account in determining Capital Accounts as the result of a
distribution to a Member in complete liquidation of its interest in the Company,
the amount of such adjustment to Capital Accounts shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment

                                      -15-
<PAGE>

decreases such basis) and such gain or loss shall be specially allocated to the
Members in accordance with their Interests in the Company in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom
such distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.

         (h) In the event that the Company makes a distribution to WISCO
pursuant to Section 3.15 hereof, then WISCO shall be specially allocated items
of Company income and gain from each Fiscal Year in which such distribution is
made (and, if necessary, subsequent Fiscal Years in the case of distributions
under Section 3.15(a) or (b)) in an amount equal to the total of such
distributions made to WISCO.

         SECTION 3.8 OFFSETTING SPECIAL ALLOCATIONS.

         The allocations set forth in Sections 3.6(b), and 3.7(a), (b), (c),
(d), (e), (f), and (g) (the "Regulatory Allocations") are intended to comply
with certain requirements of the Regulations. It is the intent of the Members
that, to the extent possible, all Regulatory Allocations shall be offset either
with other Regulatory Allocations or with special allocations of other items of
Company income, gain, loss or deduction pursuant to this Section 3.8. Therefore,
notwithstanding any other provision of this Article III (other than the
Regulatory Allocations), the Board shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of the Agreement and all Company items were allocated pursuant to
Sections 3.5, 3.6(a) and 3.7(h). In exercising its discretion under this Section
3.8, the Board shall take into account future Regulatory Allocations under
Sections 3.7(a) and 3.7(b) that, although not yet made, are likely to offset
other Regulatory Allocations previously made under Sections 3.7(e) and 3.7(f).

         SECTION 3.9 OTHER ALLOCATION RULES.

         (a) Profits, Losses, and any other items of income, gain, loss or
deduction shall be allocated to the Members pursuant to this Article III as of
the last day of each Fiscal Year; provided that Profits, Losses and such other
items shall also be allocated at such times as the Gross Asset Values of Company
Property are adjusted pursuant to subparagraph (ii) of the definition of Gross
Asset Value.

         (b) For purposes of determining the Profits, Losses, or any other items
allocable to any period, Profits, Losses, and any such other items shall be
determined on a daily, monthly, or other basis, as determined by the Board using
any permissible method under Code Section 706 and the Regulations thereunder.

         (c) All allocations to the Members pursuant to this Article III shall,
except as otherwise provided, be divided among them in proportion to their
respective Percentage Interests.

         (d) The Members are aware of the income tax consequences of the
allocations made by this Article III and hereby agree to be bound by the
provisions of this Article III in reporting their shares of Company income and
loss for income tax purposes, except to the extent otherwise required by law.

         (e) Solely for purposes of determining a Member's proportionate share
of the "excess nonrecourse liabilities" of the Company within the meaning of
Regulations

                                      -16-
<PAGE>

Section 1.752-3(a)(3), the Members' interests in Company profits are
in proportion to their Percentage Interests.

         (f) To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the Board shall endeavor to treat distributions as having been made
from the proceeds of a Nonrecourse Liability or a Partner Nonrecourse Debt only
to the extent that such distributions would cause or increase an Adjusted
Capital Account Deficit for any Member.

         SECTION 3.10 TAX ELECTIONS.

         The Company shall make the following elections on the appropriate tax
returns:

         (a) to adopt the accrual method of accounting, if permitted by the
Code, and to keep the Company's books and records in a manner consistent
therewith;

         (b) to elect to amortize the organizational expenses and the start-up
expenditures of the Company ratably over a period of sixty (60) months as
permitted by Sections 709(b) and 195(b) of the Code;

         (c) if so requested by any Member, an election under Section 754 of the
Code to adjust the basis of the Company's property in the circumstances
described therein; and

         (d) any other election not inconsistent with this Agreement or the
Joint Venture Agreement that the Tax Matters Member may deem appropriate and in
the best interests of the Members.

Neither the Company nor any Member may make an election for the Company to be
excluded from the application of the provisions of subchapter K of chapter 1 of
subtitle A of the Code or any similar provisions of applicable state law.

         SECTION 3.11 TAX ALLOCATIONS; CODE SECTION 704(C).

         In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss, and deduction with respect to any Contributed Asset shall,
solely for tax purposes, be allocated among the Members so as to take account of
any variation between the adjusted basis of such Contributed Asset to the
Company for federal income tax purposes and its initial Gross Asset Value
(computed in accordance with subparagraph (i) of the definition of "Gross Asset
Value").

         In addition, in the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraph (ii) of the definition of the "Gross Asset
Value," subsequent allocations of income, gain, loss, and deduction with respect
to such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Regulations thereunder.

         The Company shall adopt and use only the "traditional method" permitted
by the Regulations under Code Section 704(c), and therefore shall not make any
curative allocations and/or remedial allocations. Allocations pursuant to this
Section 3.11 are solely for purposes of federal, state, and local taxes and
shall not affect, or in any way be taken into account in computing, any Member's
Capital Account or share of Profits, Losses, other items, or distributions
pursuant to any provision of this Agreement.

                                      -17-
<PAGE>

         Except as otherwise provided in this Agreement, all items of Company
income, gain, loss, deduction, and any other allocations not otherwise provided
for shall be divided among the Members in the same proportions as the Percentage
Interest for the Fiscal Year.

         SECTION 3.12 TAX MATTERS MEMBER.

         The Member having the highest Percentage Interest shall be the tax
matters partner (the "Tax Matters Member") of the Company pursuant to Section
6231(a)(7) of the Code. Such Member shall take such action as may be necessary
to cause each other Member to become a notice partner within the meaning of
Section 6223 of the Code. Such Member shall inform each other Member of all
significant matters that may come to its attention in its capacity as Tax
Matters Member by giving prompt notice thereof. The Company agrees to defend,
indemnify and hold harmless the Tax Matters Member from and against all claims
and damages relating to actions taken in good faith in discharging its
responsibilities as Tax Matters Member.

         SECTION 3.13 REGULAR DISTRIBUTION POLICY.

         (a) The Board shall determine from time to time, in its complete
discretion whether and to what extent the Company shall distribute any portion
of available Distributable Cash to Members; provided, however, that aside from
the Special Distribution, distributions declared or made on or before January 1,
2002 shall not exceed the Company's "net cash flow from operations" as
determined under Section 1.707-4(b), unless unanimously approved by the Members.
All funds distributed to the Members pursuant to this Section 3.12 shall be
distributed to them in accordance with their respective Percentage Interests.

         (b) Subject to Section 8.3 hereof, to the extent that the Board
approves any distribution that consists of property of a type or in a form other
than cash, the types and forms of such property shall be allocated in an
equitable manner among the Members entitled thereto, such that each Member
shall, except for immaterial variances, receive the same type or form of
property.

         (c) Any distributions to be made by the Company shall be made only to
the extent permitted by the Company Debt and any other Financing Agreements to
which any Company Group Affiliate is a party and only if and to the extent
permitted by applicable Law (including, without limitation, Sections 18-607 and
18-804 of the Delaware Act).

         SECTION 3.14 SPECIAL DISTRIBUTION.

         Simultaneous with the Closing, the Company shall use the net proceeds
of the Company Debt (after deducting borrowing expenses) to make the Special
Distribution to the WISCO Member in an amount that will result in the WISCO
Member's Percentage Interest equaling 5%. The amount of the Special Distribution
shall be determined in accordance with Section 2.1(b) of the Joint Venture
Agreement.

         SECTION 3.15 ACCELERATED GAINS TAX LIABILITY OF WISCO.

         (a) If (on one or more occasions) prior to the tenth anniversary of the
Closing Date, the Company sells or otherwise disposes of all or any part of the
WISCO Contributed Assets, and if WISCO therefore incurs and pays (either
directly or as an offset against a tax refund or overpayment of tax) federal
and/or state income tax liabilities (on a cumulative basis, taking into account
all such sales or other dispositions) exceeding $22 million as a result of the
allocation to it of income or gain(s)

                                      -18-
<PAGE>

recognized by the Company from such sales or dispositions (up to the total Built
In Gain with respect to the WISCO Contributed Assets sold or disposed of,
determined by assuming, absent a Final Determination or receipt by CSK of a Tax
Opinion, that no income or gain is recognized by WISCO on the transfer of such
assets to the Company), then the Company shall distribute to WISCO (after each
such occasion and within 10 days after WISCO has demonstrated to the Company's
reasonable satisfaction the appropriate amount to be distributed) an amount of
money equal to the actual amount, if any, of WISCO's total federal and state
income tax liability in excess of $22 million resulting from the allocation to
it of income or gain so recognized by the Company. No distribution to WISCO
under this Section 3.15(a), however, shall be made with respect to the Company's
sale of inventory, the collection or disposition of accounts receivable, or the
retirement of other assets in the ordinary course of operating the WISCO
Business (it being understood that the disposition or partial liquidation of a
manufacturing facility or of any stock or other equity interest in any WISCO
Contributed Subsidiary shall not be considered to be a transaction in the
ordinary course of business) regardless of whether the $22 million limit
otherwise has been exceeded.

         (b) (i) Subject to the compliance of WISCO with its obligations under
clause (ii) of this Section 3.15(b), if (on one or more occasions) the Company
or G-P (other than satisfying its obligations under the G-P Guarantee) pays all
or any part of the principal amount of the Permanent Company Debt prior to the
thirtieth (30th) anniversary of the Closing Date, or if the Company takes any
action prior to such thirtieth (30th) anniversary that would result in a
reduction, after the funding of the Permanent Company Debt, of the portion of
such debt for which WISCO "bears the economic risk of loss" within the meaning
of Section 1.752-2 of the Regulations, then the Company shall distribute to
WISCO (after each such occasion and within 10 days after WISCO has demonstrated
to the Company's reasonable satisfaction the appropriate amount to be
distributed) an amount of money equal to the actual increase, if any, in WISCO's
total federal and state income tax liability incurred and paid by WISCO (either
directly or as an offset against a tax refund or overpayment of tax) as a result
of such payment or other action by the Company. Similar principles shall apply
if the Company repays the principal amount of the Company Debt other than by
replacing such debt with the Permanent Company Debt as provided in Section 3.17
hereof. WISCO has determined that it "bears the economic risk of loss" within
such meaning for the Company Debt up to the amount of the Special Distribution
as of the Closing Date and acknowledges that it will need to make a similar
determination with respect to the Permanent Company Debt, and the Members
acknowledge that no distribution will be made pursuant to this Section 3.15(b)
to compensate WISCO for any tax liability attributable to the incorrectness of
WISCO's determinations.

         (ii) The Members acknowledge that the Company shall replace the Company
Debt and may replace the Permanent Company Debt from time to time with other
indebtedness so long as (x) such replacement does not result in a reduction in
the total amount of Company indebtedness for which WISCO "bears the economic
risk of loss," (y) such indebtedness is on terms that are no less favorable to
the Company (taking into account the Company's credit rating) than prevailing
terms in the credit markets in all material respects at the time such
indebtedness is incurred, and (z) the Company shall have provided notice to
WISCO of the terms of such indebtedness as soon after agreeing to such terms as
is reasonably practicable. WISCO hereby agrees to cooperate to the extent
reasonably required to facilitate such one or more refinancings, including but
not limited to, executing agreements (in form and substance reasonably
satisfactory to WISCO) necessary for it to "bear the economic risk of loss" for
such replacement indebtedness in an amount not less than the Special
Distribution. In such event, any such replacement indebtedness (and any and all
subsequent replacement indebtedness) shall be treated as Permanent Company Debt
for purposes of this Section 3.15(b).

         (c) For the avoidance of doubt, the Members acknowledge that no
distribution will be made pursuant to this Section 3.15 as a result of the
exercise of the WISCO Put, nor shall any

                                      -19-
<PAGE>

distribution be made pursuant to this Section 3.15 to compensate WISCO for any
tax liability resulting from any treatment of the contribution of the WISCO
Contributed Assets to the Company as a sale in whole or in part for federal
and/or state income tax purposes (such treatment being evidenced by a Final
Determination or by a Tax Opinion). In making any determination of the
appropriate amount to be distributed pursuant to this Section 3.15, any effect
on WISCO's taxable income and/or gain resulting from any distribution made to
WISCO pursuant to this Section 3.15, or from any corresponding special
allocation of income under Section 3.7(h), shall be disregarded.

         (d) If G-P purchases WISCO's Interest in the Company pursuant to
Section 7.2(b) hereof, or if a Voluntary Dissolution Event Without WISCO's
Consent occurs, then the Company shall distribute to WISCO an amount of money
equal to the lesser of the following two amounts: (i) the amount of federal and
state income tax liability that WISCO actually incurred and paid (either
directly or as an offset against a tax refund or overpayment of tax) as a result
of the income and/or gain it recognized on the sale of its Interest to G-P (or
an Affiliate of G-P) pursuant to Section 7.2(b) or Section 8.5(b) hereof, or
upon the receipt of distributions in liquidation of its Interest pursuant to
Section 8.2 hereof, or (ii) the amount of federal and state income tax liability
that WISCO would have incurred on the sale of its Interest to G-P (or an
Affiliate of G-P), or upon the receipt of distributions in liquidation of its
Interest, if the income or gain recognized from such sale or liquidation were an
amount equal to the excess of (x) the aggregate Built In Gain in all of the
WISCO Contributed Assets over (y) any such Built In Gain previously recognized
by WISCO. For purposes of clause (y) of the preceding sentence, the following
items shall be treated as recognized Built In Gain: (1) any gain actually
recognized by WISCO from action taken by the Company with respect to the Company
Debt if such action would give rise to a distribution obligation under Section
3.15(b) and (2) any Built In Gain in WISCO Contributed Assets consisting of
inventory or accounts receivable (whether or not recognized). For purposes of
this Section 3.15(d), in computing the amount of income and/or gain recognized
by WISCO on the sale its Interest pursuant to Section 7.2(b) or Section 8.5(b)
hereof, or upon the receipt of distributions in liquidation of its Interest
pursuant to Section 8.2 hereof, there shall be included in the amount realized
by WISCO the entire amount of Company Debt (including for this purpose the
Permanent Company Debt) for which WISCO "bears the economic risk of loss" within
the meaning of Section 1.752-2 of the Regulations immediately before such sale
or liquidation, regardless of whether the indemnity agreement or other
arrangement causing WISCO to "bear the economic risk of loss" remains in effect
after such sale or liquidation. The Company shall distribute to WISCO the amount
determined in this Section 3.15(d) within 10 days after WISCO has demonstrated
to the Company's reasonable satisfaction the amount to be distributed. If,
following a Voluntary Dissolution Event Without WISCO's Consent, the Company
does not have sufficient funds to make the distribution to WISCO required under
this Section 3.15(d), G-P shall pay WISCO the amount of any shortfall.

         (e) If any distribution to WISCO pursuant to this Section 3.15 is
smaller than it otherwise would have been because the event triggering the
Company's obligation to make the distribution reduced, eliminated, or prevented
the creation of or addition to a net operating loss carryover, capital loss
carryover, tax credit carryover, or other tax attribute of WISCO (collectively,
a "WISCO Tax Attribute"), then the Company shall distribute to WISCO (within 10
days after WISCO has demonstrated to the Company's reasonable satisfaction the
amount to be distributed) an amount equal to any actual increase in WISCO's
federal and state income tax liability in one or more prior or subsequent
taxable years of WISCO, but only to the extent that such increased liability is
attributable to the decrease in such WISCO Tax Attribute.

         (f) Upon the occurrence of an event requiring a distribution to WISCO
under Section 3.15(b) or (d), the amount of such distribution shall be increased
pursuant to this Section 3.15(f) if WISCO has theretofore incurred and paid
(either directly or as an offset against a tax refund or

                                      -20-
<PAGE>

overpayment of tax), and has not been indemnified by the Company pursuant to
Section 3.15(a) (due to the $22 million limit), federal and/or state income tax
liabilities resulting from the allocation to WISCO of Built In Gain in the WISCO
Contributed Assets upon the Company's sale or other disposition of all or any
part of such assets. The amount of the increased distribution, if any, under
this Section 3.15(f) shall be determined by multiplying (i) the federal and/or
state income tax liabilities actually incurred and paid by WISCO (either
directly or as an offset against a tax refund or overpayment of tax) from asset
sales or other dispositions by the Company to the extent that such liabilities
were not indemnified by the Company under Section 3.15(a) by reason of the $22
million limit times (ii) the "Built In Gain Percentage." For purposes of this
Section 3.15(f), the "Built In Gain Percentage" in the case of a distribution to
WISCO pursuant to Section 3.15(b) is the percentage obtained by dividing (i) the
income or gain actually recognized by WISCO from action taken by the Company
with respect to the Company Debt or the Permanent Company Debt if such action
would give rise to a distribution obligation under Section 3.15(b) by (ii) the
aggregate Built In Gain in all of the WISCO Contributed Assets. In the case of a
distribution to WISCO pursuant to Section 3.15(d), the "Built In Gain
Percentage" is 100%.

         (h) Notwithstanding anything to the contrary in this Section 3.15, no
distribution shall be made to WISCO pursuant to this Section 3.15 prior to the
day after the second anniversary of the Closing Date. If a distribution
otherwise would have been due to WISCO under this Section 3.15 before the second
anniversary of the Closing Date, the amount of the distribution shall be
increased by an amount computed like interest at the prime rate published in the
"Money Rates" table (or any successor thereto) of The Wall Street Journal from
time to time from the date such distribution otherwise would have been due.

         (i) For purposes of applying this Section 3.15, the Company's adjusted
basis for federal and state income tax purposes in the stock of Wisconsin Tissue
de Mexico, S.A. de C.V. immediately after the contribution of such stock to the
Company shall be increased by the amount of any intercompany loss with respect
to such stock recognized by the CSK Group as a result of the contribution. WISCO
shall inform the Company of the amount of any such recognized loss on or before
September 15, 2000, and shall inform the Company of any adjustments to the
amount of such recognized loss promptly after any such adjustment is made
(whether by the CSK Group or by the Internal Revenue Service).

         SECTION 3.16 SHARING OF COMPANY TAX BENEFITS.

         (a) (i) The Members believe that the contribution of the WISCO Business
constitutes a nonrecognition transaction pursuant to Section 721(a) of the Code,
and the Members and the Company shall report and otherwise treat the transfer of
the WISCO Contributed Assets to the Company as solely a nonrecognition
transaction pursuant to Section 721(a) of the Code on all relevant tax returns
and reports unless there is a Final Determination to the contrary or CSK
receives a Tax Opinion to the contrary. In addition, unless there is a Final
Determination to the contrary or CSK receives a Tax Opinion to the contrary, the
Members and the Company agree to treat any excess of the Special Distribution
over WISCO's "allocable share" of the Company Debt (within the meaning of
Regulations Section 1.707-5(b)), and any excess of the Special Distribution over
WISCO's "allocable share" of the Permanent Company Debt (within the meaning of
Regulations Section 1.707-5(b)), as reimbursements of capital expenditures
incurred by WISCO with respect to the WISCO Contributed Assets during the
two-year period prior to the Closing Date to the extent permitted by Regulations
Section 1.707-4(d). If CSK receives a Tax Opinion or, prior to the eighth
anniversary of the Closing Date, there is a Final Determination that the
transfer of the WISCO Business to the Company constituted a sale to the Company
(in whole or in part) for federal income tax purposes, then WISCO and G-P shall
jointly

                                      -21-
<PAGE>

determine the change in the Company's adjusted basis for federal income
tax purposes in the WISCO Contributed Assets (such change being referred to
herein as the "Sale Step-Up").

         (ii) If the Company is dissolved because of an Involuntary Dissolution
Event and WISCO recognizes taxable income and/or gain resulting from the receipt
of liquidating distributions pursuant to Section 8.2 hereof or upon the sale of
its Interest pursuant to Section 8.5 hereof, then WISCO and G-P shall jointly
determine the change, if any, in the Company's (or G-P's) adjusted basis for
federal income tax purposes in the WISCO Contributed Assets (such change being
referred to herein as the "Involuntary Dissolution Step-Up," and together with
the Sale Step-Up, the "Step-Up").

         (b) Within 10 days after G-P or an Affiliate of G-P files any federal
or state income tax return (including for this purpose any amended return or
claim for refund) with the Internal Revenue Service or the applicable state
income tax authority, G-P shall pay to WISCO an amount equal to one-half of the
net income tax benefit to G-P or the Affiliate reflected on such return to the
extent that such benefit is attributable to the Step-Up. In the case of any tax
return described in the preceding sentence in which a net operating loss or a
net capital loss is reported, the net income tax benefit attributable to the
Step-Up shall be determined as if each deduction or recognized loss of G-P (or
its Affiliate) claimed on such return were used in proportion to (i) the total
amount of deductions or losses claimed on such return BEFORE creating any net
operating loss or net capital loss, divided by (ii) the total amount of
deductions or losses claimed on such return (taking into account the amount of
deductions and losses resulting in a net operating loss or net capital loss for
the year). Any deduction resulting from a net operating loss carryover, and any
net capital loss carryover used to offset a recognized capital gain, shall be
treated as a deduction or loss attributable to the Step-Up in proportion to a
fraction, the numerator of which is any portion of a deduction or loss
attributable to the Step-Up that is deemed not to have been used previously and
the denominator of which is the total amount of the deduction resulting from the
net operating loss carryover or, as the case may be, the total amount of the
capital loss carryover that is used to offset a recognized capital gain. To the
extent that G-P or its Affiliate receives (either directly or as an offset
against a liability) a payment of interest or realizes a reduction in interest
expense as a result of filing a tax return described in the first sentence of
this Section 3.16(b), G-P shall pay to WISCO an amount computed in the same
manner as such interest on the amount described in such sentence.

         (c) If CSK receives a Tax Opinion or, prior to the eighth anniversary
of the Closing Date, there is a Final Determination that the transfer of the
WISCO Business to the Company constituted a sale to the Company (in whole or in
part) for federal income tax purposes, and the WISCO Put is exercised in full
following receipt of such Tax Opinion or such Final Determination, G-P shall
continue to make payments to WISCO pursuant to Section 3.16(b) hereof until the
net income tax benefit attributable to the Step-Up is exhausted. If, however,
WISCO exercises the WISCO Put (in whole or in part) prior to CSK's receipt of a
Tax Opinion or prior to a Final Determination that the transfer of the WISCO
Business to the Company constituted a sale to the Company (in whole or in part)
for federal income tax purposes, G-P's payment obligation under Section 3.16(b)
shall not apply to any income tax deductions or losses attributable to the
Step-Up which are claimed in any taxable year (or portion thereof, determined by
pro rating the number of days in such taxable year) of G-P (or its Affiliate)
that occurs after the first such exercise of the WISCO Put.

         (d) If G-P makes a payment to WISCO under this Section 3.16 and if
WISCO and G-P jointly determine that there should have been no change in the
basis of assets or that the change was more or less than the amount they
originally determined, then (i) the amount of G-P's income tax savings
previously determined shall be redetermined to reflect the correct change (or no
change) in the basis of assets, and (ii) WISCO shall refund to G-P or G-P shall
pay to WISCO, as appropriate, the difference between the total amount previously
paid by G-P to WISCO under this Section 3.16 and the total amount

                                      -22-
<PAGE>

that should have been paid based on the redetermined tax savings. To facilitate
the application of this Section 3.16(d), each party shall promptly notify the
other of any event (of which the party becomes aware) that the party believes
likely would give rise to a redetermination under this Section 3.16(d).

         SECTION 3.17 PERMANENT COMPANY DEBT.

         The Company shall refinance the Company Debt (in accordance with
Section 3.15(b)(ii)) with new non-amortizing indebtedness that remains
outstanding for an aggregate term (taking into account the initial refinancing
and any subsequent refinancings) of 30 years from the maturity date of the
Company Debt (the "Permanent Company Debt"). The principal amount of the
Permanent Company Debt shall be equal to the Company Debt plus an amount of
expenses incurred in obtaining the Permanent Company Debt (including any
refinancings thereof) that does not exceed the difference between (i) $8,000,000
in the aggregate and (ii) the amount of any borrowing expenses that were
incurred to obtain the Company Debt and added to the principal amount thereof.
After deducting such expenses, the net proceeds of the Permanent Company Debt
shall be used solely to repay in full the principal amount of the Company Debt
(or, in the case of refinancings of Permanent Company Debt, such refinanced
Debt). In accordance with Section 3.15(b)(ii), WISCO hereby agrees to cooperate
to the extent reasonably required to facilitate the obtaining of the Permanent
Company Debt, including but not limited to, executing agreements (in form and
substance reasonably satisfactory to WISCO) necessary for it to "bear the
economic risk of loss" for such debt in an amount not less than the Special
Distribution. The Company agrees that the Permanent Company Debt shall be issued
pursuant to an indenture or credit agreement that contains covenants that are
substantially similar to those contained in the G-P Member's public bond
indenture dated March 1, 1983, from G-P to Chase Manhattan Bank National
Association, as trustee, a copy of which has been provided to the WISCO Member.
Further, the G-P Member shall fully and unconditionally guarantee all
refinancings of the Company Debt or Permanent Company Debt (such guarantee to be
in substance sufficient for G-P to bear the "economic risk of loss" for such
Debt, but for the WISCO Debt Indemnity (the "G-P Guarantee")), subject to an
indemnity from WISCO on substantially the same terms as the WISCO Debt
Indemnity.

         In addition, at all times that WISCO is subject to any continuing
liability under a WISCO debt indemnity (the "WISCO Indemnity Period"), the
Company agrees (and each of the G-P Member and WISCO Member agrees to cause the
Company) to abide by the following covenants:

         (a) Notwithstanding Section 3.13 hereof, in the event the Company or
any of its Subsidiaries sells any assets (other than sales of inventory in the
ordinary course of its business) or incurs any indebtedness in addition to the
Permanent Company Debt, the proceeds of such sales or borrowings may not be
distributed to Members, or loaned or contributed to any Person (including,
without limitation, Subsidiaries of the Company); provided, however, that the
Company or any of its Subsidiaries shall be permitted to lend such proceeds to
G-P or a Subsidiary of the Company (such loan to be evidenced by a G-P note or
Company Subsidiary note, as the case may be, that is not subordinated to G-P's
or such Company Subsidiary's, as the case may be, other senior unsecured debt).

         (b) Neither the Company nor any of its Subsidiaries shall guarantee the
debt or other obligations (the "Obligations") of any other Person (including,
without limitation, Subsidiaries of the Company) other than in the ordinary
course, consistent with the past practices of either Business, except that (i)
the Company or such Subsidiary shall be permitted to guarantee the Obligations
of G-P (including, without limitation, Obligations pursuant to G-P's senior bank
credit agreement), and (ii) the Company or such Subsidiary shall be permitted to
guarantee the Obligations of other Persons, provided that, with respect to
clause (ii) hereof, G-P has also guaranteed such Obligations on terms that
provide that the beneficiaries of such guarantees will exhaust their rights and
remedies against G-P before

                                      -23-
<PAGE>

exercising any rights or remedies against the Company or such Subsidiary, as the
case may be, pursuant to its guarantee.

         (c) In addition to the negative pledge provisions to be included in the
indenture or credit agreement for the Permanent Company Debt, neither the
Company nor any Subsidiary of the Company shall grant any liens or encumbrances
on any of its assets to secure Obligations of any other Person (including,
without limitation, Subsidiaries of the Company), except (i) the Company or such
Subsidiary of the Company shall be permitted to grant liens to secure
Obligations of G-P, and (ii) the Company or such Subsidiary of the Company shall
be permitted to grant liens on its assets to secure Obligations of other
Persons, provided that with respect to clause (ii), G-P has guaranteed such
Obligations on terms that provide that the beneficiaries of such Obligations
will exhaust their rights and remedies against G-P before exercising any rights
or remedies with respect to the pledged assets of the Company or such Subsidiary
of the Company, as the case may be.

         (d) In connection with the G-P guarantees referred to in the provisos
of clauses (b) and (c) of this section, G-P agrees to provide the WISCO Member
with the proposed form of such guarantee (which shall be the same in all
material respects as the actual guarantee entered into by G-P in connection with
the subject transaction) as soon as practicable, but in any event within five
(5) Business Days prior to G-P's execution of such guarantee.

         (e) If the WISCO Debt Indemnity has terminated in accordance with its
terms, this Section 3.17 shall have no further effect.

                                      -24-
<PAGE>

                                   ARTICLE IV
                                   MANAGEMENT

         SECTION 4.1 GENERAL.

         Subject to the delegation of rights and powers provided herein, the
Board shall have the sole right to manage the business of the Company and shall
have all powers and rights necessary, appropriate or advisable to effectuate and
carry out the purposes and business of the Company. No Member, by reason of its
status as such, shall have any authority to act for or bind the Company or
otherwise take part in the management of the Company, but shall have only the
right to vote on or approve the matters specifically provided herein or in the
Delaware Act (or hereafter specified by the Board) to be voted on or approved or
determined by the Members.

         SECTION 4.2 BOARD COMPOSITION.

         The Board shall consist of 5 Managers or such other number as the Board
shall determine. Each Member shall have the right to designate such number of
Managers (rounded up or down to the nearest whole number) as is in proportion to
its respective Percentage Interest; provided that the WISCO Member shall, so
long as it holds any Units in the Company, be entitled to appoint at least one
Manager to the Board. Each of CSK and G-P shall provide notice of its initial
designations of Managers in writing to the other on or prior to the Closing
Date. Each Manager shall hold office until such Manager's resignation, removal,
death or incapacity; provided, however, that if the number of Managers that a
Member is entitled to designate is reduced by reason of a change in Unit
ownership, the one or more affected Managers appointed by such Member shall
automatically cease to be Managers (if more than one, in the reverse order of
the date of their respective appointments).

         SECTION 4.3 TERM; REMOVAL; VACANCIES.

         Managers shall hold office at the pleasure of the Member that
designated them. Any Member may at any time, by written notice to the other
Members and the Company, remove (with or without cause) any Manager designated
by such Member. Subject to applicable Law and to the provisions of Section 4.2,
a Manager may not be removed except by written request of the Member that
designated the Manager. In the event a vacancy occurs on the Board for any
reason, the vacancy will be filled by the written designation of the Member that
designated the Manager creating the vacancy.

         SECTION 4.4 NOTICE; QUORUM.

         Meetings of the Board may be called by any Manager on two Business
Days' prior written notice to all Managers stating in general the purpose or
purposes thereof; provided, however, that any Manager may waive such notice
prior to, at or after the meeting. The presence in person of a majority of the
Managers shall constitute a quorum for the transaction of business at any
meeting of the Board. Each Member shall use its reasonable efforts to ensure
that a quorum is present at any duly convened meeting of the Board and each
Member may designate by written notice to the others an alternate to act in the
absence of any of its previously designated Managers at any such meeting. If at
any meeting of the Board a quorum is not present, a majority of the Managers
present may, without further notice, adjourn the meeting from time to time until
a quorum is obtained.

                                      -25-
<PAGE>

         SECTION 4.5 VOTING.

         (a) Each Manager shall be entitled to cast one vote on each matter
considered by the Board. Except as otherwise expressly provided by this
Agreement, the act of a majority of the Managers present at any meeting at which
a quorum is present shall constitute an act of the Board.

         (b) The following matters shall require, in addition to any other vote
required by applicable Law or as otherwise provided for herein, the affirmative
vote of a majority of the Board in attendance, which majority must include a
Manager designated by the WISCO Member:

               (i) except as provided in Article VIII hereof, and subject to
applicable Law, any dissolution or liquidation of the Company;

               (ii) any merger, consolidation, conversion or other
reorganization involving the Company, or the sale or other disposition of all or
substantially all of the assets of the Company in one transaction or a series of
related transactions;

               (iii) the admission of an additional Member except as provided in
Section 7.1; and

               (iv) any amendment to or waiver or termination of, any Ancillary
Agreement, which amendment or waiver or termination would have the effect of
adversely altering the methodology for establishing the price of goods or the
cost allocation of services provided to the Company in the Ancillary Agreements
(other than the Parent Roll Supply Agreement) or adversely amend or waive
Section 4.1 of the Parent Roll Supply Agreement or terminate the Parent Roll
Supply Agreement.

         (c) Any Manager, when making any determination in such capacity,
including voting or acting by consent with respect to any matter, shall be
entitled to act in his or her discretion, considering only such interests and
factors as such Manager desires, and such Manager shall have no duty or
obligation to give any consideration to any interest of, or other factors
affecting, the Company or any Member. Further, a Manager may consider and act in
accordance with the interests of the Member appointing him or her, without
regard to the other interests or factors, including any fiduciary duties, when
acting on any matter presented to the Board for determination, and to the extent
permitted by the Delaware Limited Liability Company Act, the Members hereby
eliminate and waive any and all fiduciary duties and liabilities of the Manager
and their Affiliates to the Company and any other Members.

         SECTION 4.6 TELEPHONIC MEETING; WRITTEN CONSENTS.

         (a) Any meeting of the Board may be held by conference telephone or
similar communication equipment so long as all Managers participating in the
meeting can hear one another. All Managers participating by telephone or similar
communication equipment shall be deemed to be present in person at the meeting.

         (b) Any action to be taken by the Managers at a meeting of the Board
may be taken without such meeting by the written consent of a majority of the
Managers then in office (or such higher number of Managers as is required take
such action under the terms of this Agreement or applicable Law). Any such
written consent may be executed and given by telecopy or similar electronic
means and shall be filed with the minutes of the proceedings of the Board. If
any action is so taken by the Board by the written consent of less than all of
the Managers, prior notice of the taking of such action shall be furnished to
each Manager, which notice shall include a copy of the proposed consent, as well
as any

                                      -26-
<PAGE>

other information provided by the Company to any Manager with such consent
(provided that the effectiveness of such action shall not be impaired by any
delay or failure to furnish such notice).

         SECTION 4.7 COMMITTEES OF THE BOARD; OFFICERS.

         (a) The Managers may, by resolution (which resolution shall have been
approved by the WISCO Manager), delegate any of the Board's powers to one or
more committees of the Board, each consisting of one or more Managers (other
than the power to take the actions specified in Section 4.5(b)). The Board, by
resolution, may adopt further procedures relating to the conduct of business by
any of the committees established by it.

         (b) The Company shall have such officers as shall be appointed by the
Board, each having such powers and duties as shall be provided by resolution of
the Board. In addition, the Board may appoint, employ or otherwise cause the
Company to contract with such other Persons for the transaction of the business
of the Company or the performance of services for or on behalf of the Company as
it shall determine in its discretion from time to time. The Board may delegate
to any officer of the Company or to any such other Person such authority to act
on behalf of the Company as the Board may from time to time determine
appropriate in its discretion. The salaries or other compensation, if any, of
the officers and agents of the Company shall be fixed from time to time by the
Board. The Managers shall not be responsible for any misconduct or negligence on
the part of any officer, agent or other Person to whom authority is delegated,
provided that such Person was appointed by the Managers with reasonable care.

         SECTION 4.8 EXECUTION OF DOCUMENTS.

         No Manager (acting solely in his capacity as such) shall have any
authority to bind the Company to any third party with respect to any action
except pursuant to a resolution authorizing such action. Any Manager or officer
of the Company, or any other persons specifically authorized by the Board, may
execute any contract or other agreement or document on behalf of the Company and
may execute on behalf of the Company and file with the Secretary of State of the
State of Delaware any certificates or filings provided for in the Delaware Act.
The filing of the Certificate of Formation with the Secretary of State of the
State of Delaware by the authorized person therein specified is hereby ratified
and confirmed.

                                      -27-
<PAGE>

         SECTION 4.9 RELIANCE ON DOCUMENTS AND REPORTS.

         A Manager shall be fully protected in relying in good faith upon the
records of the Company and upon such information, opinions, reports or
statements presented to the Company by any of its other Managers, Members,
officers, employees or committees, or by any other Person, as to matters the
Manager reasonably believes are within such other Person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Company (including, without limitation, information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits, or
losses of the Company or any other facts pertinent to the existence and amount
of assets from which distributions to Members might properly be paid). In
addition, the Managers may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers and other consultants and advisors
selected by them, and reliance upon any opinion of any such Person as to matters
which the Managers reasonably believe to be within such Person's professional or
expert competence shall be full and complete protection in respect of any action
taken or suffered or omitted by the Managers hereunder in good faith and in
accordance with such opinion.

         SECTION 4.10 STANDARD OF CARE; INDEMNIFICATION.

         Subject to Section 4.5(c), in carrying out his duties, a Manager or
officer of the Company shall not be liable to the Company or to any Member for
any actions taken in good faith and reasonably believed by the Manager or
officer to be in, or not opposed to, the best interests of the Company Group, or
for errors of judgment, neglect or omission, including any losses sustained,
liabilities incurred, or benefits not derived by Members in connection with any
action or inaction of the Manager, provided, however, that a Manager or officer
shall be liable for his willful misconduct or gross negligence.

         (a) Each Manager shall, and each officer at the discretion of the Board
may (as so indemnified, an "Indemnitee") be indemnified and held harmless by the
Company from and against any and all losses, claims, damages, liabilities,
expenses (including legal fees and disbursements), judgments, fines, settlements
and all other amounts arising from any and all claims, demands, actions, suits
or proceedings, civil, criminal, administrative or investigative, in which the
Indemnitee may be involved, or threatened to be involved, as a party or
otherwise by reason of his status as a Manager or officer, or his management of
the affairs of the Company, or which relate to the Company, its property,
business or affairs, whether or not the Indemnitee continues to be a Manager or
officer at the time any such liability or expense is paid or incurred, if the
Indemnitee (i) acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Company Group and, (ii) with
respect to any criminal proceeding, had no reasonable cause to believe his
conduct to be unlawful; provided however, that no Indemnitee shall be entitled
to indemnification if it shall be finally determined that such Indemnitee's act
or omission constituted willful misconduct or gross negligence.

         (b) Expenses (including legal fees and disbursements) incurred in
defending any proceeding shall be paid by the Company in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
the Indemnitee to repay such amount if it is ultimately determined by a court of
competent jurisdiction that the Indemnitee is not entitled to be indemnified by
the Company as authorized hereunder.

         SECTION 4.11 MEMBER ACTION.

                                      -28-
<PAGE>

         In the event that any matter is required to be submitted to the Members
for their approval under the terms of this Agreement or the Delaware Act, the
following provisions shall apply:

         (a) The Members may vote on any such matter at a meeting to be held at
such time and place as shall be designated by the Board. Any meeting of the
Members may be held by conference telephone or similar communication equipment
so long as all Members participating in the meeting can hear one another. All
Members participating by telephone or similar communication equipment shall be
deemed to be present in person at the meeting. Members shall be given at least
three Business Days' prior notice of any meeting; provided that any Member may
waive such notice prior to, at or after the meeting. The notice shall specify
the place, date and hour of the meeting and the general nature of the business
to be transacted. Every Member entitled to vote or act on any matter at a
meeting of Members shall have the right to do so either in person or by proxy.

         (b) Each Member shall be entitled to one vote for each Unit owned by
it. At any meeting of Members, the presence in person or by proxy of Members
having the right to vote more than 50% of the Units entitled to vote at such
meeting shall constitute a quorum for the transaction of business. Except as
otherwise required by this Agreement or applicable Law, the affirmative vote of
Members having the right to cast more than 50% of the votes present at a meeting
of Members at which a quorum is present is required to approve any action
requiring the Members' approval at such meeting.

         (c) Any action that may be taken at any meeting of Members may be taken
without a meeting and without prior notice if a consent in writing setting forth
the action so taken is signed by all Members. Any such written consent may be
executed and given by telecopy or similar electronic means and such consents
shall be filed with the minutes of the proceedings of the Members.

         SECTION 4.12 CERTAIN TRANSACTIONS.

         (a) Without requirement of further consent or action of the Members or
Managers of the Company, the Company is authorized to enter into the Joint
Venture Agreement and each of the Ancillary Agreements and all other documents
and agreements to be delivered by the Company at the Closing pursuant to the
Joint Venture Agreement, to perform the Company's obligations thereunder, and to
consummate the transactions contemplated thereby, all of which actions are
approved, ratified and confirmed by the Members. Without limiting the foregoing,
it is understood and agreed that, pursuant to the Management Agreement (as
defined in the Joint Venture Agreement) G-P shall, subject to the authority of
the Board, be responsible for the management and operations of the Company.

         (b) Notwithstanding anything herein to the contrary, prior to agreeing
to terminate any Ancillary Agreement (other than the Parent Roll Supply
Agreement, which may not be terminated at any time that WISCO is a Member of the
Company without the WISCO Manager's consent thereto), the Board must make a good
faith determination that it no longer requires the services provided by G-P in
such Ancillary Agreement.

                                    ARTICLE V
                          ACCOUNTING, BOOKS AND RECORDS

         SECTION 5.1 FISCAL YEAR.

                                      -29-
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         The fiscal year and fiscal periods of the Company shall be the same as
the fiscal year and fiscal periods of G-P, as the same may be changed or
modified from time to time. The G-P Member shall give the WISCO Member prompt
notice of any material change in the fiscal year or fiscal periods of G-P.

         SECTION 5.2 BOOKS AND RECORDS.

         The Company shall keep at its principal executive offices books and
records typically maintained by Persons engaged in similar businesses and which
shall set forth a true, and complete account of the Company Business and affairs
of the Company Group in all material respects. Such books and records shall be
kept in accordance with GAAP in a manner reasonably designed to provide such
information as well as permit preparation by Members of their Federal and State
tax returns and to calculate EBITDA of the Company. Each of the Members and
their respective authorized representatives (and with respect to the G-P Books
the WISCO Member) shall have the right, at all reasonable times and upon
reasonable advance written notice to the Company, at such Member's expense, to
inspect, audit and copy the books and records of the Company Group (and with
respect to the G-P Books the WISCO Member) for any purpose reasonably related to
the Member's interests as a Member of the Company. A Member requesting any such
access to books and records shall reimburse the Company or G-P, as the case may
be, for any costs reasonably incurred by it in connection therewith.

         SECTION 5.3 AUDITORS.

         The CPA Firm of the Company shall be the same firm used by G-P, as such
CPA Firm may be changed from time to time so long as it is an auditing firm of
national standing.

         SECTION 5.4 REPORTING.

         The Company shall use reasonable commercial efforts to deliver to each
Member (i) prior to each fiscal quarter, a quarterly forecast of the results of
operations of the Company Group for such quarter, and, as soon as practicable,
any material changes to such forecast; (ii) within 15 days after the close of
each fiscal quarter, estimated financial statements for the Company Group; (iii)
within 30 days after the close of each fiscal quarter, an Unaudited Balance
Sheet, Statement of Income and Statement of Cash Flows for the Company Group,
together with the notes related thereto; and (iv) within 60 days after the close
of each Fiscal Year, an Audited Balance Sheet, Statement of Income and Statement
of Cash Flows for the Company Group for such Fiscal Year, together with the
notes related thereto. The Members acknowledge and agree that the Members shall
have no recourse against the Company or each other in the event the forecast is
incorrect and that no Member shall be entitled to rely on such forecast for any
purpose.

         SECTION 5.5 BANKING.

         All funds of the Company received from any and all sources shall be
deposited in the Company's name in such separate checking or other such accounts
as shall be determined by the Board. In connection with the maintenance of such
bank accounts, the Board shall designate those individuals who will have
authority to write checks or otherwise disburse funds from such bank accounts on
behalf of the Company in connection with its activities. Nothing contained
herein shall be construed to limit the ability of the Company to obtain and
utilize cash management services pursuant to the Management Agreement, as
defined in the Joint Venture Agreement.

         SECTION 5.6 TAX RETURN INFORMATION.

                                      -30-
<PAGE>

         The Company shall prepare all federal, foreign, state and local income
tax returns that the Company is required to file. Within 120 days following the
close of each Fiscal Year, the Company shall send or deliver to each Person that
was a Member at any time during such year such tax information as shall
reasonably be required for the preparation by such Person of its federal,
foreign, state and local income and other income tax returns.

         SECTION 5.7 DELEGATION OF RESPONSIBILITY FOR ACCOUNTING AND REPORTS.

         Subject to the provisions of Section 5.3, the Board may cause the
Company to contract with any other Person for the provision of any of the
accounting, cash management and tax services required under Article III or this
Article V and may pay reasonable compensation for such services.

                                   ARTICLE VI
                                 CONFIDENTIALITY

         SECTION 6.1 CONFIDENTIALITY OBLIGATION.

         The WISCO Member (and, in the case of Section 6.1(c) below, the
Company) shall use (and shall ensure that each of its Affiliates shall use) all
reasonable efforts to keep confidential (and to ensure that its officers,
employees, agents and professional and other advisers keep confidential) the
following ("Confidential Information"):

         (a) all technical information, formulae, designs, specifications,
drawings, data, manuals, instructions and other know-how relating to the
products and technical processes of the Company Group, the Company Business or
the business of any other Member;

         (b) any information which the WISCO Member may have or acquire before
or after the date of this Agreement with respect to the customers, business,
assets or affairs of any G-P Group Affiliate, or any Company Group Affiliate,
resulting from:

               (i) negotiating this Agreement, the Joint Venture Agreement or
any other agreement referred to in or entered into pursuant to this Agreement or
the Joint Venture Agreement;

               (ii) being a Member in the Company;

               (iii) appointing Managers to the Board and their exercise of
their duties; or

               (iv) exercising its rights or performing its obligations under
this Agreement;

         (c) any information which the Company may have or acquire before or
after the date of this Agreement in relation to the customers, business, assets
or affairs of any G-P Group Affiliate or any CSK Group Affiliate resulting from
the exercise of its rights or performance of its obligations under this
Agreement, the Joint Venture Agreement or any other agreement referred to in or
entered into pursuant to this Agreement or the Joint Venture Agreement; or

         (d) any information which such Member may have or acquire before or
after the date of this Agreement with respect to the customers, business, assets
or affairs of the Company Business.

         The WISCO Member (and, in the case of Section 6.1(c), the Company)
shall not (and shall cause its Affiliates not to) disclose to any third party
any Confidential Information without the consent of the

                                      -31-
<PAGE>

G-P Member. In performing its obligations under this Article VI, the WISCO
Member and the Company shall (and shall cause its Affiliates to) apply no lesser
confidentiality standards and procedures than it applies generally in relation
to its own confidential information. Notwithstanding anything herein to the
contrary, for purposes of this Agreement, the term Confidential Information
shall not include information of the type described in Sections 6.2(b) and
6.2(g).

         SECTION 6.2 EXCEPTIONS FROM CONFIDENTIALITY OBLIGATION.

         The obligation not to disclose Confidential Information to any third
party under this Article VI does not apply to:

         (a) the disclosure (subject to Section 6.3) on a 'need to know' basis
to a company which is another CSK Group Member where the disclosure is for a
purpose reasonably incidental to this Agreement; including, without limitation,
as necessary for the performance of its obligations under any Ancillary
Agreement, in which case such company shall be subject to the confidentiality
obligations of Article VI in this Agreement;

         (b) information which is independently developed by the WISCO Member or
acquired from a third party to the extent that it is acquired with the right to
disclose the same after the date hereof;

         (c) the disclosure of information to the extent required to be
disclosed by law, any stock exchange regulation or any binding judgment, order
or requirement of any court or other competent authority (subject to the
obligation to consult with the G-P Member in advance and to take account of its
reasonable requirements);

         (d) disclosure of information to lenders and rating agencies;

         (e) the disclosure of information to any tax authority to the extent
reasonably required for the purposes of the tax affairs of the WISCO Member
concerned or any Member of its Group;

         (f) the disclosure (subject to Section 6.3) in confidence to the WISCO
Member's professional advisers of information reasonably required to be
disclosed for a purpose reasonably incidental to this Agreement; or

         (g) information which becomes within the public domain (otherwise than
as a result of a breach of Article VI).

         SECTION 6.3 EMPLOYEES, AGENTS AND ADVISERS.

         The WISCO Member shall inform (and shall ensure that each of its
Subsidiaries or Affiliates shall inform) any officer, employee or agent or any
professional or other adviser advising it in relation to the matters referred to
in this Agreement, or any other Person to whom it provides Confidential
Information, that such information is confidential and shall instruct them (i)
to keep it confidential and (ii) not to disclose it to any third party (other
than those persons to whom it has already been disclosed in accordance with the
terms of this Agreement). The disclosing Member is responsible for any breach of
this Article VI by the person to whom the Confidential Information is disclosed.

         SECTION 6.4 RETURN OF CONFIDENTIAL INFORMATION.

                                      -32-
<PAGE>

         If the Company dissolves and terminates, either the WISCO Member or the
G-P Member may by notice to any other Member require the other Member to destroy
or return the first Member's (but not the Company's) Confidential Information.
In addition, if at any time either the WISCO Member or the G-P Member shall
cease directly or indirectly to be a Member, the other Member may, by notice to
the first Member, require the first Member to destroy or return the other
Member's Confidential Information. If so, the first Member shall (and shall
ensure that its Affiliates and its officers and employees shall):

         (a) destroy or return all documents containing Confidential Information
which have been provided by or on behalf of the Member demanding the return of
Confidential Information; and

         (b) destroy or return any copies of such documents and any document or
other record (including in electronic form) reproducing, containing or made from
or with reference to the Confidential Information

(except, in each case, for a record of any submission to or filings with
governmental, tax or regulatory authorities or papers required for a Member's
board or other corporate records or documents required in connection with
litigation). The first Member shall return or destroy the Confidential
Information as soon as practicable after receiving notice and, in the case of
destruction, shall provide a certificate of an officer of that Member confirming
that destruction.

         (c) The provisions of Section 6.4(a) shall not apply in the event of a
dissolution and termination in which the Board has expressed its rights under
Section 8.3(a) hereof.

         SECTION 6.5 SURVIVAL AFTER TERMINATION.

         The provisions of this Section 6.5 shall survive the dissolution and
termination of the Company and any Transfer of a Member's Units. If either the
WISCO Member or the G-P Member shall cease to be a Member following a Transfer
of Units pursuant to this Agreement, then:

         (a) the term Confidential Information for the purposes of this Article
VI shall extend to and include all Confidential Information held by CSK Group
Members or G-P Group Members (as the case may be) about the other (excluding the
Company) and the confidentiality obligations set out in Section 6.1 shall
(subject to Section 6.2) thereafter apply to each CSK Group Member ceasing to be
a Member (as the case may be) as if it were a Member; and

         (b) the provisions of Section 6.4 relating to return or destruction of
Confidential Information shall similarly apply to such extended application of
the term Confidential Information, pursuant to Section 6.5(a), as if it were
Confidential Information of the remaining Member.

                                   ARTICLE VII
                     TRANSFER OF UNITS; PUT AND CALL RIGHTS

         SECTION 7.1 GENERAL.

         Except as permitted by Section 7.2, or with the prior written consent
of all other Members, no Member will directly or indirectly (i) sell, assign,
pledge, encumber, hypothecate, dispose of or otherwise transfer (collectively,
"Transfer") any Units, or any interest in any Units, (ii) agree to any such
Transfer or (iii) permit or suffer any such interest to be subject to Transfer,
directly or indirectly, by

                                      -33-
<PAGE>

merger or other operation of law, agreement or otherwise. Any purported Transfer
in any manner not permitted by this Article VII shall be null and void and shall
not be recognized or given effect by the Company or any Member; provided,
however, that a change of control of CSK or G-P shall not be deemed to be a
Transfer.

         SECTION 7.2 PUT AND CALL RIGHTS.

         (a) At any time on or after the third anniversary of the Closing Date,
the WISCO Member shall have a right to sell to G-P, or to obligate the Company
to redeem, in WISCO's sole discretion, all or any portion of the WISCO Member's
Units (the "WISCO Put") at a purchase or redemption price, as the case may be,
equal to the Formula Price multiplied by a fraction, the numerator of which
shall be the number of Units being sold or redeemed and the denominator of which
shall be the total number of Units of the Company then outstanding (the "Put
Price"); provided, however, that WISCO shall not have the right to exercise the
WISCO Put on more than (3) three occasions.

         (b) At any time commencing after the tenth anniversary of the Closing,
G-P shall have the right to purchase, and the WISCO Member shall be obligated to
sell, all but not less than all of the Units owned by the WISCO Member (the "G-P
Call") at a purchase price equal to the Formula Price multiplied by a fraction,
the numerator of which shall be the number of Units then owned by the WISCO
Member and the denominator of which shall be the total number of Units of the
Company then outstanding (the "Call Price").

         (c) In the event the WISCO Put or the G-P Call (either being referred
to as "Option Right") is exercised, the following procedure shall be applicable:

               (i) The Member exercising its Option Right shall deliver a
written notice to the other Member and the Company (the "Exercise Notice").

               (ii) The Exercise Notice shall: (a) specify the identity of each
Member electing to exercise an Option Right; (b) specify the number of Units to
be sold, purchased or redeemed pursuant to such Exercise Notice; and (c) be
executed by a duly authorized officer of such Member.

               (iii) In the event of exercise of a WISCO Put, the G-P Member or
the Company, as specified in any Exercise Notice regarding such WISCO Put, shall
purchase and the WISCO Member shall sell the Units specified in the Exercise
Notice. In the event of exercise of the G-P Call, the WISCO Member shall sell
and the G-P Member shall purchase all Units owned by the WISCO Member.

               (iv) The closing of a Transfer pursuant to exercise of an Option
Right (an "Option Closing") shall take place at a time and place to be
designated by mutual agreement between the Members; provided, however, that the
date designated for the Option Closing shall not be more than ten (10) Business
Days from the date of receipt by the Company of the Exercise Notice. At the
Option Closing, the WISCO Member shall deliver to the Company certificates
representing the Units subject to the Exercise Notice (free and clear of all
liens, charges and encumbrances) and the Company or the G-P Member, as
applicable, shall pay to the WISCO Member the Put Price or the Call Price, as
applicable, by cashier's or certified check payable to any such WISCO Member, or
by wire transfer of immediately available funds to an account designated by such
WISCO Member.

               (v) At the Option Closing, the WISCO Member shall execute and
deliver such documents as reasonably requested by the G-P Member to fully
transfer title to the Units subject to

                                      -34-
<PAGE>

such Exercise Notice, including documents representing and warranting good and
marketable title to such Units and that such Units are owned free and clear of
all liens, charges and encumbrances.

         SECTION 7.3 MEMBER TRANSFERS.

         (a) Upon not less than fifteen (15) days advance written notice to the
Company and effective as of the first day of the next calendar month, any Member
may Transfer any of the Units held by it to any of its Affiliates and such
transferee shall become a Member hereunder (an "Affiliate Member"), provided
that (i) such transferee shall execute a counterpart of this Agreement, agreeing
thereby to be bound by all of the provisions hereof and (ii) in the event that
such transferee would at any time thereafter cease to be an Affiliate of the CSK
Group or the G-P Group, as the case may be, then the Units so transferred to
such former Affiliate shall be Transferred back to CSK or G-P, or an Affiliate
of their respective Groups, as applicable, prior to such CSK Group Affiliate or
G-P Group Affiliate ceasing to be such (and if such transfer back does not occur
prior to the Affiliate ceasing to be such, the transaction which results in the
transferee ceasing to be an Affiliate shall be deemed a Transfer which is
subject to the restrictions of this Section 7.3).

         (b) Notwithstanding anything herein to the contrary, G-P or an
Affiliate Member of G-P may transfer its Units or interests in its Units to any
third party at any time after the tenth anniversary of the date hereof, provided
that such transferee shall execute a counterpart of this Agreement, agreeing
thereby to be bound by all of the provisions hereof.

         SECTION 7.4 RETIREMENT.

         Any Member that Transfers all of its Units pursuant to the terms hereof
shall be deemed to have retired and to have ceased to be a Member as of the
effective date of such Transfer.

                                  ARTICLE VIII
                   DISSOLUTION AND WINDING UP; BUY OUT RIGHTS

         SECTION 8.1 DISSOLUTION.

         Subject to Section 8.5 hereof, the Company may, at the sole discretion
of the Board, be dissolved and its affairs wound up and terminated upon the
first to occur of the following:

         (a) the unanimous consent of all Members to dissolve the Company, it
being expressly understood that Section 18-801(a)(3) of the Delaware Act shall
not apply to the Company;

         (b) the sale or other disposition of all or substantially all of the
assets of the Company in one transaction or a series of related transactions;

         (c) the date the WISCO Member or the CSK Group holds less than 5% of
the outstanding Units; and

         (d) the occurrence of an event causing a dissolution of the Company
under Section 18-801 of the Delaware Act, unless the Company is continued as
permitted under the Delaware Act.

                                      -35-
<PAGE>

         SECTION 8.2 WINDING UP.

         If the Company is dissolved pursuant to Section 8.1, this Agreement
shall remain in full force and effect and shall continue to govern the rights
and obligations of the Members and Managers and the conduct of the Company
during the period of winding up the Company's affairs. The Board shall apply and
distribute the assets of the Company in the following order of priority (subject
to Section 8.3), unless otherwise required by mandatory provisions of applicable
law:

         (a) to satisfy the Company Debt or the Permanent Company Debt;

         (b) to other creditors, including Members who are creditors, to the
extent otherwise permitted by law, in satisfaction of the liabilities of the
Company (whether by payment, by the establishment of reserves of cash or other
assets of the Company for contingent liabilities in amounts, if any, determined
by the Board to be appropriate for such purposes or by other reasonable
provision for payment), other than liabilities for distributions to Members and
former Members under Sections 18-601 or 18-604 of the Delaware Act;

         (c) to Members and former Members in satisfaction of liabilities for
distributions under 18-601 or 18-604 of the Delaware Act; and

         (d) thereafter to the Members in proportion to the positive balances of
their respective Capital Accounts (determined after allocating all income, gain,
deduction, loss and other like items arising in connection with the liquidation
of Company assets and otherwise making all Capital Account adjustments required
under the definition of Capital Account);

         SECTION 8.3 IN-KIND DISTRIBUTIONS.

         In the event of a dissolution or winding up of the Company, the Board
shall, to the extent permitted by law, (a) distribute to the G-P Member the
amount required by Section 8.2 in kind, from the Company's assets, and to the
WISCO Member the amount required by Section 8.2 in cash, or (b) if the Board
determines (which determination must include the affirmative vote or consent of
the WISCO Manager) that a prompt sale of part or all of the Company's assets
would be impractical or would cause undue loss to the value of Company assets,
the Board may defer for a reasonable time (up to three (3) years) the
liquidation of any assets, except those necessary to timely satisfy liabilities
of the Company (other than those to Members), and/or may distribute to the
Members, in lieu of cash, as tenants in common, undivided interests in such
Company assets as the Board deems not suitable for liquidation. Any such in-kind
distributions shall be made in accordance with the priorities set forth in
Section 8.2 as if cash equal to the Fair Market Value of the distributed assets
were being distributed. Any such distributions in kind shall be subject to such
conditions relating to the disposition and management of such properties as are
reasonable and equitable and to any joint operating agreements or other
agreements governing the operation of such properties at such time. The
liquidating distributions to be made pursuant to this section shall be made
within the time set forth in Regulations Section 1.704-1(b)(2)(ii)(b)(2).

         SECTION 8.4 CANCELLATION OF CERTIFICATE OF FORMATION.

         Upon the completion of the distribution of Company Property as provided
in Sections 8.2 and 8.3, the Company shall be terminated, and the Board shall
cause the cancellation of the Certificate of Formation and all qualifications of
the Company as a foreign limited liability company and shall take such other
actions as may be necessary to terminate the Company.

                                      -36-
<PAGE>

         SECTION 8.5 BUY OUT RIGHTS.

         In the event of the occurrence of any of the events described in
Section 8.1, G-P shall have the option to either (a) cause the dissolution and
wind up the Company pursuant to this Article VIII; or (b) cause a Subsidiary of
G-P to purchase the Units held by the WISCO Member at a purchase price
calculated by multiplying the Formula Price times the WISCO Member's Percentage
Interest, in which case the Company shall not be dissolved; or (c) to the extent
legally permissible, take no action and continue the existence of the Company.
Such option shall be exercised, and notice of such exercise provided to the
WISCO Member, within 120 days after the occurrence of any of such events
described in Section 8.1.

                                   ARTICLE IX
                          CERTIFICATES EVIDENCING UNITS

         SECTION 9.1 CERTIFICATES.

         The Units owned by each Member shall be evidenced by one or more
Certificates. Each Certificate shall be executed by such Managers or such
officers of the Company as the Board shall designate.

         SECTION 9.2 REGISTER.

         The Company shall keep or cause to be kept a register in which, subject
to such regulations as the Board may adopt, the Company will provide for the
registration of Units and the registration of Transfers of Units. Upon surrender
for registration of Transfer of any Certificate, and subject to the further
provisions of this Section 9.2 and Section 9.3 and the limitations on Transfer
contained elsewhere in this Agreement, the Company will cause the execution, in
the name of the registered holder or the designated transferee, of one or more
new Certificates, evidencing the same aggregate number of Units as did the
Certificate surrendered or such other number as is appropriate in the event such
Transfer is pursuant to exercise of an Option Right. Every Certificate
surrendered for registration of Transfer shall be duly endorsed, or be
accompanied by a written instrument of Transfer in form satisfactory to the
Board, duly executed by the registered holder thereof or such holder's
authorized attorney.

         SECTION 9.3 NEW CERTIFICATES.

         The Company shall issue a new Certificate in place of any Certificate
previously issued if the record holder of the Certificate (i) makes proof by
affidavit, in form and substance satisfactory to the Board, that a previously
issued Certificate has been lost, destroyed or stolen, (ii) requests the
issuance of a new Certificate before the Company has received notice that the
Certificate has been acquired by a purchaser for value in good faith and without
notice of an adverse claim, (iii) if requested by the Board, delivers to the
Company a bond, in form and substance satisfactory to the Board, with such
surety or sureties and with fixed or open liability as the Board may direct, to
indemnify the Company, as registrar, against any claim that may be made on
account of the alleged loss, destruction or theft of the Certificate, and (iv)
satisfies any other reasonable requirements imposed by the Board.

         SECTION 9.4       INTEREST AS A SECURITY.

                  A Unit in the Company evidenced by a Certificate shall
constitute a security for all purposes of Article 8 of the Uniform Commercial
Code promulgated by the National Conference of

                                      -37-
<PAGE>

Commissioners on Uniform State Laws, as in effect in Delaware or any other
applicable jurisdiction. Delaware law shall constitute the local law of the
Company's jurisdiction in its capacity as the issuer of Units.

         SECTION 9.5 LEGENDS.

         A copy of this Agreement shall be kept with the records of the Company.
Each of the Members hereby agrees that each outstanding Certificate shall bear a
conspicuous legend reading substantially as follows:

                  The Units represented by this Certificate have not been
                  registered under the Securities Act of 1933 or applicable
                  state and other securities laws and may not be sold, pledged,
                  hypothecated, encumbered, disposed of or otherwise transferred
                  without compliance with the Securities Act of 1933 or any
                  exemption thereunder and applicable state and other securities
                  laws. The Units represented by this Certificate are subject to
                  the restrictions on transfer and other provisions of an
                  Operating Agreement dated as of October 4, 1999 (as amended
                  from time to time, the "Agreement") by and among Company and
                  its Members, and may not be sold, pledged, hypothecated,
                  encumbered, disposed of or otherwise transferred except in
                  accordance therewith. A copy of the Agreement is on file at
                  the principal executive offices of the Company.

                                    ARTICLE X
                                  MISCELLANEOUS

         SECTION 10.1 NOTICES.

         All notices and other communications required or permitted by this
Agreement shall be in writing and shall be delivered by personal delivery, by
nationally recognized overnight courier service, by facsimile, by first class
mail or by certified or registered mail, return receipt requested, addressed, to
any Member at its address as set forth on Schedule 1 (as the same may be updated
from time to time at the direction of such Member) or to the Company at 55 Park
Place, Atlanta, Georgia 30303 (or to such other address as the Company shall
have designated to each of the Members by written notice given in the manner
hereinabove set forth). Notices shall be deemed given one day after sent, if
sent by overnight courier; when delivered and receipted for, if hand delivered;
when received, if sent by facsimile or other electronic means or by first class
mail; or when receipted for (or upon the date of attempted delivery where
delivery is refused or unclaimed), if sent by certified or registered mail,
return receipt requested.

         SECTION 10.2 AMENDMENT; WAIVER.

         Any provision of this Agreement may, (i) in the case of an amendment,
be amended if, and only if, such amendment is in writing and signed by each
Member, or (ii) in the case of a waiver, be waived if such waiver is contained
in a writing, and signed by the party against whom the waiver is to be
effective. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single
exercise thereof preclude any other or further exercise thereof or of any other
right, power or privilege. Except as otherwise provided rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

                                      -38-
<PAGE>

         SECTION 10.3 ASSIGNMENT.

         Except as otherwise expressly provided herein, no party to this
Agreement may assign any of its rights or obligations under this Agreement
without the prior written consent of the other parties hereto.

         SECTION 10.4 ENTIRE AGREEMENT.

         This Agreement, the Joint Venture Agreement and the Ancillary
Agreements (including the schedules and exhibits hereto and thereto) contain the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters.

         SECTION 10.5 PUBLIC DISCLOSURE.

         Each Member hereby agrees that, except as may be required to comply
with the requirements of any applicable Laws or the rules and regulations of any
exchange upon which its securities (or the securities of one of its Affiliates)
are traded, it shall not make or permit to be made any press release or similar
public announcement or communication concerning the execution or performance of
this Agreement unless specifically approved in advance by all parties hereto,
which approval shall not be unreasonably withheld, conditioned or delayed. In
the event that, in the absence of such approval, legal counsel for any party is
of the opinion that a press release or similar public announcement or
communication is required by Law or by the rules and regulations of any exchange
on which such party's securities (or the securities of one of its Affiliates)
are traded, then such party may issue a public announcement limited solely to
that which legal counsel for such party advises is required under such Law or
such rules and regulations (and the party making any such announcement shall
provide a copy thereof to the other parties for review before issuing such
announcement).

         SECTION 10.6 PARTIES IN INTEREST.

         This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Nothing in
this Agreement, express or implied, is intended to confer upon any Person other
than the Company, WISCO, G-P or their respective successors or permitted
assigns, any rights or remedies under or by reason of this Agreement. The
Company is executing this Agreement as a party, and this Agreement shall
constitute a contract among the Members and between the Company and each of the
Members.

         SECTION 10.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF
FORUM.

         This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of Delaware without giving effect to any
choice of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the Laws of any jurisdiction
other than the internal Laws of the State of Delaware. Each of the Parties
agrees that any legal action between the parties, or any of them, relating to
this Agreement, the interpretation of the terms hereof or the performance hereof
or the consummation of the transactions contemplated hereby, whether in tort or
contract or at law or in equity, shall exclusively be brought in a Federal or
State Court located in New Castle County, Delaware, having jurisdiction of the
subject matter thereof, and each party irrevocably (i) consents to personal
jurisdiction in any such Federal or State Court, (ii) waives any objection to
laying venue in any such action or proceeding in any such Court, (iii) waives
any immunity from suit and any objection that any such Court is an inconvenient
forum or does not have jurisdiction

                                      -39-
<PAGE>

over any party hereto and (iv) agrees that service of complaint or other process
may be made by certified or registered mail addressed to such party at its
address determined in accordance with Section 10.1 of this Agreement.

         SECTION 10.8 COUNTERPARTS.

         This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.

         SECTION 10.9 SEVERABILITY.

         The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable (i) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (ii) the remainder of this Agreement and the application of such provision
to other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.

         SECTION 10.10 EQUITABLE RELIEF.

         Each party acknowledges that money damages would be inadequate to
protect against any actual or threatened breach of this Agreement by any party
and that each party shall be entitled to equitable relief, including specific
performance and/or injunction, without posting bond or other security, in order
to enforce or prevent any violations of the provisions of this Agreement.

         SECTION 10.11 NO AGENCY.

         This Agreement shall not constitute an appointment of any party as the
agent of any other party, nor shall any party have any right or authority to
assume, create or incur in any manner any obligation or other liability of any
kind, express or implied, against, in the name or on behalf of, any other party.
Nothing herein or in the transactions contemplated by this Agreement shall be
construed as, or deemed to be, the formation of a partnership by or among the
parties hereto (provided that nothing in this Section 10.11 shall affect the tax
treatment of the Company under Article III hereof).

         SECTION 10.12 LIMITATION OF LIABILITY.

         The debts, obligations and liabilities of the Company, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member, Manager or officer of the Company
shall be obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a Member, Manager and/or officer.

         SECTION 10.13 NON-EXCLUSIVE BUSINESS.

         (a) Notwithstanding anything herein to the contrary, the parties hereto
agree that the Company shall not be the exclusive vehicle for G-P to engage in
the manufacture or sale of commercial tissue products or "away from home" tissue
products (the "Products"), or to engage in the Commercial Tissue Business and
that G-P shall have the right to engage in the manufacture or sale of Products
and

                                      -40-
<PAGE>

otherwise engage in the Commercial Tissue Business, whether directly or
through other Affiliates, without regard to the Company or any requirement that
G-P make such opportunity or Commercial Tissue Business available to the Company
in any way.

         (b) Notwithstanding anything herein to the contrary, the parties hereto
agree that the Company may provide to any member of the G-P Group the right to
use intangible Company Property, and such member of the G-P Group will have no
obligation to reimburse the Company for such use.

         (c) In the event G-P or a G-P Affiliate uses production equipment and
machines owned by the Company to produce products for G-P or a G-P Affiliate,
all costs, revenues and profits relating to such products shall be allocated to
the Company.

         (d) In the event G-P or a G-P Affiliate uses production equipment or
machines it owns that are located in facilities owned or operated by the Company
to produce products for G-P or a G-P Affiliate, G-P shall reimburse to the
Company an amount equal to the allocated overhead (including facility costs)
determined pursuant to the cost allocation methodology set forth in Exhibit B to
the Operating Support Services Agreement.

         SECTION 10.14  DISPUTE RESOLUTION.

         Except as otherwise provided in this Agreement, any dispute among the
Members hereto, including disputes related to the Ancillary Agreements and the
review of G-P Books related thereto, shall be resolved by the Members through
good faith negotiations. If such dispute cannot be resolved by such negotiation
it shall be submitted to non-binding commercial arbitration pursuant to the
commercial arbitration rules then in effect of the American Arbitration
Association, before a panel of not less than three arbitrators. All costs and
expenses incurred in connection with such proceeding shall be shared equally by
the Members, however each Member shall bear the cost of its legal fees. Only
upon the conclusion of arbitration proceedings in which a decision was rendered
may the Members bring an action in connection with such dispute in the United
States District Court or the state court sitting in New Castle County, Delaware.
Each Member agrees to irrevocably submit to the exclusive jurisdiction of such
court and agrees to waive any objection to laying venue in such court or that
such court is an inconvenient forum or does not have jurisdiction over the
Member.

                                      -41-
<PAGE>

         IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first written above.

                           GEORGIA-PACIFIC CORPORATION

                            By: /s/Michael C. Burandt
                            Name: Michael C. Burandt
                            Title:    Senior Vice President - Packaged Products

                            WISCONSIN TISSUE MILLS INC.

                            By: /s/William T. Tolley
                            Name: William T. Tolley
                            Title: Senior Vice President -
                               Finance and Chief Financial Officer

Consented/Agreed To
By the Company as Referenced
In Section 10.6

GEORGIA-PACIFIC TISSUE, LLC

By:       /s/Michael C. Burandt
Name:      Michael C. Burandt
Title:    Manager

                                      -42-EXHIBIT 10.17

                                CREDIT AGREEMENT

                                      AMONG

                           GEORGIA-PACIFIC CORPORATION

                            THE LENDERS NAMED HEREIN

                         BANK OF AMERICA NATIONAL TRUST
                            AND SAVINGS ASSOCIATION,
                            AS ADMINISTRATIVE AGENT,

                                 COMMERZBANK AG,
                                NEW YORK BRANCH,
                             AS DOCUMENTATION AGENT,

                                       AND

                            THE CHASE MANHATTAN BANK
                                       AND
                                 CITIBANK, N.A.,
                            AS CO-SYNDICATION AGENTS

                         BANC OF AMERICA SECURITIES LLC,
                    SOLE BOOK MANAGER AND SOLE LEAD ARRANGER

                                 $1,000,000,000

                            DATED AS OF JULY 22, 1999

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                       Page
<S>                        <C>                                                                        <C>
ARTICLE 1                     DEFINITIONS AND ACCOUNTING TERMS                                          1

1.01                          Certain Defined Terms.                                                    1
1.02                          Computation of Time Periods.                                              14
1.03                          Accounting Matters.                                                       14
1.04                          Certain Terms.                                                            14
ARTICLE 2                     AMOUNTS AND TERMS OF THE LOANS                                            15
2.01                          Committed Loans.                                                          15
2.02                          Procedure for Committed Borrowings.                                       15
2.03                          Bid Borrowings.                                                           16
2.04                          Procedure for Bid Borrowings.                                             17
2.05                          Evidence of Indebtedness.                                                 19
2.06                          Optional Reduction of the Commitments.                                    19
2.07                          Repayment.                                                                19
2.08                          Optional Prepayments.                                                     20
2.09                          Interest.                                                                 20
2.10                          Default Interest.                                                         21
2.11                          Continuation and Conversion Elections for Committed Loans.                21
2.12                          Termination of Prior Commitments.                                         22
ARTICLE 3                     THE LETTERS OF CREDIT                                                     22
3.02                          Issuance, Amendment and Renewal of Letters of Credit.                     24
3.03                          Role of the Issuing Bank.                                                 26
3.04                          Obligations Absolute.                                                     26
3.05                          Cash Collateral Pledge.                                                   27
3.06                          Letter of Credit Fees.                                                    27
3.07                          International Standby Practices.                                          28
ARTICLE 4                     FEES; PAYMENTS; TAXES                                                     28
4.01                          Fees.                                                                     28
4.02                          Computation of Interest, Fees.                                            29
4.03                          Payments by the Company.                                                  29
4.04                          Payments by the Lenders.                                                  30
4.05                          Taxes.                                                                    31
4.06                          Sharing of Payments, Etc.                                                 35
ARTICLE 5                     CHANGES IN CIRCUMSTANCES, ETC.                                            35
5.01                          Eurodollar Rate Protection.                                               35
5.02                          Additional Interest on Eurodollar Loans.                                  35
5.03                          Increased Costs.                                                          36
5.04                          Illegality.                                                               36
5.05                          Capital Adequacy.                                                         36
5.06                          Funding Losses.                                                           37
5.07                          Funding; Certificates of Lenders.                                         37
5.08                          Change of Lending Office; Limitation on Increased Costs.                  38
5.09                          Replacement of Lenders.                                                   38

<PAGE>

ARTICLE 6                     REPRESENTATIONS AND WARRANTIES                                            39
6.01                          Corporate Existence; Compliance with Law.                                 39
6.02                          Corporate Power; Authorization.                                           39
6.03                          Enforceable Obligations.                                                  40
6.04                          Taxes.                                                                    40
6.05                          Financial Matters.                                                        40
6.06                          Litigation.                                                               41
6.07                          Subsidiaries.                                                             41
6.08                          Liens.                                                                    41
6.09                          No Burdensome Restrictions; No Defaults.                                  41
6.10                          Investment Company Act; Public Utility Holding Company Act.               41
6.11                          Margin Regulations.                                                       42
6.12                          Environmental Matters.                                                    42
6.13                          Labor Matters.                                                            44
6.14                          ERISA Plans.                                                              44
6.15                          Y2K Review.                                                               44
6.16                          Swap Obligations.                                                         44
6.17                          Full Disclosure.                                                          44
ARTICLE 7                     CONDITIONS PRECEDENT                                                      44
7.01                          Conditions Precedent to the First Loan.                                   45
7.02                          Additional Conditions Precedent to the First Loan.                        46
7.03                          Conditions  Precedent  to Each  Committed  Loan and  Letter  of Credit    46
7.04                          Conditions Precedent to Each Bid Borrowing.                               47
ARTICLE 8                     AFFIRMATIVE COVENANTS                                                     47
8.01                          Application of Proceeds.                                                  48
8.02                          Compliance with Laws, Etc.                                                48
8.03                          Payment of Taxes, Etc.                                                    48
8.04                          Maintenance of Insurance.                                                 48
8.05                          Preservation of Corporate Existence, Etc.                                 48
8.06                          Access.                                                                   48
8.07                          Keeping of Books.                                                         48
8.08                          Maintenance of Properties, Etc.                                           48
8.09                          Financial Statements.                                                     49
8.10                          Reporting Requirements.                                                   49
8.11                          ERISA Plans.                                                              50
8.12                          Environmental Compliance; Notice.                                         50
8.13                          New Subsidiaries.                                                         50
ARTICLE 9                     NEGATIVE COVENANTS                                                        50
9.01                          Liens, Etc.                                                               50
9.02                          Sale-Leaseback Transactions.                                              52
9.03                          Mergers, Etc.                                                             54
9.04                          Transactions with Affiliates.                                             54
9.05                          Accounting Changes.                                                       54
9.06                          Margin Regulations.                                                       54
9.07                          Negative Pledges, Etc.                                                    54
9.08                          Leverage Ratio.                                                           54
ARTICLE 10                    EVENTS OF DEFAULT                                                         54

<PAGE>

10.01                         Events of Default.                                                        54
10.02                         Remedies.                                                                 57
ARTICLE 11                    THE AGENT                                                                 57
11.01                         Appointment.                                                              57
11.02                         Delegation of Duties.                                                     58
11.03                         Liability of Agent.                                                       58
11.04                         Reliance by Agent.                                                        58
11.05                         Notice of Default.                                                        59
11.06                         Credit Decision.                                                          59
11.07                         Indemnification.                                                          59
11.08                         Agent in Individual Capacity.                                             60
11.09                         Successor Agent.                                                          60
11.10                         Documentation, Co-Syndication, Managing Agents.                           60
ARTICLE 12                    MISCELLANEOUS                                                             60
12.01                         Notices, Etc.                                                             60
12.02                         Amendments, Etc.                                                          61
12.03                         No Waiver; Remedies.                                                      62
12.04                         Costs and Expenses.                                                       62
12.05                         Indemnity.                                                                62
12.06                         Right of Set-off.                                                         63
12.07                         Binding Effect.                                                           63
12.08                         Assignments, Participations, Etc.                                         64
12.09                         Confidentiality.                                                          65
12.10                         Survival.                                                                 66
12.11                         Severability.                                                             66
12.12                         Headings.                                                                 66
12.13                         No Third Parties Benefited.                                               66
12.14                         Governing Law.                                                            66
12.15                         Execution in Counterparts.                                                66
12.16                         ENTIRE AGREEMENT.                                                         66
12.17                         WAIVER OF JURY TRIAL                                                      69

</TABLE>

<PAGE>

                                    SCHEDULES

Schedule          Description
--------          -----------
1.01(a)           Commitments; Commitment Percentages
1.01(b)           Lending Offices
6.02(d)           Corporate Power; Authorizations
6.07              Subsidiaries
6.12              Environmental Matters
6.13              Labor Matters
6.14              ERISA
9.01              Existing Liens

                                    EXHIBITS

Exhibit           Description
-------           -----------
2.02(a)           Form of Notice of Borrowing
2.04(a)           Form of Competitive Bid Request
2.05(b)           Form of Promissory Note (Committed Loans)
2.05(c)           Form of Promissory Note (Bid Loans)
2.11(b)           Form of Notice of Conversion/Continuation
7.01(c)           Form of Subsidiary Guaranty
7.01(d)           Form of Opinion of Counsel for the Company
7.01(e)           Form of Contribution Agreement
7.02(d)           Form of Officer's Closing Certificate
8.09(c)           Form of Compliance Certificate
12.08(b)          Form of Assignment and Assumption Agreement

<PAGE>

                                CREDIT AGREEMENT

         This CREDIT AGREEMENT is entered into as of July 22, 1999 among
GEORGIA-PACIFIC CORPORATION, a Georgia corporation (the "Company"), the various
LENDERS that are, or may from time to time become, party hereto (the "Lenders")
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative
agent for the Lenders (in such capacity, the "Agent"), COMMERZBANK AG, NEW YORK
BRANCH, as Documentation Agent, and THE CHASE MANHATTAN BANK and CITIBANK, N.A.,
as Co-Syndication Agents.

         WHEREAS, the Company, certain of the Lenders and the Agent are party to
the Credit Agreement, dated as of December 23, 1996, as amended (the "1996
Credit Agreement");

         WHEREAS, the Company has terminated the commitments under the 1996
Credit Agreement and desires to enter into a new credit facility; and

         WHEREAS, the Company has obtained commitments from the Lenders,
pursuant to which the Lenders are willing to make loans to the Company and to
provide certain other credit facilities to the Company (including a competitive
bid facility) in a maximum aggregate principal amount at any one time
outstanding not to exceed $1,000,000,000, on the terms and subject to the
conditions set forth herein;

         NOW THEREFORE, the parties hereto agree as follows:

                                   ARTICLE 1
                        DEFINITIONS AND ACCOUNTING TERMS

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

         "Adjusted Reference Rate" means the fluctuating interest rate per annum
equal to the higher of (a) the sum of the Federal Funds Rate plus 1/2% and (b)
the rate of interest (the "Reference Rate") publicly announced from time to time
by Bank of America at its executive offices, as its reference rate or prime
rate. The Reference Rate is a rate set by Bank of America based upon various
factors, including Bank of America's cost and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below the Reference Rate. Any change in
the Reference Rate shall take effect at the opening of business on the day
specified in the public announcement of such change.

         "Affiliate" means, with respect to any Person, any Subsidiary of such
Person and any other Person which, directly or indirectly, controls, or is
controlled by, or is under common control with, such Person (excluding any
trustee under, or any committee with responsibility for administering, any
Plan). A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power:

              (a) to vote 10% or more of the securities having ordinary voting
         power for the election of directors of such other Person; or

              (b) to direct or cause the direction of the management and
         policies of such other Person, whether through the ownership of voting
         securities, by contract or otherwise.

                                       -1
<PAGE>

         "Agent" means Bank of America in its capacity as administrative agent
for the Lenders, together with any successor thereto in such capacity.

         "Agent-Related Persons" means Bank of America and any successor agent
arising under Section 11.09 and any successor letter of credit issuing bank
hereunder, together with their respective Affiliates (including, in the case of
Bank of America, the Arranger), and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.

         "Aggregate Tranche A Commitments" means the aggregate amount of the
Tranche A Commitments of all the Lenders as in effect from time to time.

         "Aggregate Tranche B Commitments" means the aggregate amount of the
Tranche B Commitments of all the Lenders as in effect from time to time.

         "Agreement" means this Credit Agreement.

         "Arranger" means Banc of America Securities LLC.

         "Assignee" means any Person which becomes a party to this Agreement
pursuant to Section 12.08.

         "Available Tranche A Commitments" means, at any time, the excess, if
any, of the Aggregate Tranche A Commitments in effect at such time over the sum
of (a) the aggregate principal amount of all Tranche A Loans then outstanding,
plus (b) the aggregate principal amount of all Tranche A Bid Loans then
outstanding, plus (c) the outstanding Tranche A L/C Obligations.

         "Available Tranche B Commitments" means, at any time, the excess, if
any, of the Aggregate Tranche B Commitments in effect at such time over the sum
of (a) the aggregate principal amount of all Tranche B Loans then outstanding,
plus (b) the aggregate principal amount of all Tranche B Bid Loans then
outstanding, plus (c), the aggregate principal amount of all 1996 Facility Bid
Loans then outstanding, plus (d) the outstanding Tranche B L/C Obligations.

         "Bank of America" means Bank of America National Trust and Savings
Association, a national banking association and its successors by merger and
permitted assigns.

         "Base Rate" has the meaning specified in Section 2.04(a)(iv).

         "Base Rate Bid Loan" means any Bid Loan that bears interest at a rate
determined with reference to a Base Rate.

         "Bid Borrowing" means an extension of credit hereunder consisting of
one or more Bid Loans made to the Company on the same day by one or more
Lenders.

         "Bid Loan" means either a Tranche A Bid Loan or a Tranche B Bid Loan.

         "Borrowing" means a Bid Borrowing or a Committed Borrowing.

         "Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City, New York, or San Francisco,
California, are authorized or required by law to

                                       -2
<PAGE>

close and, if the applicable Business Day relates to any Eurodollar Loan, means
such a day on which dealings are carried on in the London interbank market.

         "Cash Collateralize" means to pledge and deposit with or deliver to the
Agent, for the benefit of the Agent, the Issuing Bank and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Agent and the Issuing
Bank (which documents are hereby consented to by the Lenders). Derivatives of
such term shall have corresponding meaning. The Company hereby grants the Agent,
for the benefit of the Agent, the Issuing Bank and the Lenders, a security
interest in all such cash and deposit account balances. Cash collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Bank of America.

         "CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act of 1980.

         "CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.

         "Closing Date" means the date on which all the conditions precedent set
forth in Sections 7.01 and 7.02 shall have been satisfied or waived.

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

         "Commitment" means for any Lender, either its Tranche A Commitment or
Tranche B Commitment, as applicable.

         "Commitments" means, for any Lender, the sum of its Tranche A
Commitment and Tranche B Commitment.

         "Commitment Percentage" means, as to any Lender at any time, the
percentage of the aggregate Commitments represented by such Lender's Commitment
at such time, as set forth on Schedule 1.01(a), as such percentage may be
modified from time to time in accordance with Notices of Assignment delivered
hereunder pursuant to Section 12.08.

         "Committed Borrowing" means an extension of credit hereunder consisting
of Tranche A Loans or Tranche B Loans (but not both) of the same type made on
the same day by the Lenders ratably according to their respective Commitment
Percentages and, in the case of Eurodollar Loans, having the same Interest
Periods.

         "Committed Loan" means a Tranche A Loan or a Tranche B Loan by a Lender
to the Company pursuant to Section 2.01 and may be in the form of a Eurodollar
Loan or a Reference Rate Loan, each of which shall be a "type" of Committed
Loan.

         "Company" has the meaning specified in the introduction to this
Agreement.

         "Competitive Bid" means an offer by a Lender to make a Bid Loan in
accordance with Section 2.04(b).

         "Competitive Bid Request" has the meaning specified in Section 2.04(a).

                                       -3
<PAGE>

         "Contractual Obligation" means, with respect to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is subject.

         "Contribution Agreement" means the Contribution Agreement of even date
herewith between the Company and each of its Subsidiaries now or hereafter
parties to the Subsidiary Guaranty or the "Subsidiary Guaranty" as defined in
the North American Timber Agreement.

         "Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.

         "Debt Rating" means, on any date, the rating of the Company's senior
unsecured long-term Indebtedness, as most recently publicly announced by Moody's
and S&P, whichever is higher; provided, however, that if only one such rating is
available, the applicable interest rate or fee to be determined based on such
rating shall be determined solely by reference to such one rating.

         "Default" means any event or condition which, with the giving of notice
or the lapse of time, or both, would become an Event of Default.

         "Dollar" and "$" mean lawful money of the United States of America.

         "EBITDA" means, as of the end of any Measurement Period, the sum of the
following, calculated for the Company and its Subsidiaries on a consolidated
basis: (a) net income (or net loss) for such period, plus (b) all amounts
treated as expenses for depreciation, interest and the non-cash amortization of
intangibles of any kind to the extent included in the determination of such net
income (or loss), plus (c) cost of timber sold by North American Timber
Corporation (to the extent it represents depletion) to the extent included in
the determination of such net income (or loss), plus (d) all accrued taxes on or
measured by income to the extent included in the determination of such net
income (or loss); provided, however, that net income (or loss) shall be computed
for these purposes without giving effect to extraordinary cash gains or
non-recurring, non-cash items.

         "Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $250,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $250,000,000,
provided that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary
of a Person of which a Lender is a Subsidiary, or (iii) a Person of which a
Lender is a Subsidiary; and (d) any other Person approved in writing by the
Company, the Agent, and the Issuing Bank.

         "Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules and regulations (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment.

         "ERISA" means the Employee Retirement Income Security Act of 1974,
together with the regulations thereunder.

                                       -4
<PAGE>

         "Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.

         "Eurodollar Loan" means any Committed Loan that bears interest at a
rate determined with reference to LIBOR.

         "Eurodollar Reserve Percentage" means the maximum reserve percentage of
any Lender (expressed as a decimal) in effect on the date LIBOR for any Interest
Period is determined under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities having
a term equal to such Interest Period.

         "Event of Default" has the meaning specified in Section 10.01.

         "Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate".

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.

         "Fee Letter" means the letter agreement dated the Closing Date between
the Company and Bank of America regarding the payment of certain fees.

         "Fixed Rate" means a fixed annual percentage rate.

         "Fixed Rate Bid Loan" means any Bid Loan that bears interest determined
with reference to a Fixed Rate.

         "Form 1001" has the meaning specified in Section 4.05(f)(i)(B).

         "Form 4224" has the meaning specified in Section 4.05(f)(i)(A).

         "Form W-8" has the meaning specified in Section 4.05(f)(i)(B).

         "Form W-9" has the meaning specified in Section 4.05(f)(i)(A).

         "Funded Indebtedness" means, for any day, the sum of (i) all
Indebtedness for Borrowed Money of the Company and its consolidated Subsidiaries
outstanding on such day plus (ii) the aggregate capital invested as of such day
by Persons other than the Company and its consolidated Subsidiaries in
receivables and other accounts sold to such Persons by the Company and its
consolidated Subsidiaries, excluding receivables and other accounts sold in
connection with the sale of a business or the sale of the assets and/or
operations generating such receivables and other accounts.

                                       -5
<PAGE>

         "GAAP" means, as of any date of determination, generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the accounting profession) or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession.

         "Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any central bank thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

         "Hazardous Material" means:

              (a) any "hazardous substance", as defined by CERCLA;

              (b) any "hazardous waste", as defined by the Resource Conservation
         and Recovery Act, 42 U.S.C. Section 690, et seq., as in effect from
         time to time;

              (c) any petroleum product; or

              (d) any pollutant or contaminant or hazardous, dangerous or toxic
         chemical, material or substance within the meaning of any other
         applicable federal, state or local law, regulation, ordinance, or
         requirement (including consent decrees and administrative orders)
         relating to or imposing liability or standards of conduct concerning
         any hazardous, toxic or dangerous waste, substance or material, all as
         amended or hereafter amended.

         "Indebtedness" of any Person means, without duplication, the
consolidated Indebtedness for Borrowed Money of such Person and guaranties of
indebtedness of others provided by such Person, all as determined in accordance
with GAAP consistent with the accounting principles applied in the preparation
of the financial statements referred to in Section 6.05(a).

         "Indebtedness for Borrowed Money" of any Person means, without
duplication,

              (a) all indebtedness of such Person for borrowed money, including
         the Company's Premium Equity Participating Security Units, whether or
         not treated as indebtedness under GAAP, until such time as they are
         converted into common stock of the Company;

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

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

              (d) all indebtedness of such Person created or arising under any
         conditional sale or other title retention agreement with respect to
         property acquired by such Person (even though the rights and remedies
         of the seller or creditor under such agreement in the event of default
         are limited to repossession or sale of such property);

                                       -6
<PAGE>

              (e) all rental obligations of such Person under leases capitalized
         under GAAP as disclosed in the financial statements delivered pursuant
         to Section 8.09; and

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

         "Indemnified Party" has the meaning specified in Section 12.05(a).

         "Interest Payment Date" means (a) (i) with respect to any Eurodollar
Loan, the last day of each Interest Period applicable to such Eurodollar Loan
and, with respect to any Interest Period of six months' duration, the date which
falls three months after the beginning of such Interest Period, and (ii) with
respect to any Reference Rate Loan, the last Business Day of each calendar
quarter and (b) with respect to any Bid Loan, the maturity date or dates
specified by the Company in the relevant Competitive Bid Request.

         "Interest Period" means, with respect to any Eurodollar Loan, the
period commencing on the Business Day such Eurodollar Loan is disbursed or
continued as a Eurodollar Loan or on the date on which a Reference Rate Loan or
any portion thereof is converted into a Eurodollar Loan and ending on the date
one, two, three or six months thereafter, as selected by the Company in its
Notice of Borrowing or Notice of Conversion/Continuation; provided that:

              (a) in the case of the continuation of a Eurodollar Loan pursuant
         to Section 2.11, the Interest Period applicable after the continuation
         of such Loan shall commence on the last day of the preceding Interest
         Period;

              (b) if any Interest Period would otherwise end on a day which is
         not a Business Day, that Interest Period shall be extended to the next
         succeeding Business Day, unless the result of such extension would be
         to carry such Interest Period into another calendar month, in which
         event such Interest Period shall end on the immediately preceding
         Business Day;

              (c) any Interest Period that begins on the last Business Day of a
         calendar month (or on a day for which there is no numerically
         corresponding day in the calendar month at the end of such Interest
         Period) shall end on the last Business Day of the calendar month at the
         end of such Interest Period; and

              (d) no Interest Period for any Eurodollar Loan shall extend beyond
         the Tranche A Termination Date, in the case of a Borrowing of Tranche A
         Loans, or the Tranche B Termination Date, in the case of a Borrowing of
         Tranche B Loans.

         "Investments" means all investments, whether by acquisition of stock or
indebtedness, or by loan, advance, transfer of property, capital contribution or
otherwise.

         "Investments in Unrestricted Subsidiaries" means Investments made by
the Company or by any Restricted Subsidiary in Unrestricted Subsidiaries, net of
Investments made by Unrestricted Subsidiaries in the Company or any Restricted
Subsidiary. If any corporation which becomes a Restricted Subsidiary after the
date of this Agreement shall, at the time it becomes a Restricted Subsidiary,
have any Investments in an Unrestricted Subsidiary, such Investments shall be
deemed to be Investments made by

                                       -7
<PAGE>

the Company in such Unrestricted Subsidiary at the time such corporation becomes
a Restricted Subsidiary, in the amount at which such Investments are then
carried on the books of such corporation. If any corporation shall become an
Unrestricted Subsidiary after the date of this Agreement, the Investments of the
Company and its Restricted Subsidiaries in such corporation shall be deemed to
be Investments made at the time such corporation becomes an Unrestricted
Subsidiary, in the amount at which such Investments are then carried on the
books of the Company and its Restricted Subsidiaries.

         "Issuance Date" has the meaning specified in subsection 3.01(a).

         "Issue" means, with respect to any Letter of Credit, to issue or to
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
meanings.

         "Issuing Bank" means Bank of America in its capacity as issuer of one
or more Letters of Credit hereunder.

         "Lender" has the meaning specified in the introduction to this
Agreement and includes each Lender listed on the signature pages hereof and each
Assignee. References to the "Lenders" shall include Bank of America in its
capacity as Issuing Bank; for purposes of clarification only, to the extent that
Bank of America may have any rights or obligations in addition to those of the
Lenders due to its status as Issuing Bank, its status as such will be
specifically referenced.

         "Lending Office" means, with respect to any Lender, (a) in the case of
a Committed Loan, the office or offices of such Lender specified as its
"Domestic Lending Office" or "Eurodollar Lending Office", as the case may be,
opposite its name on Schedule 1.01(b) or in the applicable Notice of Assignment,
or such other office or offices of such Lender as such Lender may from time to
time specify to the Company and the Agent and (b) in the case of a Bid Loan, the
office of such Lender notified by such Lender to the Company as its Lending
Office with respect to such Bid Loan or, if such Lender fails to so notify the
Company, such Lender's Domestic Lending Office.

         "L/C Advance" means each Lender's participation in any L/C Borrowing in
accordance with its Commitment Percentage.

         "L/C Amendment Application" means an application form for amendment of
outstanding standby letters of credit as shall at any time be in use at the
Issuing Bank, as the Issuing Bank shall request.

         "L/C Application" means an application form for issuances of standby
letters of credit as shall at any time be in use at the Issuing Bank, as the
Issuing Bank shall request.

         "L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which shall not have been reimbursed on the date when
made.

         "L/C Commitment" means the commitment of the Issuing Bank to Issue, and
the commitment of the Lenders severally to participate in, Letters of Credit
from time to time Issued or outstanding under Article 3, in an aggregate amount
not to exceed on any date the amount of $150,000,000, as the same shall be
reduced as a result of a reduction in the L/C Commitment pursuant to Section
2.06. The L/C Commitment is a part of the combined Commitments, rather than a
separate, independent commitment.

         "L/C Obligations" means at any time the sum of Tranche A L/C
Obligations and Tranche B L/C Obligations.

                                       -8
<PAGE>

         "L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document relating to
any Letter of Credit, including any of the Issuing Bank's standard-form
documents for Letter of Credit Issuances.

         "Letter of Credit" means any Tranche A Letter of Credit or Tranche B
Letter of Credit.

         "LIBOR" means, for any Interest Period:

         (a) the rate of interest per annum (carried out to the fifth decimal
point) equal to the rate determined by the Agent to be the offered rate that
appears on the page of the Telerate Screen that displays an average British
Bankers Association Interest Settlement Rate (such page currently being page
number 3750) for deposits in dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period; or

         (b) in the event the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall cease to
be available, the rate per annum (carried to the fifth decimal place) equal to
the rate determined by the Agent to be the offered rate on such other page or
other service that displays an average British Bankers Association Interest
Settlement Rate for deposits in dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period; or

         (c) in the event the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by the Agent as the
rate of interest at which dollar deposits (for delivery on the first day of such
Interest Period) in same-day funds in the approximate amount of the applicable
Committed Loan and with a term equivalent to such Interest Period would be
offered by its London Branch to major banks in the offshore dollar market at
their request at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period.

         "Lien" means any mortgage, security interest, pledge or lien.

         "Loan" means a loan by a Lender to the Company pursuant to Article 2 or
Article 3 in the form of a Committed Loan, a Bid Loan, or an L/C Advance.

         "Loan Documents" means this Agreement, the Subsidiary Guaranty, the
Contribution Agreement, the L/C Related Documents, and any promissory note
issued pursuant hereto.

         "Loan Parties" means, collectively, the Company and each other Person
(other than the Agent and the Lenders) who is a party to a Loan Document.

         "Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business or properties of the Company and its
Subsidiaries taken as a whole or (b) the legality, validity or enforceability of
any Loan Document.

                                       -9
<PAGE>

         "Measurement Period" means a period consisting of four consecutive
fiscal quarters of the Company and ending on the last day of the most recently
completed fiscal quarter of the Company.

         "Moody's" means Moody's Investors Services, Inc. or any successor to
the rating agency business thereof.

         "Net Tangible Assets" means, at any date, the aggregate amount of
assets, including the amount of any receivables or other accounts of the Company
and its Subsidiaries sold in connection with any receivables sale transaction
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities, (b) any item representing Investments in
Unrestricted Subsidiaries and (c) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expenses and other like intangibles, all
of the foregoing as set forth on the then most recent consolidated balance sheet
of the Company and its Subsidiaries and computed in accordance with GAAP.

         "Net Worth" means, at any date, the excess of Total Assets at such date
over Total Liabilities at such date.

         "1996 Credit Agreement" has the meaning specified in the first recital
of this Agreement.

         "1996 Facility Bid Loan" means any bid loan outstanding under the 1996
Credit Agreement on the Closing Date.

         "North American Timber Agreement" means the Credit Agreement, dated as
of the date hereof, by and among North American Timber Corporation, the Lenders,
and Bank of America as the agent for the Lenders.

         "Notice of Assignment" has the meaning specified in Section 12.08(b).

         "Notice of Borrowing" has the meaning specified in Section 2.02(a).

         "Notice of Conversion/Continuation" has the meaning specified in
Section 2.11(b).

         "Obligations" means all Loans, L/C Obligations and other Indebtedness,
advances, debts, liabilities, obligations, covenants and duties owing by the
Company, or any other Loan Party to any Lender, the Agent, any Affiliate of any
Lender or the Agent or any Indemnified Party, of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument, but
in each case only as arising under or in connection with this Agreement or under
or in connection with any other Loan Document, whether or not for the payment of
money, whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term "Obligations"
includes all interest, charges, expenses, fees, attorneys' fees and
disbursements (including the allocated cost of in-house counsel) and any other
sum chargeable to the Company, or any other Loan Party under or in connection
with this Agreement or any other Loan Document.

         "Other Taxes" has the meaning specified in Section 4.05(b).

         "Participant" has the meaning specified in Section 12.08(d).

                                      -10
<PAGE>

         "PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

         "Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Company or any corporation, trade, or business that is, along with the Company,
a member of its Controlled Group, may have liability, including a reasonable
possibility of liability due to having been a substantial employer within the
meaning of Section 4063 of ERISA at any time during the preceding five years, or
by reason of being deemed to be a contributing sponsor under Section 4069 of
ERISA.

         "Permitted Liens" means the Liens permitted or required by Section
9.01.

         "Permitted Swap Obligations" means all obligations (contingent or
otherwise) of the Company or any Subsidiary existing or arising under Swap
Contracts, provided that such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments or assets held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person in conjunction with a securities repurchase program not otherwise
prohibited hereunder, and not for purposes of speculation or taking a "market
view".

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

         "Plan" means each Pension Plan or Welfare Plan, and any other employee
benefit plan (within the meaning of Section 3(3) of ERISA) sponsored or
maintained by the Company or any Subsidiary of the Company.

         "Principal Property" means any mill, manufacturing plant, manufacturing
facility or timberlands, owned by the Company and/or one or more Restricted
Subsidiaries and located within the continental United States of America;
provided, however, that the term "Principal Property" shall not include (a) any
such mill, plant, facility or timberlands or portion thereof (i) which is
financed by obligations issued by a State, a Territory or a possession of the
United States of America or any political subdivision of any of the foregoing,
or the District of Columbia, the interest on which is excludable from gross
income of the holders thereof pursuant to the provisions of Section 103(a)(1)
(but only if by reason of Section 103(b)(4)(E) or (F)) of the Internal Revenue
Code of 1954, as amended (or any predecessor or successor to such provision) as
in effect at the time of the issuance of such obligations, or (ii) which in the
opinion of the Company's Board of Directors is not of material importance to the
total business conducted by the Company and the Restricted Subsidiaries,
considered as a whole; or (b) any timberlands designated by the Company's Board
of Directors as being held primarily for development and/or sale rather than for
the production of timber; or (c) any minerals or mineral rights.

         "Principal Subsidiary" means each of North American Timber Corp., a
Delaware corporation, Unisource Worldwide, Inc., a Delaware corporation, Great
Northern Nekoosa Corporation, a Maine corporation; Brunswick Pulp & Paper
Company, a Delaware corporation; Georgia-Pacific West, Inc., an Oregon
corporation; G-P Gypsum Corporation, a Delaware corporation; Leaf River Forest
Products, Inc., a Delaware corporation; Nekoosa Packaging Corporation, a
Delaware corporation, Nekoosa Papers Inc., a

                                      -11
<PAGE>

Wisconsin corporation, and any other Subsidiary having assets constituting at
least 10% of the Company's consolidated assets.

         "Reference Rate" has the meaning specified in the definition of
Adjusted Reference Rate.

         "Reference Rate Loan" means any Loan that bears interest at a rate
determined with reference to the Adjusted Reference Rate.

         "Release" means a "release", as such term is defined in CERCLA.

         "Replacement Lender" has the meaning specified in Section 5.09.

         "Required Lenders" means at any time Lenders having 51% or more of the
Commitments and, if the Commitments have been terminated, Lenders holding 51% or
more of the then aggregate unpaid principal amount of the Loans made by the
Lenders.

         "Requirement of Law" means, as to any Person, the charter and by-laws
or other organization or governing documents of such Person, and any law, rule
or regulation including the requirements of Environmental Laws and ERISA, the
Securities Act of 1933, the Securities Exchange Act of 1934, Regulations T, U
and X of the Federal Reserve Board or any order, decree or other determination
of an arbitrator or a court or other Governmental Authority applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.

         "Responsible Officer" means, with respect to any Person, the Chief
Executive Officer, the President, any Vice-Chairman or any of the Vice
Presidents or the Treasurer of such Person or, with respect to financial
matters, the Chief Financial Officer, the Executive Vice President-Finance and
Chief Financial Officer or the Vice President and Treasurer of such Person.

         "Restricted Subsidiary" means any Subsidiary of the Company (a)
substantially all of the property of which is located within the continental
United States of America and (b) which itself, or together with the Company
and/or one or more other Restricted Subsidiaries, owns a Principal Property.

         "Sale-Leaseback Transaction" has the meaning specified in Section 9.02.

         "S&P" means Standard & Poor's or any successor to the rating agency
business thereof.

         "Subsidiary" means, with respect to any Person, any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors (or others performing a
comparable function) of such corporation is at the time directly or indirectly
owned by such Person, by such Person and one or more other Subsidiaries of such
Person, or by one or more other Subsidiaries of such Person.

         "Subsidiary Guaranty" has the meaning specified in Section 7.01(c).

         "Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of

                                      -12
<PAGE>

the foregoing, and, unless the context otherwise clearly requires, any master
agreement relating to or governing any or all of the foregoing.

         "Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined by the Agent
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Swap Contracts (which may include any Lender).

         "Taxes" has the meaning specified in Section 4.05(a).

         "Total Assets" means, at any date, without duplication, the total
consolidated assets of the Company and its Subsidiaries, as determined in
accordance with GAAP.

         "Total Liabilities" means, at any date, without duplication, the total
consolidated liabilities of the Company and its Subsidiaries, determined in
accordance with GAAP.

         "Tranche A Bid Loan" means a Loan made by a Lender to the Company
pursuant to subsection 2.03(a) and may be a Base Rate Bid Loan or a Fixed Rate
Bid Loan.

         "Tranche A Commitment" means for each Lender, as the context may
require, (a) the amount in dollars set forth on Schedule 1.01(a) opposite the
name of such Lender under the heading "Tranche A Commitments" or as otherwise
set forth in any Notice of Assignment, as such amount may be reduced pursuant to
Section 2.06 or as a result of one or more assignments pursuant to Section
12.08; or (b) the obligation of such Lender to extend credit to the Company
hereunder in the amount specified in the immediately preceding clause (a).

         "Tranche A L/C Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Tranche A Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Tranche A Letters of
Credit, including all outstanding L/C Borrowings made on account of Tranche A
Letters of Credit.

         "Tranche A Letter of Credit" means any letter of credit Issued by the
Issuing Bank pursuant to Article 3 and allocated in the Company's request
therefor to the Tranche A Commitments.

         "Tranche A Loan" has the meaning set forth in subsection 2.01(a).

         "Tranche A Termination Date" means July 20, 2000.

         "Tranche B Bid Loan" means a Loan made by a Lender to the Company
pursuant to subsection 2.03(b) and may be a Base Rate Bid Loan or a Fixed Rate
Bid Loan.

         "Tranche B Commitment" means for each Lender, as the context may
require (a) the amount in dollars set forth on Schedule 1.01(a) opposite the
name of such Lender under the heading "Tranche B Commitments" or as otherwise
set forth in any Notice of Assignment, as such amount may be reduced pursuant to
Section 2.06 or as a result of one or more assignments pursuant to Section
12.08; or (b) the obligation of such Lender to extend credit to the Company
hereunder in the amount specified in the immediately preceding clause (b).

                                      -13
<PAGE>

         "Tranche B L/C Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Tranche B Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Tranche B Letters of
Credit, including all outstanding L/C Borrowings made on account of Tranche B
Letters of Credit.

         "Tranche B Letter of Credit" means any letter of credit Issued by the
Issuing Bank pursuant to Article 3 and allocated in the Company's request
therefor to the Tranche B Commitments.

         "Tranche B Loan" has the meaning set forth in Section 2.01(b).

         "Tranche B Termination Date" means July 22, 2004.

         "Unrestricted Subsidiary" means any Subsidiary of the Company other
than a Restricted Subsidiary.

         "Utilization Fee" has the meaning specified in Section 4.01(a).

         "Value" means, with respect to a Sale-Leaseback Transaction, as of any
particular time, the amount equal to the greater of (a) the net proceeds of the
sale or transfer of the property leased pursuant to such Sale-Leaseback
Transaction or (b) the fair value in the opinion of the Board of Directors of
the Company of such property at the time of entering into such Sale-Leaseback
Transaction, in either case divided first by the number of full years of the
term of the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.

         "Welfare Plan" means a "welfare plan", as such term is defined in
Section (3)(1) of ERISA.

         1.02 Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding."

         1.03 Accounting Matters. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP, and all financial statements
referred to in Sections 8.09(a) and (b) shall be prepared in accordance with
GAAP; provided, however, that all computations determining compliance with
Article 8 shall use accounting principles consistent with those applied in the
preparation of the financial statements of the Company referred to in Section
6.05(a). The parties hereto agree that to the extent that any change in GAAP
affects the calculation of the financial covenant contained herein, the Agent
(at the direction of the Required Lenders) and the Company shall negotiate in
good faith to amend such financial covenant to account for such changes in GAAP.

         1.04 Certain Terms. The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.

         The words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole, including the Exhibits and Schedules
hereto, and not to any particular Article, Section, paragraph or clause in this
Agreement. The word "including" when used herein is not intended to be exclusive
and means "including, without limitation." References herein to an Article,
Section, paragraph or clause shall refer to the appropriate Article, Section,
paragraph or clause in this Agreement.

                                      -14
<PAGE>

         Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.

                                   ARTICLE 2
                         AMOUNTS AND TERMS OF THE LOANS

         2.01 Committed Loans.

         (a) Tranche A Loans. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, to make one or more Committed
Loans to the Company on any Business Day during the period commencing on the
Closing Date and ending on the Business Day next preceding the Tranche A
Termination Date (each such loan, a "Tranche A Loan"), in an aggregate principal
amount at any time outstanding which does not exceed such Lender's Tranche A
Commitment; provided, however, that after giving effect to any Committed
Borrowing of Tranche A Loans, (i) the aggregate principal amount of all Tranche
A Loans then outstanding, plus (ii) the aggregate principal amount of all
Tranche A Bid Loans then outstanding, plus (iii) the outstanding Tranche A L/C
Obligations shall not exceed the Aggregate Tranche A Commitments. Any principal
amount of the Tranche A Loans which is repaid or prepaid by the Company may be
reborrowed within the limitations set forth in this Section 2.01(a).

         (b) Tranche B Loans. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, to make one or more Committed
Loans to the Company on any Business Day during the period commencing on the
Closing Date and ending on the Business Day next preceding the Tranche B
Termination Date (each such loan, a "Tranche B Loan"), in an aggregate principal
amount at any time outstanding which does not exceed such Lender's Tranche B
Commitment.; provided, however, that after giving effect to any Committed
Borrowing of Tranche B Loans, (i) the aggregate principal amount of all Tranche
B Loans then outstanding, plus (ii) the aggregate principal amount of all
Tranche B Bid Loans then outstanding, plus (iii) the aggregate principal amount
of all 1996 Facility Bid Loans then outstanding, plus (vi) the outstanding
Tranche B L/C Obligations shall not exceed the Aggregate Tranche B Commitments.
Any principal amount of the Tranche B Loans which is repaid or prepaid by the
Company may be reborrowed within the limitations set forth in this Section
2.01(b).

         2.02 Procedure for Committed Borrowings.

         (a) Each Committed Borrowing shall be made on notice, delivered by the
Company to the Agent not later than 12:00 noon (New York City time) at least (i)
four Business Days prior to the date of such proposed Borrowing, in the case of
Eurodollar Loans, and (ii) one Business Day prior to the date of such proposed
Borrowing, in the case of Reference Rate Loans. Each such notice of a Committed
Borrowing (a "Notice of Borrowing") shall be irrevocable and shall be delivered
by facsimile, in substantially the form of Exhibit 2.02(a), specifying therein:

              (i) the date of such Borrowing, which shall be a Business Day;

              (ii) the amount of such Borrowing which, in the case of a
         Borrowing of Eurodollar Loans, shall be in the amount of $20,000,000 or
         an integral multiple of $10,000,000 in excess

                                      -15
<PAGE>

         thereof and, in the case of a Borrowing of Reference Rate Loans, shall
         be in the amount of $10,000,000 or an integral multiple of $5,000,000
         in excess thereof and shall not, in any case, exceed the unused
         Aggregate Tranche A Commitments or Aggregate Tranche B Commitments, as
         applicable, set forth in Section 2.01(a) or (b), respectively, on the
         date such Borrowing is made (after giving effect to each payment and
         prepayment made on such date);

              (iii) whether such Borrowing is to be of Tranche A Loans or
         Tranche B Loans;

              (iv) whether such Borrowing is to be comprised of Eurodollar Loans
         or Reference Rate Loans; and

              (v) if such Borrowing is to be comprised of Eurodollar Loans, the
         duration of the initial Interest Period applicable to such Loans.

If the Notice of Borrowing shall fail to specify the duration of the initial
Interest Period for any Committed Borrowing comprised of Eurodollar Loans, such
Interest Period shall be one month.

         (b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Lender thereof and of the amount of such Lender's share of such
Borrowing determined on the basis of such Lender's Commitment Percentage. Each
Lender shall make available to the Agent the amount of its ratable share of such
Borrowing in the manner and at the time set forth in Section 4.04(a).

         (c) After giving effect to any Committed Borrowing, there shall not be
more than seven different Interest Periods in effect.

         (d) Unless any applicable condition specified in Article 7 has not been
satisfied or waived, the Agent will make the funds received from the Lenders
promptly available to the Company by crediting the account of the Company on the
books of Bank of America, or such other account as shall have been specified by
the Company, with the aggregate of the amounts made available to the Agent by
the Lenders and in like funds as received by the Agent.

         2.03 Bid Borrowings.

         (a) In addition to Committed Borrowings pursuant to Section 2.01, each
Lender severally agrees that the Company may, as set forth in Section 2.04, from
time to time on any Business Day during the period commencing on the Closing
Date and ending on the Business Day next preceding the Tranche A Termination
Date request the Lenders to submit offers to make Tranche A Bid Loans to the
Company; provided, however, that the Lenders may, but shall have no obligation
to, submit such offers and the Company may, but shall have no obligation to,
accept any such offers; and provided, further, that at no time shall (a)(i) the
aggregate principal amount of all Tranche A Bid Loans made by all Lenders then
outstanding plus (ii) the aggregate principal amount of all Tranche A Loans then
outstanding plus (iii) the outstanding Tranche A L/C Obligations exceed (b) the
Aggregate Tranche A Commitments.

         (b) In addition to Committed Borrowings pursuant to Section 2.01, each
Lender severally agrees that the Company may, as set forth in Section 2.04, from
time to time on any Business Day during the period commencing on the Closing
Date and ending on the Business Day next preceding the Tranche B Termination
Date request the Lenders to submit offers to make Tranche B Bid Loans to the
Company; provided, however, that the Lenders may, but shall have no obligation
to, submit such offers and the Company may, but shall have no obligation to,
accept any such offers; and provided, further, that at no time shall (a)(i) the
aggregate principal amount of all Tranche B Bid Loans made by all Lenders then

                                      -16
<PAGE>

outstanding plus (ii) the aggregate principal amount of all Tranche B Loans then
outstanding plus (iii) the aggregate principal amount of all 1996 Facility Bid
Loans then outstanding plus (vi) the outstanding Tranche B L/C Obligations
exceed (b) the Aggregate Tranche B Commitments.

         2.04 Procedure for Bid Borrowings.

         (a) The Company may request a Bid Borrowing hereunder by delivering to
the Agent by facsimile not later than 11:00 a.m. (New York City time) at least
(i) four Business Days prior to the date of the proposed Borrowing, in the case
of a request for Base Rate Bid Loans, and (ii) two Business Days (or, in the
event the Company desires that Competitive Bids be furnished on the date of the
proposed Bid Borrowing, one Business Day) prior to the date of the proposed Bid
Borrowing in the case of a request for Fixed Rate Bid Loans, a solicitation for
Bid Loans (a "Competitive Bid Request"), in substantially the form of Exhibit
2.04(a) specifying therein:

              (i) the date of such Bid Borrowing, which shall be a Business Day;

              (ii) the aggregate amount of such Bid Borrowing, which shall be a
         minimum amount of $10,000,000 in excess thereof and shall not, in the
         case of a Tranche A Bid Borrowing, exceed the Available Tranche A
         Commitments on the date such proposed Borrowing is made (after giving
         effect to each payment and prepayment made on such date) or, in the
         case of a Tranche B Bid Borrowing, exceed the Available Tranche B
         Commitments on the date such proposed Borrowing is made (after giving
         effect to each payment and prepayment made on such date);

              (iii) the maturity date or dates for the partial or complete
         repayment of each Bid Loan to be made as part of such Bid Borrowing
         (none of which shall occur after the Tranche B Termination Date) and,
         in the case of each partial repayment, the amount thereof;

              (iv) whether the Bid Loans requested are Tranche A Bid Loans or
         Tranche B Bid Loans, and whether the Bid Loans requested are Base Rate
         Bid Loans or Fixed Rate Bid Loans and, in the case of Base Rate Bid
         Loans, the basis of calculation of such interest rate (the "Base Rate")
         to be used by the Lenders in determining the rate or rates of interest
         to be offered by them; and

              (v) any other terms to be applicable to such Bid Borrowing
         (including the extent to which terms similar to Section 4.05 shall be
         applicable to such Bid Borrowing).

The Agent shall promptly notify each Lender of its receipt of a Competitive Bid
Request by sending such Lender by facsimile a copy of such Competitive Bid
Request.

         (b) (i) Each Lender may, in response to a Competitive Bid Request, at
its option, irrevocably submit a Competitive Bid containing an offer to make one
or more Bid Loans at a rate or rates of interest specified by such Lender in its
sole discretion. Each Competitive Bid must be submitted to the Company before
10:00 a.m. (New York City time) (A) three Business Days prior to the date of the
proposed Bid Borrowing, in the case of a request for Base Rate Bid Loans, and
(B) one Business Day prior to the date of the proposed Bid Borrowing (or, in the
event the Company desires that Competitive Bids be furnished on the date of the
proposed Bid Borrowing, on the date of such proposed Borrowing), in the case of
a request for Fixed Rate Bid Loans.

              (ii) Each Competitive Bid (which shall be by telephone, promptly
         confirmed in writing) shall specify:

                                      -17
<PAGE>

                   (A) the minimum amount of each Bid Loan for which such
              Competitive Bid is being made (which shall be at least $5,000,000)
              and the maximum amount thereof (which may exceed such Lender's
              Tranche A Commitment or its Tranche B Commitment);

                   (B) the rate or rates of interest per annum offered for each
              Bid Loan, which, in the case of a Base Rate Bid Loan, shall be
              expressed as a margin to be added to, or subtracted from, the Base
              Rate specified by the Company in its Bid Request; and

                   (C) the applicable Lending Office of the quoting Lender.

              (iii) Any Competitive Bid may be disregarded if it:

                   (A) does not specify all of the information required by
              Section 2.04(b)(ii);

                   (B) contains qualifying, conditional or similar language;

                   (C) proposes terms other than, or in addition to, those set
              forth in the applicable Competitive Bid Request; or

                   (D) arrives after the time set forth in Section 2.04(b)(i).

         (c) Not later than 11:00 a.m. (New York City time) three Business Days
prior to the date of the proposed Bid Borrowing, in the case of a Borrowing of
Base Rate Bid Loans, and 11:00 a.m. (New York City time) one Business Day prior
to the date of the proposed Bid Borrowing (or, in the event the Company desires
that Competitive Bids be furnished on the date of the proposed Bid Borrowing, on
the date of such proposed Borrowing), in the case of a Borrowing of Fixed Rate
Bid Loans, the Company shall either

              (i) cancel such Bid Borrowing by giving the Agent and the Lenders
         notice thereof (which notice may be given by telephone and confirmed in
         writing by facsimile) or

              (ii) accept one or more of the offers made by any Lender or
         Lenders pursuant to Section 2.04(b), in its sole discretion, by giving
         notice (which notice may be given by telephone, confirmed in writing by
         facsimile) to such Lenders of the amount of each Bid Loan (which amount
         shall be equal to or greater than the minimum amount, and equal to or
         less than the maximum amount, notified to the Company by such Lender
         for such Bid Loan pursuant to Section 2.04(b)) to be made by each such
         Lender as part of such Bid Borrowing, and reject any remaining offers
         made by giving the Lenders notice (which notice may be given by
         telephone, confirmed in writing by facsimile) to that effect; provided,
         however, that to the extent that the Company elects to accept one or
         more Competitive Bids submitted by Lenders for a given Interest Period,
         the Company shall accept such Competitive Bids on the basis of
         ascending interest rates; and, provided, further, that in the event the
         Company does not, before the time stated above, either cancel the
         proposed Bid Borrowing pursuant to Section 2.04(c)(i) or accept one or
         more of the offers pursuant to this Section 2.04(c)(ii), such Bid
         Borrowing shall be deemed cancelled and provided, further, that in the
         event the Company accepts one or more of the offers pursuant to this
         Section 2.04(c)(ii) but does not expressly reject the remaining offers,
         such offers shall be deemed rejected. The Company shall promptly notify
         the Agent of the date and amount of any proposed Bid Borrowing.

                                      -18
<PAGE>

         (d) For purposes of Sections 2.01, 2.06 and 4.01(a), each outstanding
Bid Loan (and until repayment in full thereof, each 1996 Facility Bid Loan)
shall be deemed to utilize the Tranche A Commitments of each Lender, in the case
of Tranche A Bid Loans, or the Tranche B Commitments of each Lender, in the case
of Tranche B Bid Loans, whether or not such Lender has made such Bid Loan, by an
amount equal to such Lender's Commitment Percentage times the amount of such Bid
Loan (or 1996 Facility Bid Loan).

         (e) The rights of any Lender under the 1996 Credit Agreement which is
also a Lender under this Agreement and which has made 1996 Facility Bid Loans
that are outstanding on the Closing Date shall terminate on the Closing Date and
such Lender shall have the same rights with respect to its 1996 Facility Bid
Loans as if such 1996 Facility Bid Loans were Bid Loans hereunder.

         2.05 Evidence of Indebtedness.

         (a) Each Lender, with respect to amounts payable to it hereunder, and
the Agent, with respect to all amounts payable hereunder in respect of Committed
Borrowings, shall maintain on its books in accordance with its usual practice,
loan accounts and control accounts, respectively, setting forth each Committed
Loan and, in the case of each Lender having made a Bid Loan, each such Bid Loan,
the applicable interest rate and the amounts of principal, interest and other
sums paid and payable by the Company from time to time hereunder with respect
thereto; provided, however, that the failure by any Lender to record any such
amount on its books shall not affect the obligations of the Company with respect
thereto. In the case of any dispute, action or proceeding relating to any amount
payable hereunder, the entries in each such account shall be prima facie
evidence of such amount, absent manifest error. In case of any discrepancy
between the entries in the Agent's books and any Lender's books, such Lender's
books shall be considered correct in the absence of manifest error.

         (b) Notwithstanding the foregoing, if any Lender shall so request for
purposes of Section 12.08(a)(iii), the obligation to repay the Committed Loans
shall also be evidenced by a promissory note in the form of Exhibit 2.05(b).

         (c) The obligation to repay a Bid Loan shall also, if so requested by
the Lender making such Bid Loan in its Competitive Bid, be evidenced by a
promissory note in the form of Exhibit 2.05(c).

         2.06 Optional Reduction of the Commitments. The Company shall have the
right, upon at least four Business Days' prior notice to the Agent (which notice
shall be irrevocable), at any time permanently to terminate the remaining
Commitments in whole or reduce ratably in part the unused portions of the
Commitments of the Lenders, allocated between Tranche A Commitments or Tranche B
Commitments, as the Company may elect; provided, however, that each partial
reduction shall be in the aggregate amount of $20,000,000 or an integral
multiple of $10,000,000 in excess thereof. No reduction in the Commitments shall
reduce the L/C Commitment until the aggregate Commitments are reduced to
$150,000,000, after which each reduction in the Commitments shall reduce the L/C
Commitment dollar for dollar. The Agent shall promptly notify each Lender of its
receipt of any notice under this Section 2.06.

         2.07 Repayment.

         (a) The Committed Loans. The Company agrees to repay to the Agent for
the account of the Lenders the outstanding principal amount of all Tranche A
Loans on the Tranche A Termination Date.

                                      -19
<PAGE>

The Company agrees to repay to the Agent for the account of the Lenders the
outstanding principal amount of all Tranche B Loans on the Tranche B Termination
Date.

         (b) The Bid Loans. The Company agrees to repay to each Lender which has
made a Bid Loan on the maturity date of such Bid Loan (as each such maturity
date shall have been specified by the Company in the applicable Competitive Bid
Request pursuant to Section 2.04(a)(iii)) the unpaid principal amount of such
Bid Loan then due and payable (each such amount being as specified for such date
in such Competitive Bid Request pursuant to Section 2.04(a)(iii)).

         2.08 Optional Prepayments.

         (a) Subject to Section 5.06(a), the Company may, upon (i) at least four
Business Days' prior notice to the Agent, in the case of a prepayment of
Eurodollar Loans, and (ii) at least one Business Day's prior notice to the
Agent, in the case of a prepayment of Reference Rate Loans, stating the proposed
date and aggregate principal amount of the prepayment, prepay, ratably among the
Lenders in accordance with their Commitment Percentages, the outstanding
principal amount of the Committed Loans, in whole or in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid.

         (b) Each partial prepayment of Committed Loans shall, in the case of
Eurodollar Loans, be in the aggregate principal amount of $20,000,000 or an
integral multiple of $10,000,000 in excess thereof, and, in the case of
Reference Rate Loans, be in the aggregate principal amount of $10,000,000 or an
integral multiple of $5,000,000 in excess thereof; provided, however, that, if
the aggregate amount of Eurodollar Loans comprised in the same Committed
Borrowing would be reduced as a result of any voluntary prepayment to an amount
less than $20,000,000, such Eurodollar Loans shall automatically convert into
Reference Rate Loans on the last day of the then current Interest Period.

         (c) If a notice of prepayment is given, such notice shall be
irrevocable and the principal amount stated in such notice, together with
accrued interest thereon and any amount payable pursuant to Section 5.06(a),
shall be due and payable on the date specified in such notice. The Agent shall
promptly notify each Lender of its receipt of any notice of prepayment under
this Section 2.08.

         (d) Bid Loans may not be prepaid.

         2.09 Interest.

         (a) Each Committed Loan shall bear interest on the outstanding
principal amount thereof from the date when made until paid in full, at the
option of the Company, as set forth in its Notice of Borrowing or in its Notice
of Conversion/Continuation,

              (i) if such Loan is a Reference Rate Loan, at a rate per annum
         equal to the Adjusted Reference Rate; or

              (ii) if such Loan is a Eurodollar Loan, at a rate per annum equal
         to the sum of (A) LIBOR plus (B) the applicable margin, as follows:

                                      -20
<PAGE>
<TABLE>
<CAPTION>
                           Debt Rating                                    Applicable Margin
                           -----------                                   on Eurodollar Loans
         Moody's                            S&P                  Tranche A Loans / Tranche B Loans
         -------                            ---                  ---------------------------------
      <S>                       <C>      <C>                        <C>
         Baal or higher            or       BBB+ or higher                0.525% / 0.500%
                                   --
         Baa2                      or       BBB                           0.625% / 0.600%
                                   --
         Baa3                      or       BBB-                          0.725% / 0.700%
                                   --
         Bal                       or       BB+                           1.075% / 1.050%
                                   --
         Ba2 or lower              and      BB or lower                   1.275% / 1.250%
                                   ---
</TABLE>
provided, however, that if at any time no Debt Rating is available, the
applicable margin shall be 1.275% per annum for Tranche A Loans and 1.250% per
annum for Tranche B Loans.

         (b) Any change in the applicable margin due to a change in the
applicable Debt Rating shall be effective on the effective date of such change
in the applicable Debt Rating and shall apply to all Eurodollar Loans that are
outstanding at any time during the period commencing on the effective date of
such change in applicable Debt Rating and ending on the date immediately
preceding the effective date of the next such change in applicable Debt Rating.
In the event of a split rating, the higher rating will apply; if the Debt
Ratings are split by more than one level, one level above the lower rating will
apply.

         (c) Accrued interest shall be paid on each Interest Payment Date (and,
after maturity, on demand), on the date of repayment or prepayment of any
Committed Loan on the amount repaid or prepaid and, in the case of any Reference
Rate Loan, on each date such Loan is converted into a Eurodollar Loan.

         (d) The Company shall pay to each Lender which has made a Bid Loan
interest on the unpaid principal amount of such Bid Loan from the date when made
until paid in full, on each Interest Payment Date (and, after maturity, on
demand), at the rate of interest specified by such Lender in its Competitive Bid
pursuant to Section 2.04(b)(ii)(B).

         2.10 Default Interest. During the continuation of any Event of Default
pursuant to Section 10.01(a), the Company shall pay interest (after as well as
before judgment to the extent permitted by law) on the principal amount of all
Committed Loans outstanding and on all other Obligations of the Company due and
unpaid (other than Bid Loans), at a rate per annum which is determined by
increasing the interest rate then in effect by 2% per annum for the principal
amount of the Eurodollar Loans outstanding and at a rate per annum equal to the
Adjusted Reference Rate plus 2% for any other Obligation due hereunder (other
than Bid Loans).

         2.11 Continuation and Conversion Elections for Committed Loans.

         (a) The Company may upon irrevocable written notice to the Agent:

              (i) elect to convert, on any Business Day, all or any portion of
         outstanding Reference Rate Loans (in the aggregate amount of
         $20,000,000 or an integral multiple of $10,000,000 in excess thereof)
         into Eurodollar Loans;

              (ii) elect to convert, on the last day of any Interest Period
         therefor, all or any portion of outstanding Eurodollar Loans comprising
         the same Borrowing (in the aggregate amount of $10,000,000 or an
         integral multiple of $5,000,000 in excess thereof) into Reference Rate
         Loans; or

              (iii) elect to continue, on the last day of any Interest Period
         therefor, any Eurodollar Loans;

                                      -21
<PAGE>

provided, however, that if the aggregate amount of outstanding Eurodollar Loans
comprised in the same Borrowing would be reduced as a result of any conversion
of part thereof to Reference Rate Loans to an amount less than $20,000,000, such
Eurodollar Loans shall automatically convert into Reference Rate Loans on the
last day of the Interest Period on which such conversion occurs.

         (b) The Company shall deliver a notice of conversion or continuation (a
"Notice of Conversion/Continuation"), in substantially the form of Exhibit
2.11(b), to the Agent not later than 12:00 noon (New York City time) (i) four
Business Days prior to the proposed date of conversion or continuation, if the
Committed Loans or any portion thereof are to be converted into or continued as
Eurodollar Loans, and (ii) one Business Day prior to the proposed date of
conversion, if the Committed Loans or any portion thereof are to be converted
into Reference Rate Loans.

Each such Notice of Conversion/Continuation shall be irrevocable and shall be
made by facsimile, specifying therein:

              (i) the proposed date of conversion or continuation;

              (ii) the aggregate amount of Committed Loans to be converted or
         continued;

              (iii) whether such Committed Loans are Tranche A Loans or Tranche
         B Loans; and

              (iv) the duration of the applicable Interest Period if such
         Committed Loans are Eurodollar Loans.

         (c) If, on the fourth Business Day prior to the expiration of any
Interest Period applicable to Eurodollar Loans, the Company shall have failed to
select a new Interest Period to be applicable to such Eurodollar Loans, the
Company shall be deemed to have elected to convert such Eurodollar Loans into
Reference Rate Loans effective as of the last day of such Interest Period.

         (d) Upon receipt of a Notice of Conversion/Continuation, the Agent
shall promptly notify each Lender thereof. All conversions and continuations
shall be made ratably among the Lenders based on their Commitment Percentages of
the Committed Loans with respect to which such notice was given.

         (e) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Committed Loans,
there shall not be more than seven different Interest Periods for Committed
Loans in effect.

         2.12 Termination of Prior Commitments. The Company and each of the
Lenders agree that the "Commitments" (as defined in the 1996 Credit Agreement)
will terminate as of the Closing Date, and each Lender waives the notice
requirement set forth in Section 2.08(a) of the 1996 Credit Agreement regarding
such termination.

                                   ARTICLE 3
                              THE LETTERS OF CREDIT

         3.01 The Letter of Credit Subfacility.

              (a) On the terms and conditions set forth herein (i) the Issuing
Bank agrees, (A) from time to time on any Business Day during the period from
the Closing Date to the Tranche A Termination

                                      -22
<PAGE>

Date to issue Tranche A Letters of Credit for the account of the Company, and to
amend or renew Tranche A Letters of Credit previously issued by it, in
accordance with subsections 3.02(c) and 3.02(d), (B) from time to time on any
Business Day during the period from the Closing Date to the Tranche B
Termination Date to issue Tranche B Letters of Credit for the account of the
Company, and to amend or renew Tranche B Letters of Credit previously issued by
it, in accordance with subsections 3.02(c) and 3.02(d), and (C) to honor drafts
under the Letters of Credit; and (ii) the Lenders severally agree to purchase an
irrevocable and unconditional participation in each Letter of Credit Issued for
the account of the Company; provided, that the Issuing Bank shall not be
obligated to Issue, and no Lender shall be obligated to participate in, any
Letter of Credit if as of the date of Issuance of such Letter of Credit (the
"Issuance Date"), after giving effect to any requested Loans, (A) (1) the
aggregate principal amount of all Tranche A Loans then outstanding plus (2) the
aggregate principal amount of all Tranche A Bid Loans then outstanding plus (3)
the outstanding Tranche A L/C Obligations exceeds the Aggregate Tranche A
Commitments; (B) (1) the aggregate principal amount of all Tranche B Loans then
outstanding plus (2) the aggregate principal amount of all Tranche B Bid Loans
then outstanding plus (3) the aggregate principal amount of all 1996 Facility
Bid Loans then outstanding plus (4) the outstanding Tranche B L/C Obligations
exceeds the Aggregate Tranche B Commitments; or (C) the total amount of L/C
Obligations exceeds the L/C Commitment. Within the foregoing limits, and subject
to the other terms and conditions hereof, the Company's ability to obtain
Letters of Credit shall be fully revolving, and, accordingly, the Company may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and reimbursed.

         (b) The Issuing Bank is under no obligation to Issue any Letter of
Credit if:

              (i) any order, judgment or decree of any Governmental Authority or
         arbitrator shall by its terms purport to enjoin or restrain the Issuing
         Bank from Issuing such Letter of Credit, or any Requirement of Law
         applicable to the Issuing Bank or any request or directive (whether or
         not having the force of law) from any Governmental Authority with
         jurisdiction over the Issuing Bank shall prohibit, or request that the
         Issuing Bank refrain from, the Issuance of letters of credit generally
         or such Letter of Credit in particular or shall impose upon the Issuing
         Bank with respect to such Letter of Credit any restriction, reserve or
         capital requirement (for which the Issuing Bank is not otherwise
         compensated hereunder) not in effect on the Closing Date, or shall
         impose upon the Issuing Bank any unreimbursed loss, cost or expense
         which was not applicable on the Closing Date and which the Issuing Bank
         in good faith deems material to it;

              (ii) the Issuing Bank has received written notice from any Lender,
         the Agent or the Company, on or prior to the Business Day prior to the
         requested date of Issuance of such Letter of Credit, that one or more
         of the applicable conditions contained in Article 7 is not then
         satisfied;

              (iii) the expiry date of any requested Letter of Credit is (A)
         more than one year after the date of Issuance, unless the Required
         Lenders have approved such expiry date in writing, (B) after the
         Tranche A Termination Date, in the case of a Tranche A Letter of
         Credit, unless all of the Lenders have approved such expiry date in
         writing, or (C) after the Tranche B Termination Date, in the case of a
         Tranche B Letter of Credit, unless all of the Lenders have approved
         such expiry date in writing;

              (iv) the expiry date of any requested Letter of Credit is prior to
         the maturity date of any financial obligation to be supported by the
         requested Letter of Credit;

                                      -23
<PAGE>

              (v) any requested Letter of Credit does not provide for drafts, or
         is not otherwise in form and substance acceptable to the Issuing Bank,
         or the Issuance of a Letter of Credit shall violate any applicable
         policies of the Issuing Bank;

              (vi) any standby Letter of Credit is for the purpose of supporting
         the Issuance of any Letter of Credit by any other Person; or

              (vii) such Letter of Credit is in a face amount less than $100,000
         or is denominated in a currency other than dollars.

         3.02 Issuance, Amendment and Renewal of Letters of Credit.

         (a) Each Letter of Credit shall be issued upon the irrevocable written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the Agent) at least four days (or such shorter time as the Issuing
Bank may agree in a particular instance in its sole discretion) prior to the
proposed date of issuance. Each such request for issuance of a Letter of Credit
shall be by facsimile, confirmed immediately in an original writing, in the form
of an L/C Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the proposed date of issuance of the Letter of Credit (which
shall be a Business Day); (ii) the face amount of the Letter of Credit; (iii)
the expiry date of the Letter of Credit; (iv) the name and address of the
beneficiary thereof; (v) the documents to be presented by the beneficiary of the
Letter of Credit in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; (vii) whether such Letter of Credit should be allocated to the
Tranche A Commitments or the Tranche B Commitments; and (viii) such other
matters as the Issuing Bank may require.

         (b) At least two Business Days prior to the Issuance of any Letter of
Credit, the Issuing Bank will confirm with the Agent (by telephone or in
writing) that the Agent has received a copy of the L/C Application or L/C
Amendment Application from the Company and, if not, the Issuing Bank will
provide the Agent with a copy thereof. Unless the Issuing Bank has received
notice on or before the Business Day immediately preceding the date the Issuing
Bank is to issue a requested Letter of Credit from the Agent (i) directing the
Issuing Bank not to issue such Letter of Credit because such issuance is not
then permitted under subsection 3.01(b)(iii) as a result of the limitations set
forth in clauses (A) through (B) thereof or subsection 3.01(b)(ii); or (ii) that
one or more conditions specified in Article 7 are not then satisfied; then,
subject to the terms and conditions hereof, the Issuing Bank shall, on the
requested date, issue a Letter of Credit for the account of the Company in
accordance with the Issuing Bank's usual and customary business practices.

         (c) From time to time while a Letter of Credit is outstanding and prior
to the Tranche A Termination Date (in the case of Tranche A Letters of Credit)
or the Tranche B Termination Date (in the case of Tranche B Letters of Credit),
the Issuing Bank will, upon the written request of the Company received by the
Issuing Bank (with a copy sent by the Company to the Agent) at least five days
(or such shorter time as the Issuing Bank may agree in a particular instance in
its sole discretion) prior to the proposed date of amendment, amend any Letter
of Credit issued by it. Each such request for amendment of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original writing, made
in the form of an L/C Amendment Application and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be amended; (ii)
the proposed date of amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed amendment; and (iv) such other
matters as the Issuing Bank may require. The Issuing Bank shall be under no
obligation to amend any Letter of Credit if: (A) the Issuing Bank would have no
obligation at such time to issue such Letter of Credit in its

                                      -24
<PAGE>

amended form under the terms of this Agreement; or (B) the beneficiary of any
such letter of Credit does not accept the proposed amendment to the Letter of
Credit. The Agent will promptly notify the Banks of the receipt by it of any L/C
Application or L/C Amendment Application.

         (d) The Issuing Bank and the Lenders agree that, while a Letter of
Credit is outstanding and prior to the Tranche A Termination Date (in the case
of Tranche A Letters of Credit) or the Tranche B Termination Date (in the case
of Tranche B Letters of Credit), at the option of the Company and upon the
written request of the Company received by the Issuing Bank (with a copy sent by
the Company to the Agent) at least five days (or such shorter time as the
Issuing Bank may agree in a particular instance in its sole discretion) prior to
the proposed date of notification of renewal, the Issuing Bank shall be entitled
to authorize the renewal of any Letter of Credit issued by it. Each such request
for renewal of a Letter of Credit shall be made by facsimile, confirmed
immediately in an original writing, in the form of an L/C Amendment Application,
and shall specify in form and detail satisfactory to the Issuing Bank: (i) the
Letter of Credit to be renewed; (ii) the proposed date of notification of
renewal of the Letter of Credit (which shall be a Business Day); (iii) the
revised expiry date of the Letter of Credit; and (iv) such other matters as the
Issuing Bank may require. The Issuing Bank shall be under no obligation so to
renew any Letter of Credit if: (A) the Issuing Bank would have no obligation at
such time to issue or amend such Letter of Credit in its renewed form under the
terms of this Agreement; or (B) the beneficiary of any such Letter of Credit
does not accept the proposed renewal of the Letter of Credit. If any outstanding
Letter of Credit shall provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from the Issuing Bank that such Letter of
Credit shall not be renewed, and if at the time of renewal the Issuing Bank
would be entitled to authorize the automatic renewal of such Letter of Credit in
accordance with this subsection 3.02(d) upon the request of the Company but the
Issuing Bank shall not have received any L/C Amendment Application from the
Company with respect to such renewal or other written direction by the Company
with respect thereto, the Issuing Bank shall (unless such renewal would cause
the expiry date thereof to extend beyond the Tranche A Termination Date, in the
case of a Tranche A Letter of Credit, or the Tranche B Termination Date, in the
case of a Tranche B Letter of Credit) nonetheless be permitted to allow such
Letter of Credit to renew, and the Company and the Lenders hereby authorize such
renewal, and, accordingly, the Issuing Bank shall be deemed to have received an
L/C Amendment Application from the Company requesting such renewal.

         (e) The Issuing Bank may, at its election (or as required by the Agent
at the direction of the Required Lenders), deliver any notices of termination or
other communications to any Letter of Credit beneficiary or transferee, and take
any other action as necessary or appropriate, at any time and from time to time,
in order to cause the expiry date of such Letter of Credit to be a date not
later than the Tranche A Termination Date, in the case of a Tranche A Letter of
Credit, or in order to cause the expiry date of such Letter of Credit to be a
date not later than the Tranche B Termination Date, in the case of a Tranche B
Letter of Credit.

         (f) This Agreement shall control in the event of any conflict with any
L/C-Related Document (other than any Letter of Credit).

         (g) The Issuing Bank will also deliver to the Agent, concurrently or
promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and
complete copy of each such Letter of Credit or amendment to or renewal of a
Letter of Credit.

                                      -25
<PAGE>

         3.03 Role of the Issuing Bank.

         (a) Each Lender and the Company agree that, in paying any drawing under
a Letter of Credit, the Issuing Bank shall not have any responsibility to obtain
any document (other than any sight draft and certificates expressly required by
the Letter of Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or delivering any
such document.

         (b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Issuing Bank shall be liable to any Lender for:
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders (including the Required Lenders, as applicable);
(ii) any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.

         (c) The Company hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Company's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in subsections 3.04(a) through (g); provided, however,
anything in such clauses to the contrary notwithstanding, that the Company may
have a claim against the Issuing Bank, and the Issuing Bank may be liable to the
Company, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Company which the Company
proves were caused by the Issuing Bank's willful misconduct or gross negligence
or the Issuing Bank's willful failure to pay under any Letter of Credit after
the presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

         3.04 Obligations Absolute. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:

         (a) any lack of validity or enforceability of this Agreement or any
L/C-Related Document;

         (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Company in respect of any
Letter of Credit or any other amendment or waiver of or any consent to departure
from all or any of the L/C-Related Documents;

         (c) the existence of any claim, set-off, defense or other right that
the Company may have at any time against any beneficiary or any transferee of
any Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by the
L/C-Related Documents or any unrelated transaction;

                                      -26
<PAGE>

         (d) any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit;

         (e) any payment by the Issuing Bank under any Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of any Letter of Credit; or any payment made by the Issuing Bank under any
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in connection with any
Insolvency Proceeding;

         (f) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the obligations of the Company in respect of any
Letter of Credit; or

         (g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Company or a
guarantor.

         3.05 Cash Collateral Pledge. Upon the request of the Agent or the
Required Lenders, (a) if the Issuing Bank has honored any full or partial
drawing request on any Letter of Credit and such drawing has resulted in an L/C
Borrowing hereunder, (b) if, as of the Tranche A Termination Date, any Tranche A
Letters of Credit may for any reason remain outstanding and partially or wholly
undrawn, or (c) if, as of the Tranche B Termination Date, any Tranche B Letters
of Credit may for any reason remain outstanding and partially or wholly undrawn,
then, the Company shall immediately Cash Collateralize the L/C Obligations in an
amount equal to such L/C Obligations.

         3.06 Letter of Credit Fees.

         (a) The Company shall pay to the Agent for the account of each of the
Lenders a letter of credit fee with respect to the Tranche A Letters of Credit
equal to the applicable margin above LIBOR then in effect under Section 2.09 for
Tranche A Eurodollar Loans for each day such Tranche A Letters of Credit are
outstanding, computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter and based upon Tranche A Letters of Credit outstanding
for that quarter as calculated by the Agent. The Company shall pay to the Agent
for the account of each of the Lenders a letter of credit fee with respect to
the Tranche B Letters of Credit equal to the applicable margin above LIBOR then
in effect under Section 2.09 for Tranche B Eurodollar Loans for each day such
Tranche B Letters of Credit are outstanding, computed on a quarterly basis in
arrears on the last Business Day of each calendar quarter and based upon Tranche
B Letters of Credit outstanding for that quarter as calculated by the Agent.
Such letter of credit fees shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter during which Letters of Credit are
outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Tranche B Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final payment to
be made on the Tranche A Termination Date (or such later expiration date), in
the case of Tranche A Letters of Credit and on the Tranche B Termination Date
(or such later expiration date), in the case of Tranche B Letters of Credit.

         (b) The Company shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit Issued by the Issuing Bank equal to
0.125% of the face amount (or increased face amount, as the

                                      -27
<PAGE>

case may be) of such Letter of Credit. Such Letter of Credit fronting fee shall
be due and payable on each date of Issuance of a Letter of Credit.

         (c) The Company shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the Issuing Bank relating to standby
letters of credit as from time to time in effect.

         3.07 International Standby Practices. The International Standby
Practices as published by the International Chamber of Commerce most recently at
the time of issuance of any Letter of Credit shall (unless otherwise expressly
provided in the Letters of Credit) apply to the Letters of Credit.

                                   ARTICLE 4
                              FEES; PAYMENTS; TAXES

         4.01 Fees.

         (a) Utilization Fee. The Company shall pay to the Agent for the account
of each Lender a utilization fee ("Utilization Fee") on the actual daily
aggregate principal amount of such Lender's Committed Loans then outstanding
hereunder with respect to each day on which the principal amount of all
Committed Loans then outstanding is equal to or exceeds 33% of the aggregate
Commitments (each such day a "Utilization Fee Day"). Such fee shall be computed
with respect to each Utilization Fee Day at a rate equal to 0.125% per annum,
and shall accrue with respect to each Utilization Fee Day occurring on and after
the Closing Date to the later to occur of (A) the Tranche B Termination Date and
(B) the date on which all Loans and interest thereon are paid in full and the
Commitments hereunder terminated, and, to the extent accrued during such period,
shall be due and payable quarterly in arrears on the last Business Day of each
calendar quarter (commencing on September 30, 1999) through the later to occur
of (X) the Tranche B Termination Date and (Y) the date on which all Loans, L/C
Obligations and interest thereon are paid in full and the Commitments hereunder
terminated, with the final payment to be made on the latest to occur of such
dates.

         (b) Facility Fee.

              (i) The Company agrees to pay to the Agent for the account of each
         Lender, a facility fee from the Closing Date until the Tranche B
         Termination Date at a rate per annum times the Tranche A Commitment and
         the Tranche B Commitment of such Lender (regardless of utilization
         thereof) as follows:

                          Debt Rating                       Facility Fee
                          -----------                       ------------
         Moody's                    S&P               Tranche A / Tranche B
         -------                    ---               ---------------------
         Baal or higher    or       BBB+ or higher       0.100% / 0.125%
                           --
         Baa2              or       BBB                  0.125% / 0.150%
                           --
         Baa3              or       BBB-                 0.150% / 0.175%
                           --
         Bal               or       BB+                  0.175% / 0.200%
                           --
         Ba2 or lower      and      BB or lower          0.225% / 0.250%
                           ---

         provided, however, that if at any time no Debt Rating is available, the
         facility fee shall be 0.225% per annum for Tranche A Commitments and
         0.250% per annum for Tranche B Commitments. In

                                      -28
<PAGE>

         the event of a split rating, the higher rating will apply; if the Debt
         Ratings are split by more than one level, one level above the lower
         rating will apply.

              (ii) The facility fee shall be payable (A) quarterly in arrears on
         the last Business Day of each calendar quarter, commencing with the
         calendar quarter ending on September 30, 1999, (B) on any date of
         reduction or termination of the Commitments and (C) on the Tranche B
         Termination Date.

         (c) Agency Fee. The Company agrees to pay to the Agent for its account
an agency fee in such amounts and at such times as are set forth in the Fee
Letter.

         4.02 Computation of Interest, Fees.

         (a) All computations of interest payable in respect of Reference Rate
Loans shall be made on the basis of a year of 365 days or 366 days, as the case
may be, and actual days elapsed. All computations of interest in respect of
Eurodollar Loans and Bid Loans and all computations of fees under this Agreement
shall be made on the basis of a year of 360 days and actual days elapsed.
Interest and fees shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day thereof.

         (b) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Company and
the Lenders in the absence of manifest error. The Agent, upon determining LIBOR
for any Interest Period, shall promptly notify the Company and the Lenders
thereof.

         4.03 Payments by the Company.

         (a) The Company shall make each payment hereunder not later than 1:00
p.m. (New York City time) on the day when due (i) in respect of any Committed
Loan, to the Agent or (ii) in respect of any Bid Loan, to the Lender which made
such Bid Loan, without defense, setoff or counterclaim, in dollars and in
immediately available funds to such account in the continental United States of
America as the Agent shall specify from time to time by notice to the Company
or, in the case of a Bid Loan made by a Lender, to the Lending Office of such
Lender. The Agent will promptly after receiving any payment in respect of any
Committed Loan from the Company cause to be distributed like funds to the
Lenders ratably based on their Commitment Percentages (other than amounts
payable to any Lender or any amounts payable pursuant to Section 3.05, 4.02,
4.03, 4.04, 4.05 or 4.06) for the account of their respective Lending Offices.
Any payment which is received by the Agent later than 1:00 p.m. (New York City
time), as confirmed by Federal Reserve wire number, shall be deemed to have been
received on the immediately succeeding Business Day.

         (b) Whenever any payment of a Committed Loan (and, unless otherwise
stated in the relevant Competitive Bid Request, a Bid Loan) shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of principal of or
interest on Eurodollar Loans to be made in the next calendar month, such payment
shall be made on the immediately preceding Business Day.

                                      -29
<PAGE>

         (c) Unless the Agent shall have received notice from the Company prior
to the date on which any payment is due to the Lenders hereunder that the
Company will not make such payment in full, the Agent may assume that the
Company has made such payment in full to the Agent on such date, and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Company shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand the excess of the
amount distributed to such Lender over the amount, if any, paid by the Company
for the account of such Lender, together with interest thereon at the Federal
Funds Rate, for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Agent; provided, however,
that if any Lender shall fail to repay such amount within three Business Days
after demand therefor, such Lender shall, from and after such third Business Day
until payment is made to the Agent, pay interest thereon at a rate per annum
equal to the sum of the Adjusted Reference Rate plus 1%.

         4.04 Payments by the Lenders.

         (a) Not later than 12:00 noon (New York City time) on the date of each
proposed Committed Borrowing, each Lender shall make available to the Agent to
such account as the Agent shall specify from time to time in immediately
available funds for the account of the Company, the amount of such Lender's
Commitment Percentage of such Borrowing.

         (b) Unless the Agent shall have received notice from a Lender at least
one Business Day prior to the date of any proposed Committed Borrowing that such
Lender will not make available to the Agent for the account of the Company, the
amount of such Lender's Commitment Percentage of such Borrowing, the Agent may
assume that such Lender has made such amount available to the Agent on the date
of such Borrowing, and the Agent may, in reliance upon such assumption, make
available to the Company on such date a corresponding amount. If and to the
extent any Lender shall not have made such full amount available to the Agent,
and the Agent in such circumstances makes available to the Company such amount,
such Lender shall, within two Business Days following the date of such
Borrowing, make such amount available to the Agent, together with interest
thereon for each day from and including the date of such Borrowing, at a rate
per annum equal to the Federal Funds Rate. If such amount is so made available,
such payment to the Agent shall constitute such Lender's Committed Loan on the
date of such Borrowing for all purposes of this Agreement. If such amount is not
made available to the Agent within two Business Days following the date of such
Borrowing, the Agent shall notify the Company of such failure to fund, and, on
the third Business Day following the date of such Borrowing, the Company shall
pay to the Agent such amount, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
Nothing contained in this Section 4.04(b) shall relieve any Lender which has
failed to make available its Commitment Percentage of any Committed Borrowing
hereunder from its obligation to do so in accordance with the terms hereof.

         (c) The failure of any Lender to make any Committed Loan on the date of
any Committed Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make a Committed Loan on the date of such Borrowing pursuant
to the provisions contained herein, but no Lender shall be responsible for the
failure of any other Lender to make the Loan to be made by such other Lender on
the date of any Committed Borrowing.

         (d) If the Company accepts one or more of the offers made by any Lender
or Lenders pursuant to Section 2.04(c)(ii), each such Lender which is to make a
Bid Loan as part of any Bid

                                      -30
<PAGE>

Borrowing shall before 12:00 noon (New York City time) on the date of such
proposed Bid Borrowing (or before 2:00 p.m. (New York City time) on the date of
such Bid Borrowing in the case of a Fixed Rate Bid Loan) make available to the
Company at such Lender's Lending Office such Lender's portion of such Bid
Borrowing in immediately available funds. The Company will promptly notify the
Agent of the total amount of Bid Loans made in connection with such Bid
Borrowing, each date on which all or any part of such Bid Loans shall mature and
the principal amount which shall mature on each such date, and the Agent will,
in turn, promptly notify each Lender of the amount of such Bid Borrowing and the
relevant maturity date or dates of the Bid Loans comprised in such Bid
Borrowing.

         4.05 Taxes.

         (a) Subject to Section 4.05(g), any and all payments by the Company to
the Agent for its account and for the account of any Lender under this Agreement
(other than on account of a Bid Loan, except to the extent otherwise specified
as being applicable to any such Bid Loan) shall be made free and clear of, and
without deduction or withholding for, any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto incurred in connection with any Borrowing pursuant to this
Agreement, excluding (i) such taxes (including income taxes or franchise taxes
or branch profit taxes) as are imposed on or measured by such Lender's or the
Agent's, as the case may be, net income and (ii) such taxes as are imposed by a
jurisdiction other than the United States of America or any political
subdivision thereof and that would not have been imposed but for the existence
of a connection between such Lender or the Agent and the jurisdiction imposing
such taxes (other than a connection arising principally by reason of this
Agreement) (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes").

         (b) In addition, the Company agrees to pay any present or future stamp
or documentary taxes or any other sales, excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement (other than on account of a Bid Loan, except to the extent otherwise
specified as being applicable to any such Bid Loan) or any other Loan Document
(hereinafter referred to as "Other Taxes").

         (c) Subject to Section 4.05(g), the Company agrees to indemnify and
hold harmless each Lender and the Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 4.05) paid by such Lender or the Agent, as the case
may be, and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted; provided, however, that each
Lender and the Agent agree to contest in good faith in cooperation with the
Company any Taxes or Other Taxes that such Lender or the Agent, as the case may
be, in consultation with the Company has determined have been incorrectly
asserted. This indemnification shall be made within 30 days from the date such
Lender or the Agent, as the case may be, makes written demand therefor.

         (d) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then, subject to Section 4.05(g),

              (i) the sum payable shall be increased as may be necessary so that
         after making all required deductions (including deductions applicable
         to additional sums payable under this Section 4.05), such Lender or the
         Agent, as the case may be, receives an amount equal to the sum it would
         have received had no such deductions been made;

                                      -31
<PAGE>

              (ii) the Company shall make such deductions; and

              (iii) the Company shall pay the full amount deducted to the
         relevant taxation authority or other authority in accordance with
         applicable law.

         (e) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes under this Section 4.05, the Company will furnish to the
Agent, for the account of each Lender receiving a payment from which Taxes or
Other Taxes were deducted, the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment reasonably satisfactory
to the Agent.

         (f) Each Lender that is other than a United States Person as defined in
the Code hereby agrees that:

              (i) it shall, no later than the Closing Date (or, in the case of a
         Lender which becomes a party hereto pursuant to Section 12.08 after the
         Closing Date, the date upon which such Lender becomes a party hereto)
         deliver to the Agent (two (2) originals) and to the Company (one (1)
         original):

                           (A) if its Lending Office is located in the United
                  States of America, accurate and complete signed originals of
                  Internal Revenue Service Form 4224 or any successor thereto
                  ("Form 4224") and Internal Revenue Service Form W-9 or any
                  successor thereto ("Form W-9"), and/or

                           (B) if its Lending Office is located outside the
                  United States of America, accurate and complete signed
                  originals of Internal Revenue Service Form 1001 or any
                  successor thereto ("Form 1001") and Internal Revenue Service
                  Form W-8 or any successor thereto ("Form W-8");

         in each case indicating that such Lender is on the date of delivery
         thereof entitled to receive payments of principal, interest and fees
         for the account of such Lending Office or Offices under this Agreement
         free from withholding of United States Federal income tax;

              (ii) if at any time such Lender changes its Lending Office or
         Offices or selects an additional Lending Office, it shall, at the same
         time or reasonably promptly thereafter but only to the extent the forms
         previously delivered by it hereunder are no longer effective, deliver
         to the Agent (two originals) and to the Company (one original) in
         replacement for the forms previously delivered by it hereunder:

                   (A) if such changed or additional Lending Office is located
              in the United States of America, accurate and complete signed
              originals of Form 4224 and Form W-9; or

                   (B) otherwise, accurate and complete signed originals of Form
              1001 and Form W-8,

         in each case indicating that such Lender is on the date of delivery
         thereof entitled to receive payments of principal, interest and fees
         for the account of such changed or additional Lending Office under this
         Agreement free from withholding of United States Federal income tax;

                                      -32
<PAGE>

              (iii) it shall, before or promptly after the occurrence of any
         event (including the passing of time and, as provided above, any event
         mentioned in clause (ii)) requiring a change in the most recent Form
         4224, Form W-9, Form 1001 or Form W-8 previously delivered by such
         Lender and if no change in law shall have occurred since the date of
         delivery of such most recent form that would make the delivery of
         replacement forms hereunder unlawful, deliver to the Agent (two
         originals) and to the Company (one original) accurate and complete
         signed originals of Form 4224 and Form W-9 or Form 1001 and Form W-8
         (or any successor forms) in replacement for the forms previously
         delivered by such Lender; and

              (iv) it shall, promptly upon the request of the Company to that
         effect, deliver to the Agent and the Company such other accurate and
         complete forms or similar documentation as may be required from time to
         time by any applicable law, treaty, rule or regulation in order to
         establish such Lender's tax status for withholding purposes or may
         otherwise be appropriate to eliminate or minimize any Taxes on payments
         under this Agreement.

         (g) The Company shall not be required to pay any amounts pursuant to
Section 4.05(a), 4.05(b), 4.05(d), or 4.05(i) to any Lender for the account of
any Lending Office of such Lender in respect of any sum payable hereunder:

              (i) if the obligation to pay such additional amounts would not
         have arisen but for a failure by such Lender to comply with its
         obligations under Section 4.05(f) in respect of such Lending Office;

              (ii) if such Lender shall have delivered to the Agent a Form 4224
         and a Form W-9 in respect of such Lending Office pursuant to Section
         4.05(f)(i)(A), 4.05(f)(ii)(A) or 4.05(f)(iii) and such Lender shall not
         be entitled to exemption from deduction or withholding of United States
         Federal income tax in respect of the payment of such sum by the Company
         hereunder for the account of such Lending Office for any reason other
         than a change in United States law or regulations or in the official
         interpretation of such law or regulations by any Governmental Authority
         charged with the interpretation or administration thereof (whether or
         not having the force of law) after the date of delivery of such Form
         4224 and Form W-9; provided, however, that if, notwithstanding such
         change in law, a Lender would be legally able to provide such other
         forms or information as would reduce or eliminate United States
         withholding taxes applicable to payments made hereunder, such Lender
         shall, if requested by the Company, timely provide such forms or other
         information to the Company, and the Company shall not be required to
         pay any amounts pursuant to Section 4.05(a), 4.05(c) or 4.05(d) to the
         extent such amount would not have been owed but for a failure of such
         Lender to comply with its obligations under this proviso; or

              (iii) if such Lender shall have delivered to the Company a Form
         1001 and a Form W-8 in respect of such Lending Office pursuant to
         Section 4.05(f)(i)(B), 4.05(f)(ii)(B) or 4.05(f)(iii) and such Lender
         shall not be entitled to exemption from deduction or withholding of
         United States Federal income tax in respect of the payment of such sum
         by the Company hereunder for the account of such Lending Office for any
         reason other than a change in United States law or regulations or any
         applicable tax treaty or regulations or in the official interpretation
         of any such law, treaty or regulations by any Governmental Authority
         charged with the interpretation or administration thereof (whether or
         not having the force of law) after the date of delivery of such Form
         1001 and Form W-8; provided, however, that if, notwithstanding such
         change in law, a Lender would be legally able to provide such other
         forms or information as would reduce or eliminate United States
         withholding taxes applicable to payments made

                                      -33
<PAGE>

         hereunder, such Lender shall, if requested by the Company, timely
         provide such forms or other information to the Company, and the Company
         shall not be required to pay any amounts pursuant to Section 4.05(a),
         4.05(c) or 4.05(d) to the extent such amount would not have been owed
         but for a failure of such Lender to comply with its obligations under
         this proviso.

         (h) Each Lender shall use reasonable efforts to avoid or minimize any
amounts which might otherwise be payable pursuant to this Section 4.05;
provided, however, that such efforts shall not include the taking of any actions
by a Lender that would result in any tax, cost or other expense to such Lender
(other than a tax, cost or expense for which such Lender shall have been
reimbursed or indemnified by the Company pursuant to this Agreement or
otherwise) or any action which would in the reasonable opinion of such Lender
have an adverse effect upon its financial condition, operations, business or
properties.

         (i) Each Lender agrees to indemnify the Agent and hold the Agent
harmless for the full amount of any and all present or future Taxes, Other Taxes
and related liabilities (including penalties, interest, additions to tax and
expenses, and any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable to Agent under this Section 4.05(i)) which are imposed on or with
respect to principal, interest or fees payable to such Lender hereunder and
which are not paid by the Company pursuant to this Section 4.05, whether or not
such Taxes, Other Taxes or related liabilities were correctly or legally
asserted. This indemnification shall be made within 30 days from the date the
Agent makes written demand therefor.

                                      -34
<PAGE>

         4.06 Sharing of Payments, Etc. If, other than as provided in Section
3.05, 4.02, 4.03, 4.04, 4.05 or 4.06, any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) on account of any Committed Loan made by it or, after the occurrence
and during the continuation of an Event of Default pursuant to Section 10.01(a),
in respect of any Obligation owing to it (including with respect to any Bid
Loan), in excess of its Commitment Percentage of payments on account of the
Committed Loans or, after the occurrence and during the continuation of an Event
of Default pursuant to Section 10.01(a), in excess of its pro rata share of all
Obligations, such Lender shall forthwith purchase from the other Lenders such
participations in the Committed Loans made by them or, after the occurrence and
during the continuation of an Event of Default pursuant to Section 10.01(a), in
all Obligations owing to them, as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of the other Lenders
according to their Commitment Percentages or, after the occurrence and during
the continuation of an Event of Default pursuant to Section 10.01(a), their pro
rata shares of all Obligations then owing to them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase by such Lender from each other Lender shall be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such paying Lender's pro rata share (according to the proportion of (a) the
amount of such paying Lender's required repayment to the purchasing Lender to
(b) the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Company agrees that any Lender so purchasing a
participation from another Lender pursuant to the provisions of this Section
4.06 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Company in the amount of
such participation. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 4.06 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.06 to share in the
benefits of any recovery on such secured claim.

                                   ARTICLE 5
                         CHANGES IN CIRCUMSTANCES; ETC.

         5.01 Eurodollar Rate Protection. If with respect to any Interest Period
for Eurodollar Loans, either (a) the Agent or the Required Lenders determine
that for any reason adequate and reasonable means do not exist for ascertaining
LIBOR for such Interest Period; or (b) by the first day of such Interest Period,
the Required Lenders notify the Agent that LIBOR for such Interest Period will
not adequately reflect the cost to the Required Lenders of making such
Eurodollar Loans or funding or maintaining their respective Eurodollar Loans for
such Interest Period, the Agent shall forthwith so notify the Company and the
Lenders, whereupon the obligations of the Lenders to make or continue Loans as
Eurodollar Loans or to convert Reference Rate Loans into Eurodollar Loans shall
be suspended until the Agent shall notify the Company and the Lenders that the
circumstances causing such suspension no longer exist and any then outstanding
Eurodollar Loans shall at the end of the then current Interest Period for such
Loans be converted into Reference Rate Loans.

         5.02 Additional Interest on Eurodollar Loans. The Company shall pay to
each Lender, on demand of such Lender, as long as such Lender shall be required
under regulations of the Federal Reserve Board to maintain reserves with respect
to liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Eurodollar Loan of
such Lender

                                      -35
<PAGE>

from the date such Eurodollar Loan is made until such principal amount is paid
in full, at a rate per annum equal at all times to the remainder obtained by
subtracting (a) LIBOR for the Interest Period for such Eurodollar Loan from (b)
the rate obtained by dividing such LIBOR by a percentage equal to 100% minus the
Eurodollar Reserve Percentage of such Lender for such Interest Period, payable
on each Interest Payment Date for such Eurodollar Loan.

         5.03 Increased Costs. If, due to either (a) the introduction of or any
change (other than any change by way of imposition of or increase in reserve
requirements covered by Section 5.02) in or in the interpretation of any law or
regulation after the date hereof (except to the extent such introduction, change
or interpretation affects Taxes or Other Taxes) or (b) the compliance with any
guideline or request issued after the date hereof (except to the extent such
guideline or request affects Taxes or Other Taxes) from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining any Eurodollar Loans or participating in Letters of
Credit or, in the case of the Issuing Bank, any increase in the cost to the
Issuing Bank of agreeing to issue, issuing or maintaining any Letter of Credit
or of agreeing to make or making, funding or maintaining any unpaid drawing
under any Letter of Credit, then the Company shall, subject to Section 5.08(b),
be liable for, and shall from time to time, upon demand therefor by such Lender
to the Company through the Agent, pay to the Agent for the account of such
Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs. For purposes of this Section 5.03, the term "Taxes" shall have
the meaning specified in Section 4.05(a) without regard to the exclusions set
forth in Section 4.05(a).

         5.04 Illegality. Notwithstanding any other provision of this Agreement,
if the introduction of any Requirement of Law, or in the interpretation or
administration of any Requirement of Law shall, after the date hereof, make it
unlawful, or any central bank or other Governmental Authority shall assert that
it is unlawful, for any Lender or its applicable Lending Office to make or
continue Committed Loans as Eurodollar Loans or to convert Reference Rate Loans
into Eurodollar Loans, then, on notice thereof and demand therefor by such
Lender to the Company through the Agent, (a) the obligation of such Lender to
make or to continue Committed Loans as Eurodollar Loans or to convert Reference
Rate Loans into Eurodollar Loans shall terminate and (b) the Company shall
forthwith prepay in full all Eurodollar Loans of such Lender then outstanding,
together with interest accrued thereon, either on the last day of the then
current Interest Period applicable to each such Eurodollar Loan if such Lender
may lawfully continue to maintain such Eurodollar Loan to such day, or
immediately if such Lender may not lawfully continue to maintain such Eurodollar
Loan to such day, unless the Company, on or prior to the date on which it would
otherwise be required to prepay such Eurodollar Loan, converts all Eurodollar
Loans of all Lenders then outstanding into Reference Rate Loans.

         5.05 Capital Adequacy. In the event that any Lender shall determine
that the compliance with any law, rule or regulation regarding capital adequacy,
or any change therein or in the interpretation or application thereof or
compliance by such Lender (or its Lending Office) or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any central bank or other Governmental
Authority, affects or would affect the amount of capital required or expected to
be maintained by such Lender or any corporation controlling such Lender and such
Lender (taking into consideration such Lender's or such corporation's policies
with respect to capital adequacy and such Lender's or such corporation's desired
return on capital) determines that the amount of such capital is increased as a
consequence of such Lender's obligation under this Agreement, then the Company
shall, subject to Section 5.08(b), be liable for and shall from time to time,
upon demand therefor by such Lender through the Agent, pay to the Agent for the
account of such Lender such additional amounts as are sufficient to compensate
such Lender for such increase.

                                      -36
<PAGE>

         5.06 Funding Losses.

         (a) If the Company makes any payment or prepayment of principal with
respect to any Eurodollar Loan (including payments made after any acceleration
thereof) or converts any Loan from a Eurodollar Loan to a Reference Rate Loan on
any day other than the last day of an Interest Period applicable thereto, the
Company shall pay to each Lender, upon demand therefor by such Lender, the
amount (if any) by which (i) the present value of the additional interest which
would have been payable on the amount so received had it not been received until
the last day of such Interest Period exceeds (ii) the present value of the
interest which would have been recoverable by such Lender by placing such amount
so received on deposit in the London interbank market for a period starting on
the date on which it was so received and ending on the last day of such Interest
Period. For purposes of determining present value under this Section 5.06(a),
interest amounts shall be discounted at a rate equal to the sum of (A) LIBOR
determined two Business Days before the date on which such principal amount is
received for an amount substantially equal to the amount received and for a
period commencing on the date of such receipt and ending on the last day of the
relevant Interest Period, plus (B) the percentage above LIBOR payable in respect
of such Eurodollar Loan pursuant to Section 2.09(a)(ii).

         (b) If the Company fails to prepay, borrow, convert or continue any
Eurodollar Loan after a notice of prepayment, borrowing, conversion or
continuation has been given (or is deemed to have been given) to any Lender, the
Company shall reimburse each Lender, upon demand therefor by such Lender, for
any resulting loss and expense incurred by it, including any loss incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender from third parties to fund any Eurodollar Loan.

         (c) If for any reason any Lender receives all or part of the principal
amount of a Bid Loan owed to it prior to the scheduled maturity date thereof,
the Company shall, on demand by such Lender, pay such Lender the amount (if any)
by which (i) the present value of the additional interest which would have been
payable on the amount so received had it not been received until such maturity
date exceeds (ii) the present value of the interest which would have been
recoverable by such Lender by placing such amount so received on deposit in the
London interbank market for a period starting on the date on which it was so
received and ending on such maturity date. For purposes of determining present
value under this Section 5.06(c), interest amounts shall be discounted at a rate
equal to the sum of (A) LIBOR determined two Business Days before the date on
which such principal amount is received for an amount substantially equal to the
amount received and for a period commencing on the date of such receipt and
ending on such maturity date, plus (B) the percentage above LIBOR payable in
respect of Eurodollar Loans constituting Tranche A Loans pursuant to Section
2.09(a)(ii).

         5.07 Funding; Certificates of Lenders.

         (a) Each Lender may fulfill its obligation to make, continue or convert
Loans into Eurodollar Loans by causing one of its foreign branches or Affiliates
(or an international banking facility created by such Lender) to make or
maintain such Eurodollar Loans; provided, however, that such Eurodollar Loans
shall in such event be deemed to have been made and to be held by such Lender
and the obligation of the Company to repay such Eurodollar Loans shall be to
such Lender for the account of such foreign branch, Affiliate or international
banking facility. In addition, the Company hereby consents and agrees that, for
purposes of any determination to be made pursuant to Section 5.01, 5.02, 5.03,
5.04 or 5.06, it shall be conclusively assumed that each Lender elected to fund
all Eurodollar Loans by purchasing dollar deposits in the interbank eurodollar
market for its Eurodollar Lending Office.

                                      -37
<PAGE>

         (b) Any Lender claiming reimbursement or compensation pursuant to
Sections 4.05, 5.02, 5.03, 5.05 and/or 5.06 shall deliver to the Company through
the Agent a certificate setting forth in reasonable detail the basis for
computing the amount payable to such Lender hereunder and such certificate shall
be conclusive and binding on the Company in the absence of manifest error. The
Company shall pay to any Lender claiming compensation or reimbursement from the
Company pursuant to Sections 5.02, 5.03, 5.05 or 5.06 the amount requested by
such Lender no later than five Business Days after such demand.

         5.08 Change of Lending Office; Limitation on Increased Costs.

         (a) Each Lender agrees that upon the occurrence of any event giving
rise to the operation of Section 4.05(c) or (d) or Sections 5.02, 5.03, 5.04 or
5.05 with respect to such Lender, it will use commercially reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
minimize the imposition of any costs and expenses pursuant to such Sections and
to designate a different Lending Office for any Loans affected by such event
with the object of avoiding the consequence of the event giving rise to the
operation of such Section. Nothing in this Section 5.08 shall affect or postpone
any of the obligations of the Company or the right of any Lender provided in
Section 4.05(c) or (d) or Sections 5.02, 5.03, 5.04 or 5.05.

         (b) Notwithstanding the provisions of Sections 4.05(c), 4.05(d), 5.02,
5.03 and 5.05, the Company shall only be obligated to compensate any Lender for
any amount arising or occurring during (i) any time or period commencing (A) in
the case of Section 4.05(c) or (d), not more than six months and (B) in the case
of Sections 5.02, 5.03 or 5.05, not more than three months, prior to the date on
which such Lender notifies the Agent and the Company that such Lender proposes
to demand such compensation and (ii) any time or period during which, because of
the unannounced retroactive application of any statute, regulation or other
basis, such Lender could not have known that such amount might arise or accrue.

                                      -38
<PAGE>

         5.09 Replacement of Lenders. The Company may from time to time for
reasonable cause, as determined by the management of the Company, including
invocation of any provision of this Article 5 by any Lender, designate one or
more banks (any such bank so designated being herein called a "Replacement
Lender") willing, in its or their sole discretion, to purchase all of the
Committed Loans of any one or more Lenders and each such Lender's rights
hereunder (other than any such rights with respect to Bid Loans), without
recourse to or warranty by, or expense to, such Lender for a purchase price
equal to the outstanding principal amount of the Committed Loans payable to such
Lender plus any accrued but unpaid interest on such Committed Loans and accrued
but unpaid Utilization Fees and facility fees in respect of such Lender's
Commitment, if any, and any other amounts payable to such Lender under this
Agreement or any other Loan Document (other than with respect to Bid Loans),
including any amount payable pursuant to Section 5.06 as though such Lender's
Eurodollar Loans were being prepaid on the date of such purchase, and to assume
all the obligations of such Lender hereunder (other than with respect to Bid
Loans), and, upon such purchase, such Lender shall no longer be a party hereto
or have any rights hereunder (except those that pertain to its Bid Loans and
those that survive full payment hereunder) and shall be relieved from all
obligations to the Company hereunder, and the Replacement Lender shall succeed
to the rights and obligations of such Lender hereunder (other than with respect
to Bid Loans).

                                   ARTICLE 6
                         REPRESENTATIONS AND WARRANTIES

         In order to induce the Lenders and the Agent to enter into this
Agreement and to induce the Lenders to extend their Commitments and to make
Loans, the Company represents and warrants to the Lenders and the Agent as
follows:

         6.01 Corporate Existence; Compliance with Law. The Company and each
Restricted Subsidiary:

         (a) is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;

         (b) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction in which the character of the properties
owned or held under lease by it or the nature of the business transacted by it
requires such qualification except where the failure to be so qualified is not
likely to have a Material Adverse Effect;

         (c) has all requisite corporate power and authority to own, pledge,
mortgage, hold under lease and operate its properties and to conduct its
business as now or currently proposed to be conducted; and

         (d) is in compliance with all Requirements of Law applicable to it and
its business except for such non-compliance which is not likely to have a
Material Adverse Effect.

         6.02 Corporate Power; Authorization. The execution, delivery and
performance by each Loan Party of the Loan Documents to which such Loan Party is
a party:

         (a) are within the respective corporate powers of such Loan Party;

         (b) have been, or prior to such execution will have been, duly
authorized by all necessary corporate action, including the consent of
shareholders where required;

                                      -39
<PAGE>

         (c) do not:

              (i) contravene the articles or certificate of incorporation or
         by-laws of such Loan Party;

              (ii) violate any other Requirement of Law;

              (iii) conflict with or result in the breach of, or constitute a
         default under, any Contractual Obligation of such Loan Party, except
         for such conflicts, breaches or defaults which are not likely to have a
         Material Adverse Effect and which do not subject any Lender or the
         Agent to any criminal liability or any material civil liability; or

              (iv) result in the creation or imposition of any Lien upon any of
         the property of any Loan Party; and

         (d) do not require the consent of, authorization by, approval of or
notice to, or filing or registration with, any Governmental Authority or any
other Person other than (i) as of the Closing Date, those which have been
obtained, made or given and which are fully disclosed on Schedule 6.02(d) and
(ii) those which are not required to be obtained, made or given as of the
Closing Date but which will be obtained, made or given as and when required.

         6.03 Enforceable Obligations. This Agreement and each other Loan
Document to which any Loan Party is a party have been duly executed and
delivered by such Loan Party. This Agreement is, and each other Loan Document
when delivered hereunder will be, legal, valid and binding obligations of each
Loan Party, a party thereto, enforceable against each such Loan Party in
accordance with their respective terms except as such enforcement may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or limiting creditors' rights generally.

         6.04 Taxes. As of the Closing Date, the Company and each Restricted
Subsidiary have filed all federal, state, local and foreign tax returns which
are required to have been filed in any jurisdiction and have paid all taxes
shown to be due thereon or otherwise assessed, to the extent the same have
become due and payable and before they have become delinquent, except for any
taxes and assessments the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which the Company has set aside on its books reserves (adequate in
accordance with, and segregated to the extent required by, GAAP) and the
non-filing or non-payment of which is not likely to have a Material Adverse
Effect.

         6.05 Financial Matters.

         (a) The consolidated balance sheet of the Company and its Subsidiaries
as of the last day of the fiscal year ended on December 31, 1998, and the
related consolidated statements of income and cash flows of the Company and its
Subsidiaries for such fiscal year, all with reports thereon by Arthur Andersen &
Co., independent public accountants, copies of which have been delivered to the
Agent and each Lender prior to the execution of this Agreement, fairly present
the consolidated financial position of the Company and its Subsidiaries as of
the date of said balance sheet and the consolidated results of their operations
for the period covered by said statements of income and cash flows, and have
been prepared in accordance with GAAP consistently applied in all material
respects by the Company and its Subsidiaries throughout the period involved,
except as set forth in the notes thereto. There are no material liabilities,

                                      -40
<PAGE>

contingent or otherwise, of the Company or any Subsidiary not reflected in the
consolidated balance sheet as of December 31, 1998 or in the notes thereto which
are required to be disclosed therein.

         (b) Since December 31, 1998, there has been no Material Adverse Effect
and no development which is likely to have a Material Adverse Effect, except as
reflected in the Company's periodic reports filed with the Securities and
Exchange Commission prior to the Closing Date.

         (c) There is no material obligation, contingent liability or liability
for taxes, long-term leases or unusual forward or long-term commitments which is
not reflected in the December 31, 1998 consolidated financial statements of the
Company and its Subsidiaries or in the notes thereto which are required by GAAP
to be disclosed therein and no liability reflected in such notes is likely to
have a Material Adverse Effect.

         6.06 Litigation. As of the Closing Date, there are no pending or, to
the knowledge of the Company, threatened, actions or proceedings affecting the
Company or any Restricted Subsidiary before any court or other Governmental
Authority or any arbitrator that are likely to have a Material Adverse Effect.

         6.07 Subsidiaries.

         (a) Set forth on Schedule 6.07 is a complete and correct list of all
Restricted Subsidiaries and Unrestricted Subsidiaries of the Company as of the
Closing Date, showing, as to each such Subsidiary, the correct name thereof, the
jurisdiction of its incorporation and the percentage of shares of each class of
its securities outstanding owned by the Company and each other Subsidiary of the
Company.

         (b) (i) All of the outstanding shares of securities of each of the
Subsidiaries of the Company listed on Schedule 6.07 have been validly issued,
are fully paid and nonassessable and are owned by the Company or another
Subsidiary of the Company, free and clear of any Lien, except as otherwise
permitted hereunder, and (ii) no Subsidiary of the Company owns any shares of
securities of the Company.

         6.08 Liens. As of the Closing Date, there are no Liens of any nature
whatsoever on any properties owned by the Company or any Restricted Subsidiary
other than Permitted Liens.

         6.09 No Burdensome Restrictions; No Defaults.

         (a) As of the Closing Date, neither the Company nor any Restricted
Subsidiary is a party to any Contractual Obligation the performance of which is
likely to have a Material Adverse Effect.

         (b) As of the Closing Date, no provision or provisions of any
applicable Requirement of Law has or is likely to have a Material Adverse
Effect.

         (c) Neither the Company nor any Restricted Subsidiary is in default
under or with respect to any Contractual Obligation which default is likely to
have a Material Adverse Effect.

         (d) No Default or Event of Default has occurred and is continuing.

         6.10 Investment Company Act; Public Utility Holding Company Act. No
Loan Party is an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended,

                                      -41
<PAGE>

or a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended. The making of the Loans by the Lenders, the application of the
proceeds and repayment thereof by the Company and the consummation of the
transactions contemplated by the Loan Documents will not violate any provision
applicable to any Loan Party of (a) the Investment Company Act of 1940, as
amended, or (b) any rule, regulation or order issued by the Securities and
Exchange Commission thereunder.

         6.11 Margin Regulations. No part of the proceeds of any Loan will be
used in violation of Regulation T, U, or X of the Federal Reserve Board. After
giving effect to the application of the proceeds of the Loans (including the
Loans to be made on the Closing Date) less than twenty-five percent (25%) of the
assets of the Company, individually and on a consolidated basis with its
Subsidiaries, consists of margin stock. The Company is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock. Terms for which meanings are
provided in Regulation U of the Federal Reserve Board or any regulations
substituted therefor, as from time to time in effect, are used in this Section
6.11 with such meanings.

         6.12 Environmental Matters. Except as set forth on Schedule 6.12:

         (a) all facilities and property (including underlying groundwater)
presently owned or leased by the Company or any of its Subsidiaries have been,
and continue to be, owned or leased by the Company and its Subsidiaries in
material compliance with all Environmental Laws, except for such non-compliance
as is not likely to have a Material Adverse Effect;

         (b) there are no pending or threatened

              (i) claims, complaints, notices or requests for information
         received by the Company or any of its Subsidiaries with respect to any
         alleged violation of any Environmental Law which are likely to have a
         Material Adverse Effect, or

              (ii) claims, complaints, notices or inquiries to the Company or
         any of its Subsidiaries regarding potential liability under any
         Environmental Law which are likely to have a Material Adverse Effect;

         (c) except for Releases of Hazardous Materials which occurred after the
date that the Company or any of its Subsidiaries sold, transferred, assigned or
otherwise disposed of its interests in any previously owned or leased property,
there have been no Releases of Hazardous Materials at, on or under any property
now or previously owned or leased by the Company or any of its Subsidiaries that
are likely to have a Material Adverse Effect;

         (d) the Company and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary or
desirable for their businesses except for such non-compliance as is not likely
to have a Material Adverse Effect;

         (e) (i) no property presently owned or leased by the Company or any of
its Subsidiaries, and (ii) to the best of the knowledge of the Company, no
property previously owned or leased by the Company or any of its Subsidiaries,
is listed or proposed for listing on the National Priorities List pursuant to
CERCLA or on any similar published state list of sites requiring investigation
or clean-up;

                                      -42
<PAGE>

         (f) to the knowledge of the Company, there are no underground storage
tanks, active or abandoned, including petroleum storage tanks, on or under any
property now or previously owned or leased by the Company or any of its
Subsidiaries that are likely to have a Material Adverse Effect;

         (g) neither the Company nor any of its Subsidiaries has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar published
state list or which is the subject of federal, state or local enforcement
actions or other investigations which may lead to claims against the Company or
such Subsidiary for any remedial work, damage to natural resources or personal
injury, including claims under CERCLA, except for such claims which are not
likely to have a Material Adverse Effect;

         (h) there are no polychlorinated biphenyls or friable asbestos present
at any property now or previously owned or leased by the Company or any of its
Subsidiaries that are likely to have a Material Adverse Effect; and

         (i) to the knowledge of the Company, no conditions exist at, on or
under any property now or previously owned or leased by the Company or any of
its Subsidiaries which, with the passage of time, or the giving of notice or
both, are likely to have a Material Adverse Effect.

                                      -43
<PAGE>

         6.13 Labor Matters. Except as set forth on Schedule 6.13, there are no
strikes or other labor disputes or grievances or charges or complaints with
respect to any employee or group of employees pending or, to the knowledge of
the Company, threatened against the Company or any Restricted Subsidiary which
are likely to have a Material Adverse Effect.

         6.14 ERISA Plans. During the twelve-consecutive-month period prior to
the Closing Date, no steps have been taken to terminate any Pension Plan (other
than a standard termination as defined in Section 4041(b) of ERISA for which a
commitment to make the terminating Pension Plan sufficient is not required), and
no contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a Lien under Section 302(f) of ERISA. Other than liability for
benefit payments or contributions in the ordinary course, no condition exists or
event or transaction has occurred with respect to any Plan which is likely to
result in the incurrence by the Company or any member of the Controlled Group of
any material liability, fine or penalty. Each Plan complies with the applicable
provisions of ERISA and the Code, except where such non-compliance is not likely
to have a Material Adverse Effect. Except as disclosed on Schedule 6.14, neither
the Company nor any Subsidiary of the Company has any material contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Subtitle B
of Title I of ERISA.

         6.15 Y2K Review. On the basis of a comprehensive review and assessment
of the Company's and its Subsidiaries' systems and equipment and due inquiry
made of the Company's and its Subsidiaries' material suppliers, vendors and
customers, the Company's Responsible Officers are of the view that the "Year
2000 problem" (i.e., the inability of computers, as well as embedded microchips
in non-computing devices, to perform properly date-sensitive functions with
respect to certain dates prior to and after December 31, 1999), including costs
of remediation, will not result in a Material Adverse Effect. The Company and
its Subsidiaries have developed feasible contingency plans adequately to ensure
uninterrupted and unimpaired business operation in the event of failure of their
own or a third party's systems or equipment due to the Year 2000 problem,
including those of vendors, customers and suppliers, as well as a general
failure of or interruption in its communications and delivery infrastructure.

         6.16 Swap Obligations. Neither the Company nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.

         6.17 Full Disclosure. None of the representations or warranties made by
the Company or any Restricted Subsidiary in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Restricted Subsidiary in connection with
the Loan Documents (including the offering and disclosure materials delivered by
or on behalf of the Company to the Lenders prior to the Closing Date), contains
any untrue statement of a material fact or omits any material fact required to
be stated therein or otherwise necessary to make the statements made therein, in
light of the circumstances under which they are made, not misleading as of the
time when made or delivered.

                                   ARTICLE 7
                              CONDITIONS PRECEDENT

                                      -44
<PAGE>

         7.01 Conditions Precedent to the First Loan. The obligation of each
Lender to make its initial Loan and the obligation of the Issuing Bank to Issue
its initial Letter of Credit is subject to the satisfaction of the condition
precedent that the Agent shall have received the following, each, unless
otherwise specified below, dated as of the Closing Date, in form and substance
satisfactory to the Agent and its counsel:

         (a) Board Resolutions; Incumbency Certificates. A certificate of the
Secretary or an Assistant Secretary of each Loan Party certifying (i) the
resolutions of the Board of Directors of such Loan Party approving each Loan
Document to which such Loan Party is a party and the transactions contemplated
hereby and thereby, (ii) all documents evidencing other necessary corporate
action, if any, by each Loan Party with respect to each Loan Document and (iii)
the names and signatures of the officers authorized to act with respect to each
Loan Document executed by it, upon which certificate the Agent and each Lender
may conclusively rely until they shall have received a further certificate of
the Secretary or Assistant Secretary of such Loan Party canceling or amending
such prior certificate;

         (b) Articles of Incorporation; By-Laws and Good Standing. Each of the
following documents:

              (i) the articles or certificate of incorporation of each Loan
         Party as in effect on the Closing Date, certified (A) by the Secretary
         of State of the state of incorporation of such Loan Party as of a date
         reasonably close to the Closing Date, and (B) by the Secretary or an
         Assistant Secretary of such Loan Party as of the Closing Date, and the
         by-laws of each Loan Party, as in effect on the Closing Date, certified
         by the Secretary or an Assistant Secretary of such Loan Party as of the
         Closing Date; and

              (ii) a good standing certificate for each Loan Party from the
         Secretary of State of the state of incorporation of such Loan Party as
         of a date reasonably close to the Closing Date;

         (c) Subsidiary Guaranty. A guaranty, duly executed by each Principal
Subsidiary, in substantially the form of Exhibit 7.01(c) (the "Subsidiary
Guaranty");

         (d) Legal Opinion. A favorable opinion addressed to the Agent and all
Lenders from counsel to the Company and its Subsidiaries, in substantially the
form of Exhibit 7.01(d) (which opinion the Company and its Subsidiaries hereby
expressly instruct such counsel to prepare and deliver);

         (e) Contribution Agreement. A duly executed copy of the Contribution
Agreement, in substantially the form of Exhibit 7.01(e) (the "Contribution
Agreement"); and

                                      -45
<PAGE>

         (f) Termination of the 1996 Credit Agreement. Evidence satisfactory to
the Agent that the 1996 Credit Agreement and the commitments of the lenders
thereunder shall have been terminated and all committed loans owing to the
lenders thereunder shall have been paid in full; provided, however, that the
obligations of the Company with respect to the 1996 Facility Bid Loans
outstanding on the Closing Date shall survive the termination of the 1996 Credit
Agreement and such 1996 Facility Bid Loans shall be repaid when due in
accordance with their respective terms.

         7.02 Additional Conditions Precedent to the First Loan. The obligation
of each Lender to make its initial Loan and the obligation of the Issuing Bank
to Issue its initial Letter of Credit is subject to the further conditions
precedent that:

         (a) No Material Adverse Effect. Since December 31, 1998, there shall
have been no Material Adverse Effect and no development which is likely to have
a Material Adverse Effect, except as reflected in the Company's periodic reports
filed with the Securities and Exchange Commission prior to the Closing Date.

         (b) Margin Regulations. All Loans made by the Lenders shall be in full
compliance with all applicable Requirements of Law, including Regulations T, U
and X of the Federal Reserve Board.

         (c) Fees Costs and Expenses. The Company shall have paid all fees
referred to in Section 4.01 to the extent then due and payable and all
reasonable costs and expenses referred to in Section 12.04 (including legal fees
and expenses) and any indemnity pursuant to Section 12.05 which, in each case,
may be then due and payable.

         (d) Company Officer's Certificate. The Company shall have delivered to
the Agent a certificate from a Responsible Officer of the Company in
substantially the form of Exhibit 7.02(d) as to the satisfaction of the
conditions set forth in this Section 7.02 and to the effect that on the Closing
Date, the representations and warranties contained in Article 6 are correct.

         (e) North American Timber Agreement. All conditions precedent described
in Sections 7.01 and 7.02 of the North American Timber Agreement shall have been
satisfied.

         7.03 Conditions Precedent to Each Committed Loan and Letter of Credit.
The obligation of each Lender to make any Committed Loan (including its initial
Committed Loan) and the obligation of the Issuing Bank to Issue any Letter of
Credit (including the initial Letter of Credit) shall be subject to the further
conditions precedent that:

         (a) Notice of Borrowing. The Agent shall have received a Notice of
Borrowing as required by Section 2.02 or in the case of any Issuance of any
Letter of Credit, the Issuing Bank and the Agent shall have received an L/C
Application or L/C Amendment Application, as required under Section 3.02.

         (b) Accuracy of Representations; No Default; Etc. The following
statements shall be true on the date of each Committed Loan or Issuance Date, as
the case may be, before and after giving effect thereto:

              (i) The representations and warranties contained in Article 6 are
         correct on and (except for representations and warranties relating
         solely to a particular point in time and, after the initial Committed
         Borrowing, other than under Section 6.05(b)) as of such date as though
         made on and as of such date; and

                                      -46
<PAGE>

              (ii) No Default or Event of Default has occurred and is continuing
         or would result from such Committed Loan being made or Letter of Credit
         being Issued on such date.

         (c) Other Assurances. The Agent shall have received such other
approvals, opinions or documents as any Lender through the Agent may reasonably
request related to the transactions contemplated hereby.

         7.04 Conditions Precedent to Each Bid Borrowing. The obligation of each
Lender which is to make a Bid Loan in connection with a Bid Borrowing (including
the initial Bid Borrowing) to make such Bid Loan shall be subject to the further
conditions precedent:

         (a) Promissory Notes. If so requested by such Lender, the Company shall
have delivered to such Lender a promissory note in the form of Exhibit 2.05(c)
evidencing the Indebtedness of the Company in respect of such Bid Loan.

         (b) Accuracy of Representations; No Default; Etc. The following
statements shall be true on the date of each Bid Borrowing, before and after
giving effect thereto and to the application of the proceeds from the Bid Loans
being made on such date:

              (i) The representations and warranties contained in Article 6 are
         correct on and (except for representations and warranties relating
         solely to a particular point in time and other than under Section
         6.05(b) as of such date as though made on and as of such date; and

              (ii) No Default or Event of Default has occurred and is continuing
         or would result from such Bid Loan being made on such date.

                                   ARTICLE 8
                              AFFIRMATIVE COVENANTS

         The Company agrees that as long as the obligations of the Lenders to
make Loans shall remain in effect or any Letter of Credit remain outstanding and
until all Obligations shall have been paid or performed in full, unless the
Required Lenders shall otherwise consent in writing:

                                      -47
<PAGE>

         8.01 Application of Proceeds. The Company will apply the proceeds of
the Loans for general corporate purposes.

         8.02 Compliance with Laws, Etc. The Company will comply, and cause each
of its Subsidiaries to comply, in all material respects with all applicable
Requirements of Law except for such non-compliance as is being contested in good
faith by appropriate proceedings or is not likely to have a Material Adverse
Effect.

         8.03 Payment of Taxes, Etc. The Company will pay and discharge, and
cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, all lawful claims and all taxes, assessments and governmental
charges or levies except where contested in good faith, by proper proceedings,
if adequate reserves therefor have been established on the books of the Company
in accordance with, and to the extent required by, GAAP, or if such non-payment
(individually and in the aggregate with all other such non-payments) is not
likely to have a Material Adverse Effect.

         8.04 Maintenance of Insurance. The Company will maintain, and cause
each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Company and such Subsidiaries
operate; provided, however, that the Company and its Subsidiaries may
self-insure to the extent that the Company or any such Subsidiary may in its
discretion determine; and provided, further, that the Company may maintain
insurance on behalf of any of its Subsidiaries. Without limiting the generality
of the foregoing, the Company will, and will cause each of its Subsidiaries to,
maintain insurance coverages that are at least substantially the same as the
insurance coverages maintained on the Closing Date.

         8.05 Preservation of Corporate Existence, Etc. The Company will
preserve and maintain, and cause each Restricted Subsidiary to preserve and
maintain, its corporate existence, rights (charter and statutory), and
franchises, except as permitted under Section 9.03 or except to the extent that
the failure by the Company or any such Restricted Subsidiary to comply with the
foregoing is not likely to have a Material Adverse Effect.

         8.06 Access. The Company will from time to time, during normal business
hours upon reasonable notice, or, if a Default or an Event of Default shall have
occurred and be continuing, at any time upon notice to an officer of the Company
having at least the rank of Vice President, permit the Agent, any Lender and any
agent or representative thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Company and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Company and any of its Subsidiaries with any of their respective
officers.

         8.07 Keeping of Books. The Company will keep proper books of record and
account, in which full and correct entries, on a consolidated basis for the
Company and its Subsidiaries, shall be made of all financial transactions and
the assets and business of the Company and its Subsidiaries in accordance with
GAAP consistently applied.

         8.08 Maintenance of Properties, Etc. The Company will maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, all of
its properties in good repair, working order and condition, and from time to
time make or cause to be made all necessary and proper repairs, renewals,
replacements and improvements so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 8.08 shall

                                      -48
<PAGE>

prevent the Company or any of its Subsidiaries from discontinuing the
maintenance or preservation of any of its properties if such discontinuance is,
in the opinion of the Company, desirable in the conduct of its business and is
not likely to have a Material Adverse Effect.

         8.09 Financial Statements. The Company will furnish to the Agent, with
sufficient copies for the Lenders:

         (a) as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Company,
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such quarter and the related statements of income and cash flows for such
quarter and for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter;

         (b) as soon as available and in any event within 90 days after the end
of each fiscal year of the Company, audited consolidated balance sheets of the
Company and its Subsidiaries as of the end of such year and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the period commencing at the end of the previous fiscal year and
ending with the end of such year; and

         (c) at the same time it furnishes each set of financial statements
pursuant to subsections 8.09(a) and (b), (i) a certificate of a Responsible
Officer of the Company to the effect that no Default or Event of Default has
occurred and is continuing (or if any Default or Event of Default has occurred
and is continuing, describing the same in reasonable detail and the action which
the Company proposes to take with respect thereto) and (ii) a compliance
certificate in substantially the form of Exhibit 8.09(c).

         8.10 Reporting Requirements. The Company will furnish to the Agent,
with sufficient copies for the Lenders:

         (a) promptly and in any event within three Business Days after the
Company becomes aware of the existence of any Default or Event of Default,
notice by telephone or facsimile specifying the nature of such Default or Event
of Default, which notice, if given by telephone, shall be promptly confirmed in
writing within five Business Days;

         (b) promptly after the sending or filing thereof, copies of all reports
which the Company sends to its security holders generally and copies of all
reports and registration statements which the Company or any of its Subsidiaries
files with the Securities and Exchange Commission or any national securities
exchange (including the Company's Quarterly Report on Form 10-Q and Annual
Report on Form 10-K);

         (c) promptly but not later than three Business Days after the Company
becomes aware of any change by Moody's or S&P in its Debt Rating, notice by
telephone or facsimile of such change; and

         (d) such other information respecting the business, prospects,
properties, operations or condition, financial or otherwise of the Company or
any of its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.

                                      -49
<PAGE>

         8.11 ERISA Plans. The Company will maintain and operate, and cause each
Subsidiary to maintain and operate, each Plan in material compliance with ERISA
and the Code and all applicable regulations thereunder.

         8.12 Environmental Compliance; Notice. The Company will, and will cause
each of its Subsidiaries to:

         (a) endeavor to use and operate all of its facilities and properties in
substantial compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in substantial compliance therewith,
and handle all Hazardous Materials in substantial compliance with all applicable
Environmental Laws;

         (b) promptly upon receipt of all written claims, complaints, notices or
inquiries relating to the condition of its facilities and properties or
compliance with Environmental Laws, evaluate such claims, complaints, notices
and inquiries and forward copies of (i) all such claims, complaints, notices and
inquiries which individually are likely to have a Material Adverse Effect and
(ii) all such claims, complaints, notices and inquiries, arising from a single
occurrence which together are likely to have a Material Adverse Effect, and
endeavor to promptly resolve all such actions and proceedings relating to
compliance with Environmental Laws; and

         (c) provide such information and certifications which the Agent may
reasonably request from time to time to evidence compliance with this Section
8.12.

         8.13 New Subsidiaries. If the Company or any of its Subsidiaries at any
time after the date hereof acquires, forms, or establishes any Principal
Subsidiary or any Subsidiary becomes a Principal Subsidiary, the Company shall
cause any such Principal Subsidiary to promptly (a) execute and deliver to Agent
each of the Subsidiary Guaranty and the Contribution Agreement; and (b) provide
such evidence of due authorization, execution, and delivery of such Loan
Documents as the Agent or the Required Lenders may reasonably require.

                                   ARTICLE 9
                               NEGATIVE COVENANTS

         The Company agrees that as long as the obligations of the Lenders to
make Loans shall remain in effect and until all Obligations shall have been paid
or performed in full, unless the Required Lenders shall otherwise consent in
writing:

         9.01 Liens, Etc. The Company shall not create or assume and shall not
permit any Restricted Subsidiary to create or assume, any Lien upon or with
respect to any of its Principal Properties or shares of capital stock or
Indebtedness of any Restricted Subsidiary, whether now owned or hereafter
acquired, without making effective provision, and the Company in such case will
make or cause to be made effective provision, whereby the Obligations shall be
secured by such Lien equally and ratably with any and all other Indebtedness or
obligations thereby secured, so long as such other Indebtedness or obligations
shall be so secured; provided, however, that the foregoing shall not apply to
any of the following:

         (a) Liens existing on the Closing Date and set forth on Schedule 9.01;

                                      -50
<PAGE>

         (b) Liens on any Principal Property acquired, constructed or improved
after the date of this Agreement which are created or assumed contemporaneously
with, or within 120 days after, or pursuant to financing arrangements for which
a firm commitment is made by a bank, insurance company or other lender or
investor (not including the Company or any Restricted Subsidiary) within 120
days after, the completion of such acquisition, construction or improvement to
secure or provide for the payment of any part of the purchase price of such
property or the cost of such construction or improvement, or, in addition to
Liens contemplated by Sections 9.01(c) and 9.01(d), Liens on any Principal
Property existing at the time of acquisition thereof; provided, however, that in
the case of any such acquisition, construction or improvement the Lien shall not
apply to any property theretofore owned by the Company and/or one or more
Restricted Subsidiaries other than, in the case of such construction or
improvement, any theretofore unimproved real property on which the property so
constructed, or the improvement, is located;

         (c) Liens on property or shares of capital stock or indebtedness of a
corporation existing at the time such corporation is merged into or consolidated
with the Company or a Restricted Subsidiary or existing at the time of a sale,
lease or other disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company, or to a Restricted Subsidiary;

         (d) Liens on property or shares of capital stock of a corporation
existing at the time such corporation becomes a Restricted Subsidiary;

         (e) Liens to secure Indebtedness of a Restricted Subsidiary to the
Company or one or more Restricted Subsidiaries;

         (f) Liens in favor of the United States of America or any State
thereof, or any department, agency or political subdivision of the United States
of America or any State thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any Indebtedness
incurred for the purpose of financing all or any part of the purchase price or
the cost of constructing or improving the property subject to such Liens;

         (g) Liens on timberlands in connection with an arrangement under which
the Company and/or one or more Restricted Subsidiaries are obligated to cut or
pay for timber in order to provide the lienholder with a specified amount of
money, however determined;

         (h) Liens created or assumed in the ordinary course of the business of
exploring for, developing or producing oil, gas or other minerals (including in
connection with borrowings of money for such purposes) on, or on any interest
in, or on any proceeds from the sale of, property acquired or held for the
purpose of exploring for, developing or producing oil, gas or other minerals, or
production therefrom, or proceeds of such production, or material or equipment
located on such property;

         (i) Liens in favor of any customer arising in respect of performance
deposits and partial, progress, advance or other payments made by or on behalf
of such customer for goods produced or to be produced or for services rendered
or to be rendered to such customer in the ordinary course of business, which
Liens shall not exceed the amount of such deposits or payments;

         (j) Liens on the property of the Company or any Restricted Subsidiary
incurred or pledges and deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance, old-age pensions
and other social security benefits other than in respect of employer plans
subject to ERISA;

                                      -51
<PAGE>

         (k) Liens pertaining to receivables or other accounts sold by the
Company or any of its Restricted Subsidiaries pursuant to a receivables sale
transaction in favor of the purchaser or purchasers of such receivables or other
accounts;

         (l) purchase money liens or purchase money security interests upon or
in any other property acquired by the Company or any Restricted Subsidiary in
the ordinary course of business to secure the purchase price of such property or
to secure Indebtedness incurred solely for the purpose of financing the
acquisition of such property;

         (m) extensions, renewals and replacements of Liens referred to in
Section 9.01(a) through (l) or this Section 9.01(m), provided, however, that the
Indebtedness secured thereby shall not exceed the principal amount of the
Indebtedness so secured at the time of such extension, renewal or replacement,
and such extension, renewal or replacement shall be limited to all or part of
the property or assets which secured the Lien extended, renewed or replaced
(plus improvements on such property);

         (n) Liens imposed by law, such as workers', materialmen's, mechanics',
warehousemen's, carriers', lessors', vendors' and other similar Liens incurred
by the Company or any Restricted Subsidiary arising in the ordinary course of
business which secure its obligations to any Person;

         (o) Liens created by or resulting from any litigation or proceedings
which are being contested in good faith by appropriate proceedings; Liens
arising out of judgments or awards against the Company and/or one or more
Restricted Subsidiaries with respect to which the Company and/or such Restricted
Subsidiary or Restricted Subsidiaries are in good faith prosecuting an appeal or
proceedings for review; or Liens incurred by the Company and/or one or more
Restricted Subsidiaries for the purpose of obtaining a stay or discharge in the
course of any legal proceeding to which the Company and/or such Restricted
Subsidiary or Restricted Subsidiaries are a party;

         (p) Liens for taxes, assessments or other governmental charges or
levies, either not yet due and payable or to the extent that non-payment thereof
shall be permitted by Section 7.03, landlord's liens on property held under
lease and tenants' rights under leases;

         (q) zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities of title
incident thereto which do not materially impair the value of any parcel of
property material to the operation of the business of the Company and its
Restricted Subsidiaries taken as a whole or the value of such property for the
purpose of such business; and

         (r) Liens arising in connection with Sale-Leaseback Transactions
permitted by Section 9.02.

         9.02 Sale-Leaseback Transactions. The Company shall not, and shall not
permit any Restricted Subsidiary to, enter into any arrangement with any Person
providing for the leasing by the Company and/or one or more Restricted
Subsidiaries of any Principal Property (except for temporary leases for a term,
including any renewal thereof, of not more than three years and except for
leases between the Company and one or more Restricted Subsidiaries or between
Restricted Subsidiaries) which property has been or is to be sold or transferred
by the Company and/or such Restricted Subsidiary or Restricted Subsidiaries to
such Person (a "Sale-Leaseback Transaction") unless (a) the Company and/or such
Restricted Subsidiary or Restricted Subsidiaries would be entitled to incur
Indebtedness secured by a Lien on such property without equally and ratably
securing the Obligations pursuant to the provisions of Section 9.01, or (b) the
Company shall apply or cause to be applied an amount equal to the Value of such
Sale-Leaseback Transaction within 120 days of the effective date of any
arrangement (i) to the retirement

                                      -52
<PAGE>

of Indebtedness for Borrowed Money incurred or assumed by the Company or any
Restricted Subsidiary (other than indebtedness for borrowed money owed to the
Company and/or one or more Restricted Subsidiaries) which by its terms matures
on, or is extendable or renewable at the option of the obligor to, a date more
than 12 months after the date of the incurrence or assumption of such
indebtedness and which is senior in right of payment to, or ranks pari passu
with, the Loans, or (ii) to the purchase of other property which will constitute
"Principal Property" having a fair value in the opinion of the Board of
Directors of the Company at least equal to the Value of such Sale-Leaseback
Transaction, or (c) the Company shall use the net proceeds to repay Loans
hereunder.

         Notwithstanding the provisions of Sections 9.01 and 9.02, the Company
and any one or more of its Restricted Subsidiaries may nevertheless create or
assume Liens which would otherwise require securing of the Obligations under
said provisions, and enter into Sale-Leaseback Transactions without compliance
with either Section 9.02(b) or 9.02(c), provided that the aggregate amount of
all such Liens and Sale-Leaseback Transactions permitted by this Section 9.02 at
any time outstanding (as measured by the sum of (a) all Indebtedness secured by
all such Liens then outstanding or to be so created or assumed, but excluding
secured Indebtedness permitted under the exceptions in Section 9.01, and (b) the
Value of all such Sale-Leaseback Transactions then outstanding or to be so
entered into, but excluding such transactions in which indebtedness is retired
or property is purchased or Loans are repaid) shall not exceed 10% of Net
Tangible Assets.

                                      -53
<PAGE>

         9.03 Mergers, Etc. The Company shall not merge or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets, whether now owned or hereafter acquired, to any Person; provided,
however, that the Company may merge or consolidate with or into any corporation
(whether or not affiliated with the Company) or convey, transfer, lease or
otherwise dispose of all or substantially all of its assets, to any other
corporation (whether or not affiliated with the Company) authorized to acquire
or operate the same, so long as (a) either (x) in the case of such merger or
consolidation, the Company is the surviving corporation or (y) if either (i) in
the case of such merger or consolidation, if the Company is not the surviving
corporation, or (ii) upon any such conveyance, transfer, lease or other
disposition, the surviving or transferee corporation expressly assumes the due
and punctual payment of all Obligations according to their terms and the due and
punctual performance and observance of all of the covenants and conditions of
this Agreement to be performed by the Company; and (b) after giving effect to
such transaction, no Default or Event of Default exists and the Company or such
surviving Person, as applicable, has demonstrated its compliance with Section
9.08 to the reasonable satisfaction of the Required Lenders.

         9.04 Transactions with Affiliates. The Company shall not enter into or
be a party to, or permit any of its Restricted Subsidiaries to enter into or be
a party to, any transaction with any Affiliate of the Company except (a) as may
be permitted under Sections 9.01, 9.02, or 9.03 or (b) transactions in the
ordinary course of business which are not likely to have a Material Adverse
Effect.

         9.05 Accounting Changes. The Company (a) shall not make, or permit any
of its Subsidiaries to make, any significant change in accounting treatment and
reporting practices except as permitted or required by GAAP or the Securities
and Exchange Commission and (b) shall not designate a different fiscal year
other than a fiscal year that ends on the closest Saturday to December 31 of
each year.

         9.06 Margin Regulations. The Company shall not use the proceeds of any
Loan in violation of Regulation T, U or X of the Board of Governors of the
Federal Reserve System.

         9.07 Negative Pledges, Etc. The Company shall not, and shall not permit
any Restricted Subsidiary to, enter into any agreement prohibiting compliance by
the Company with the provisions of the introduction to Section 9.01 or
restricting the ability of the Company or any other Loan Party to amend or
otherwise modify this Agreement or any other Loan Document.

         9.08 Leverage Ratio. The Company shall not permit the ratio of (a)
Funded Indebtedness on the last day of any fiscal quarter to (b) EBITDA for the
Measurement Period ending on such date (in each case calculated on a
consolidated basis for the Company and its consolidated Subsidiaries) to be
greater than 4.50 to 1.00.

                                   ARTICLE 10
                                EVENTS OF DEFAULT

         10.01 Events of Default. The term "Event of Default" shall mean any of
the events set forth in this Section 10.01.

         (a) Non-Payment. The Company shall (i) fail to pay any principal of any
Loan when the same shall become due and payable; or (ii) fail to pay any
interest on any Loan or fail to pay any fee due under this Agreement within
three Business Days after the same shall become due and payable; or

                                      -54
<PAGE>

         (b) Representations and Warranties. Any representation or warranty made
by the Company in this Agreement or by any Loan Party in any other Loan Document
or in any certificate, document or financial or other statement delivered at any
time under or in connection with this Agreement or any other Loan Document shall
prove to have been incorrect or untrue in any material respect when made or
deemed made; or

         (c) Specific Defaults. The Company shall fail to perform or observe any
term, covenant or agreement contained in Sections 8.01, 8.05, 8.06 or 8.10(a) or
Article 9; or

         (d) Other Defaults. The Company shall fail to perform or observe any
other term or covenant contained in this Agreement or any Loan Party shall fail
to perform any other term or covenant in any other Loan Document, and such
Default shall continue unremedied for a period of 30 days after the date upon
which written notice thereof shall have been given to the Company by the Agent;
or

         (e) Default under Other Agreements. Any default shall occur and be
continuing under the terms applicable to:

              (i) any Funded Indebtedness or any Indebtedness or items of
         Indebtedness of the Company or any of its Subsidiaries (other than
         under this Agreement or any other Loan Document) which Funded
         Indebtedness or Indebtedness, as the case may be, has an aggregate
         outstanding principal amount of $75,000,000 or more, or

              (ii) under one or more Swap Contracts of the Company or any of its
         Subsidiaries resulting in aggregate Swap Termination Values of the
         Company and its Subsidiaries of $75,000,000 or more and,

in either of the above cases, such default shall:

                   (A) consist of the failure to pay such Indebtedness or such
              net obligations when due (whether at scheduled maturity, upon
              early termination, by required prepayment, acceleration, demand or
              otherwise) after giving effect to any applicable grace period; or

                   (B) result in, or continue unremedied and unwaived for a
              period of time sufficient to permit, the acceleration of such
              Indebtedness or the early termination of any such Swap Contract;
              or

         (f) Bankruptcy or Insolvency. The Company or any Restricted Subsidiary
shall:

              (i) generally fail to pay, or admit in writing its inability to
         pay, its debts as they become due;

              (ii) commence a voluntary case or other proceeding seeking
         liquidation, reorganization or other relief with respect to itself or
         its debts under any bankruptcy, insolvency or other similar law now or
         hereafter in effect;

              (iii) seek the appointment of a trustee, receiver, liquidator,
         custodian or other similar official of it or any substantial part of
         its property or consent to any such relief or to the appointment of or
         taking possession by any such official in an involuntary case or other
         proceeding commenced against it;

                                      -55
<PAGE>

              (iv) make a general assignment for the benefit of creditors; or

              (v) take any corporate action to authorize any of the foregoing;
         or

         (g) Involuntary Proceedings. An involuntary case or other proceeding
shall be commenced against the Company or any Restricted Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any-substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Company
or any Restricted Subsidiary under the federal bankruptcy laws as now or
hereafter in effect; or

         (h) Monetary Judgments. One or more judgments or orders for the payment
of money exceeding in the aggregate $75,000,000 shall be rendered against the
Company or any of its Subsidiaries and either (i) enforcement proceedings shall
have been initiated by any creditor upon such judgment or order or (ii) such
judgment or order shall continue unsatisfied or unstayed for a period of 30
days; or

         (i) Pension Plans. Any of the following events shall occur with respect
to any Pension Plan:

              (i) the institution of any steps by the Company, any member of its
         Controlled Group or any other Person to terminate a Pension Plan if, as
         a result of such termination, the Company or any such member could
         reasonably expect to be required to make a contribution to such Pension
         Plan, or could reasonably expect to incur a liability or obligation to
         such Pension Plan or the PBGC, in excess of $75,000,000; or

              (ii) a contribution failure occurs with respect to any Pension
         Plan which gives rise to a Lien under Section 302(f) of ERISA with
         respect to a liability or obligation in excess of $75,000,000; or

         (j) Change in Control. The acquisition by any Person or group (within
the meaning of Rule 13d-5 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of either (i)
33-1/3% or more of the outstanding shares of voting stock of the Company or (ii)
the power to direct or cause the direction of the management and policies of the
Company, whether through the ownership of voting securities, by contract or
otherwise; or

         (k) Impairment of Certain Documents. Except as otherwise expressly
permitted in any Loan Document, any of the Loan Documents shall terminate or
cease in whole or in part to be the legally valid, binding, and enforceable
obligation of the relevant Loan Party, or such Loan Party or any Person acting
for or on behalf of any Loan Party, contests such validity, binding effect or
enforceability, or purports to revoke any Loan Document; or

         (l) North American Timber Agreement. An "Event of Default" shall exist
as defined in the North American Timber Agreement.

                                      -56
<PAGE>

         10.02 Remedies. If any Event of Default shall have occurred and be
continuing:

         (a) The Agent shall at the request of, or may with the consent of, the
Required Lenders, declare the Commitments and the commitment of the Issuing Bank
to Issue Letters of Credit to be terminated, whereupon the Commitments and such
commitment shall forthwith be terminated; and/or

         (b) The Agent shall at the request of, and may with the consent of, the
Required Lenders, declare an amount equal to the maximum aggregate amount that
is or at any time thereafter may become available for drawing under any
outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, which amount the Company shall immediately Cash Collateralize in
full, and declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon and all other Obligations payable hereunder
or under any other Loan Document to be immediately due and payable, whereupon
the Loans, all such interest and all such Obligations shall become and be
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Company; and/or

         (c) The Agent shall at the request of, and may with the consent of, the
Required Lenders, exercise all rights and remedies available to it as Agent
under any Loan Document;

provided, however, that upon the occurrence of any Event of Default specified in
Section 10.01(f)(ii) or Section 10.01(g) or in the event of an actual or deemed
entry of an order for relief with respect to the Company or any of its
Subsidiaries under any bankruptcy, insolvency or other similar law now or
hereafter in effect, the Commitments and the commitment of the Issuing Bank to
Issue Letters of Credit shall automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest accrued thereon and all other
Obligations shall automatically become due and payable without further action of
the Agent or any Lender.

                                   ARTICLE 11
                                    THE AGENT

         11.01 Appointment. Each Lender hereby irrevocably appoints, designates
and authorizes the Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities except those expressly set forth
herein or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent. Without limiting the generality of the foregoing sentence, the use of the
term "agent" in this Agreement with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.

         The Issuing Bank shall act on behalf of the Lenders with respect to any
Letters of Credit Issued by it and the documents associated therewith until such
time and except for so long as the Agent may agree at the request of the
Required Lenders to act for such Issuing Bank with respect thereto; provided,
however, that the Issuing Bank shall have all of the benefits and immunities (i)
provided to the Agent in

                                      -57
<PAGE>

this Article 11 with respect to any acts taken or omissions suffered by the
Issuing Bank in connection with Letters of Credit Issued by it or proposed to be
Issued by it and the application and agreements for letters of credit pertaining
to the Letters of Credit as fully as if the term "Agent", as used in this
Article 11, included the Issuing Bank with respect to such acts or omissions,
and (ii) as additionally provided in this Agreement with respect to the Issuing
Bank.

         11.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through its employees,
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.

         11.03 Liability of Agent. None of the Agent-Related Persons shall be
(a) liable for any action taken or omitted to be taken by any of them under or
in connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct) or (b) responsible in any manner to any
of the Lenders for any recital, statement, representation or warranty made by
the Company or any of its officers contained in this Agreement or by any Loan
Party or any officer of any thereof in any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value of any collateral or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of the Company or any other Loan
Party to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document or to inspect the
properties, books or records of the Company or any of its Subsidiaries.

         11.04 Reliance by Agent.

         (a) The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, facsimile, or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon any advice and
statements of legal counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Except to the extent expressly provided in
Section 12.02, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or the consent of the Required Lenders and such
request or consent and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans or any
portion thereof.

         (b) For purposes of determining compliance with the conditions
specified in Sections 7.01 and 7.02, each Lender shall be deemed to have
consented to, approved or accepted or to be satisfied with each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to the Lenders unless an officer of the Agent responsible for
the transactions contemplated by the Loan Documents shall have received notice
from such Lender prior to the initial Borrowing specifying its objection thereto
and either such objection shall not have been withdrawn by notice to the Agent
to that effect or such Lender shall not have made available to the Agent such
Lender's Commitment Percentage of such Borrowing.

                                      -58
<PAGE>

         11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees payable
to the Agent for the account of the Lenders, unless the Agent shall have
received notice from a Lender or the Company referring to this Agreement or any
other Loan Document, describing such Default or Event of Default and stating
that such notice is a "notice of default". In the event that the Agent receives
such a notice, the Agent shall give notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be requested by the Required Lenders in accordance with Article 10; provided,
however, that unless and until the Agent shall have received any such request
from the Required Lenders, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.

         11.06 Credit Decision. Each Lender expressly acknowledges that no
Agent-Related Person has made any representation or warranty to it and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
properties, operations or condition, financial or otherwise, and
creditworthiness of the Company and its Subsidiaries and made its own decision
to enter into this Agreement and extend credit to the Company hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, properties, operations or condition, financial or
otherwise, and creditworthiness of the Company and its Subsidiaries. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, no Agent-Related Person shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, prospects, properties, operations or condition,
financial or otherwise, and creditworthiness of the Company and its Subsidiaries
which may come into the possession of any Agent-Related Person.

         11.07 Indemnification. The Lenders agree to indemnify the Agent-Related
Person (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), ratably according to the
respective amounts of their outstanding Loans, or, if no Loans are outstanding,
their Commitments, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind whatsoever which may at any time (including at any
time after the repayment of the Loans and all other Obligations) be imposed on,
incurred by or asserted against any Agent-Related Person in any way relating to
or arising out of this Agreement or any other Loan Document or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any
Agent-Related Person under or in connection with any of the foregoing; provided,
however, that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from any Agent-Related Person's gross negligence or willful misconduct.
Without limiting the generality of the foregoing, each Lender agrees to
reimburse the Agent-Related Persons promptly upon demand for its ratable share
of any out-of-pocket expenses and reasonable fees of counsel (including the
allocated cost of in-house counsel) incurred by the Agent-Related Person in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiation, legal
proceedings or otherwise) of, or legal advice in respect

                                      -59
<PAGE>

of its or the Lenders' rights or responsibilities under, this Agreement, any
other Loan Document or any document contemplated by or referred to herein to the
extent that any Agent-Related Person is not reimbursed for such expenses by or
on behalf of the Company.

         11.08 Agent in Individual Capacity. Bank of America and its Affiliates
may make loans to, issue, amend, renew (or participate in) letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory or other business with
the Company and its Subsidiaries and their respective Affiliates as though Bank
of America were not the Agent hereunder. With respect to its Loans, Bank of
America shall have the same rights and powers under this Agreement as any Lender
and may exercise the same as though it were not the Agent or the Issuing Bank,
and the terms "Lender" and "Lenders" shall include Bank of America in its
individual capacity.

         11.09 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Company and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent
which shall be a commercial bank organized, chartered or licensed under the laws
of the United States of America or of any State thereof having combined capital
and surplus of at least $500,000,000. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment
within 30 days after the notice of resignation or the removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders, with the consent
of the Company which consent shall not be unreasonably withheld or delayed,
appoint a successor Agent, which shall be a commercial bank organized or
chartered under the laws of the United States of America or of any State thereof
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its future duties and obligations under this Agreement and the
other Loan Documents. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article 11 and Sections 12.04 and
12.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement and the other Loan Documents.
Notwithstanding the foregoing, however, Bank of America may not be removed as
the Agent at the request of the Required Lenders unless Bank of America shall
also simultaneously be replaced as "Issuing Bank" hereunder pursuant to
documentation in form and substance reasonably satisfactory to Bank of America.

         11.10 Documentation, Co-Syndication, Managing Agents. None of the
Lenders identified on the facing page or signature pages of this Agreement as a
"Documentation Agent," "Co-Syndication Agent," or "Managing Agent" shall have
any right, power, obligation, liability, responsibility, or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, none of the Lenders so identified as "Documentation Agent,"
"Co-Syndication Agent," or "Managing Agent" shall have or be deemed to have any
fiduciary relationship with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.

                                   ARTICLE 12
                                  MISCELLANEOUS

         12.01 Notices, Etc. All notices, requests and other communications
provided to any party under this Agreement shall, except as otherwise expressly
specified herein, be in writing (including by facsimile) and mailed by overnight
delivery, transmitted by facsimile or delivered: if to the Company, to

                                      -60
<PAGE>

its address specified on the signature pages hereof; if to any Lender, to its
Domestic Lending Office specified opposite its name on Schedule 1.01(b); and, if
to the Agent, to its address specified on the signature pages hereof; or, as to
the Company or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Company and the Agent. All such notices and communications shall be
effective, if transmitted by facsimile, when transmitted, or, if mailed by
overnight delivery or delivered, upon delivery, except that (a) notices and
facsimile communications to the Agent pursuant to Articles 2 or 11 shall not be
effective until received by the Agent, (b) any notice by facsimile to the Agent
must be confirmed by telephone or mail, and (c) notices pursuant to Article 3 to
the Issuing Bank shall not be effective until actually received by the Issuing
Bank at the address specified for the "Issuing Bank" on the applicable signature
page hereof.

         12.02 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or of any other Loan Document, and no consent to any departure by the
Company or any other Loan Party herefrom or therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required Lenders
and, in the case of amendments, the Company, and then any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that

         (a) no amendment, waiver or consent shall, unless in writing and signed
by all the Lenders and, in the case of amendments, the Company, do any of the
following:

              (i) increase the Commitments of the Lenders (other than by
         assignment); provided, however, that any Lender may increase its own
         Commitment without the consent of the other Lenders;

              (ii) reduce the principal of, or interest (other than under
         Section 2.10) on, the Committed Loans or reduce the amount of any fees
         payable hereunder;

              (iii) postpone any date fixed for any payment of principal of, or
         interest on, the Committed Loans or any fees payable hereunder;

              (iv) modify any requirement hereunder that any particular action
         be taken by all of the Lenders or by the Required Lenders or change the
         percentage of the Commitments or of the aggregate unpaid principal
         amount of the Loans which shall be required for the Lenders or any of
         them to take any action hereunder;

              (v) terminate the Subsidiary Guaranty and/or the Contribution
         Agreement;

              (vi) amend or waive the provisions of Sections 7.01 or 7.02; or

              (vii) amend this Section 12.02;

         (b) no amendment, waiver or consent which affects the rights or duties
of the Agent under this Agreement or any other Loan Document shall become
effective unless signed by the Agent in addition to the Required Lenders or all
the Lenders, as the case may be;

         (c) No amendment, waiver or consent which affect the rights or duties
of the Issuing Bank under the Agreement or any L/C-Related Document relating to
any Letter of Credit Issued or to be Issued

                                      -61
<PAGE>

by it shall become effective unless signed by the Issuing Bank in addition to
the Required Lenders or all the Lenders, as the case may be; and

         (d) no amendment, waiver or consent which affects the principal amount,
the rate of interest or the maturity date of any outstanding Bid Loan shall
become effective without the consent of the Agent and the Lender having made
such Bid Loan in addition to the Required Lenders or all the Lenders, as the
case may be.

         12.03 No Waiver; Remedies. No failure on the part of any Lender or the
Agent to exercise, and no delay in exercising, any right, remedy, power or
privilege hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, remedy,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

         12.04 Costs and Expenses. The Company agrees to pay on demand:

         (a) all out-of-pocket costs and expenses incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents and any other document to be
delivered hereunder or thereunder or in connection with the transactions
contemplated hereby or thereby, including the out-of-pocket expenses and
reasonable fees of counsel for the Agent (including local counsel which may be
retained by the Agent and the allocated cost of in-house counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Loan Documents;

         (b) all out-of-pocket costs and expenses incurred by the Agent or any
Lender in connection with the preservation of any rights under any Loan Document
or in connection with any restructuring or "work-out" of any of the Obligations
(whether through negotiations, legal proceedings or otherwise), including the
out-of-pocket expenses and reasonable fees of counsel for the Agent (including
the allocated cost of in-house counsel);

         (c) all out-of-pocket costs and expenses incurred by the Agent or any
Lender in connection with the enforcement of any of the Obligations, including
the out-of-pocket expenses and reasonable fees of counsel for the Agent or such
Lender (including the allocated cost of in-house counsel);

         (d) all out-of-pocket costs and expenses incurred by the Agent in
connection with due diligence, transportation, use of computers, duplication,
search reports and all filing and recording fees; and

         (e) to each Lender being replaced pursuant to Section 5.09, the
reasonable out-of-pocket expenses and reasonable fees of counsel (including the
allocated cost of in-house counsel) not exceeding $5,000 in connection with such
replacement.

         12.05 Indemnity.

         (a) The Company agrees to indemnify and hold harmless the Agent-Related
Persons, and each Lender and each of their Affiliates and all directors,
officers, employees, agents and advisors of all of the foregoing (each, an
"Indemnified Party") from and against any and all claims, actions, proceedings,
suits, damages, losses, liabilities, costs, expenses and disbursements,
including the out-of-pocket expenses and reasonable fees of counsel (including
the allocated cost of in-house counsel) which may be incurred

                                      -62
<PAGE>

by or asserted against any Indemnified Party as a result of any investigation,
litigation, suit, action or proceeding (regardless of whether an Indemnified
Party is a party thereto) arising out of, relating to, or in connection with
this Agreement, any other Loan Document or any transaction or proposed
transaction (whether or not consummated) financed or to be financed, in whole or
in part, directly or indirectly, with the proceeds of any Borrowing (other than
costs of the type covered by Section 12.04) or any other transaction
contemplated hereby; except to the extent such claim, damage, loss, liability,
cost or expense has resulted primarily from such Indemnified Party's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction. Notwithstanding any other provision contained in this
Agreement, this indemnity shall not be limited in any way by the passage of time
or the occurrence of any event.

         (b) The Agent, the Arranger and each Lender agree that if any
investigation, litigation, suit, action or proceeding is asserted or threatened
in writing or instituted against it or any other Indemnified Party, or any
remedial, removal or response action is requested of it or any other Indemnified
Party, for which the Agent, the Arranger or any Lender may desire indemnity or
defense hereunder, the Agent, the Arranger or such Lender shall promptly notify
the Company thereof in writing and agree, to the extent appropriate, to consult
with the Company with a view to minimizing the cost to the Company of its
obligations under this Section 12.05. The Company will not be required to pay
the fees and expenses of more than one counsel for the Indemnified Parties
unless the employment of separate counsel has been authorized by the Company, or
unless any Indemnified Party reasonably concludes that there may be defenses
available to it which are not available to the other Indemnified Parties or that
there is a conflict between its interests and those of the other Indemnified
Parties.

         (c) No action taken by legal counsel chosen by the Agent, the Arranger
or any Lender in defending against any such investigation, litigation, suit,
action or proceeding or requested remedial, removal or response action shall
vitiate or in any way impair the obligations and duties of the Company hereunder
to indemnify and hold harmless each Indemnified Party; provided, however, that
if the Company is required to indemnify any Indemnified Party pursuant hereto,
neither the Agent nor the Arranger nor any Lender will settle or compromise any
such investigation, litigation, suit, action or proceeding without the prior
written consent of the Company (which consent shall not be unreasonably withheld
or delayed) so long as the Company has provided evidence reasonably satisfactory
to the Agent, the Arranger or such Lender that the Company and its Subsidiaries
on a consolidated basis do not at such time have a negative Net Worth.

         12.06 Right of Set-off. Upon the occurrence and during the continuation
of any Event of Default, each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits in whatever currency (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Company against any
and all of the Obligations, whether or not such Lender shall have made any
demand under this Agreement. Each Lender agrees promptly to notify the Company
after any such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section 12.06 are
in addition to any other right or remedy (including any other right of set-off)
which such Lender may have under applicable law or under any Loan Document.

         12.07 Binding Effect. This Agreement shall become effective when a
counterpart hereof shall have been executed by the Agent and counterparts hereof
executed by the Company and each Lender shall have been received by the Agent
and notice thereof shall have been given by the Agent to the other parties
hereto and thereafter shall be binding upon and inure to the benefit of the
Company, the Agent and

                                      -63
<PAGE>

each Lender and their respective successors and assigns; provided, however, that
(a) except as permitted under clause (b)(ii) of Section 9.03, the Company may
not assign or transfer its rights or obligations hereunder without the prior
written consent of all the Lenders and (b) the rights of assignment and transfer
of the rights and obligations of the Lenders hereunder are subject to the
provisions of Section 12.08.

         12.08 Assignments, Participations, Etc.

         (a) Subject to Sections 12.08(b) and 12.08(e):

              (i) Any Lender may with the prior consent of the Company, the
         Agent, and the Issuing Bank (which consents will not be unreasonably
         withheld and which consent of the Company shall not be required if a
         Default or Event of Default exists) at any time assign to one or more
         Eligible Assignees all or any fraction of its Commitment and
         outstanding Committed Loans in a minimum amount of $25,000,000 and in
         multiples of $1,000,000 in excess thereof or, if its Commitment is less
         than $25,000,000, in the amount of its Commitment.

              (ii) Any Lender may without the prior consent of the Company
         assign to another Lender all or any fraction of its Commitment and
         outstanding Committed Loans in a minimum amount of $5,000,000 and in
         multiples of $1,000,000 in excess thereof or, if the Commitment is less
         than $5,000,000, in the amount of its Commitment.

              (iii) Any Lender may at any time assign all or any portion of its
         rights under this Agreement and any note issued pursuant to Section
         2.05 to a Federal Reserve Bank; provided, however, that no such
         assignment shall release any Lender from its obligations hereunder.

              (iv) Any Lender, if so requested by the Company under Section
         5.09, shall assign to another Eligible Assignee its entire Commitment
         and all outstanding Committed Loans.

              (v) Except as provided in Section 12.08(a)(iii), no Lender may
         assign any Bid Loans made by it hereunder except to another Lender or
         to any other Person to which it is also assigning all or a fraction of
         its Commitment and outstanding Committed Loans pursuant to Section
         12.08(a)(i).

         (b) No assignment shall become effective, and the Company and the Agent
shall be entitled to continue to deal solely and directly with each Lender in
connection with the interests so assigned by such Lender to an Assignee, until
(i) such Lender and such Assignee shall have executed an Assignment and
Assumption Agreement substantially in the form of Exhibit 12.08(b) and written
notice of such assignment, payment instructions, addresses, and related
information with respect to such Assignee shall have been given to the Company
and the Agent by such Lender and such Assignee, in substantially the form of
Attachment A to Exhibit 12.08 (a "Notice of Assignment"); (ii) a processing fee
in the amount of $3,500 shall have been paid to the Agent by the assignor Lender
or the Assignee; and (iii) either (A) five Business Days shall have elapsed
after receipt by the Agent of the items referred to in clauses (i) and (ii) or
(B) if earlier, the Agent has notified the assignor Lender and the Assignee of
its receipt of the items mentioned in clauses (i) and (ii) and that it has
acknowledged the assignment by countersigning the Notice of Assignment.

         (c) From and after the effective date of any assignment hereunder, (i)
the Assignee thereunder shall be deemed automatically to have become a party
hereto and, to the extent that rights

                                      -64
<PAGE>
and obligations hereunder have been assigned to such Assignee by the assignor
Lender, shall have the rights and obligations of a Lender hereunder and under
each other Loan Document, and (ii) the assignor Lender, to the extent that
rights and obligations hereunder have been assigned by it to the Assignee, shall
be released from its future obligations hereunder and under each other Loan
Document.

         (d) Subject to Section 12.08(e), any Lender may at any time sell to one
or more financial institutions or other Persons (each of such Persons being
herein called a "Participant") participating interests in any of the Loans, its
Commitment or other interests of such Lender hereunder; provided, however, that

              (i) no participation contemplated in this Section 12.08(d) shall
         relieve such Lender from its Commitment or its other obligations
         hereunder or under any other Loan Document;

              (ii) such Lender shall remain solely responsible for the
         performance of its Commitment and such other obligations;

              (iii) the Company, the Agent, and the Issuing Bank shall continue
         to deal solely and directly with such Lender in connection with such
         Lender's rights and obligations under this Agreement and each other
         Loan Document; and

              (iv) no Participant, unless such Participant is an Affiliate of
         such Lender, shall be entitled to require such Lender to take or
         refrain from taking any action hereunder or under any other Loan
         Document, except that such Lender may agree with any Participant that
         such Lender will not, without such Participant's consent, take any
         action of the type described in Section 12.02.

         The Company acknowledges and agrees that each Participant, for purposes
of Sections 4.05, 4.06, 5.02, 5.03, 5.05, 5.06 or 12.06, shall be considered a
Lender; provided, however, that for purposes of Sections 4.05, 5.02, 5.03, 5.05
and 5.06, no Participant shall be entitled to receive any payment or
compensation in excess of that to which such Participant's selling Lender would
have been entitled with respect to the amount of such Participant's
participation interest if such Lender had not sold such participation interest.

         (e) No assignment (other than an assignment made pursuant to Section
12.08(a)(iii)) or participation of any Committed Loans, or Commitments shall be
effective, and shall instead be null and void, unless it represents an
assignment of or participation in identical percentages of a Lender's
outstanding Tranche A Loans, Tranche B Loans, Tranche A Commitment, Tranche B
Commitment, "Tranche A Loans," "Tranche B Loans," "Tranche A Commitment" and
"Tranche B Commitment" (as those quoted terms are defined in the North American
Timber Agreement).

         12.09 Confidentiality. Each Lender agrees that all nonpublic
information provided to it by the Company or by the Agent on behalf of the
Company in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby or thereby will be held and treated by such
Lender, its agents, directors, Affiliates, officers and employees in confidence
and further agrees and undertakes that neither it nor any of its Affiliates
shall use any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement or relating to other
business transactions between the Company and such Lender. Any Lender may
disclose such information (a) at the request of any bank regulatory authority or
in connection with an examination of such Lender by any such authority or
examiner; (b) pursuant to subpoena or other court process; (c) when required to
do so in

                                      -65
<PAGE>

accordance with the provisions of any applicable law; (d) at the written request
or the express direction of any other agency of any State of the United States
of America or of any other jurisdiction in which such Lender conducts its
business; and (e) to such Lender's independent auditors, counsel and other
professional advisors. Notwithstanding the foregoing, the Company authorizes
each Lender to disclose to any Participant or Assignee and any prospective
Participant or Assignee such financial and other information in such Lender's
possession concerning the Company or its Subsidiaries which has been delivered
to the Lenders pursuant to this Agreement or any other Loan Document or which
has been delivered to the Lenders by the Company in connection with the Lenders'
credit evaluation of the Company and its Subsidiaries prior to entering into
this Agreement; provided that such Participant or Assignee or prospective
Participant or Assignee agrees in writing to such Lender to keep such
information confidential to the same extent as required of the Lenders
hereunder.

         12.10 Survival. The obligations of the Company under Sections 4.05,
5.02, 5.03, 5.05, 5.06, 12.04 and 12.05, and the obligations of the Lenders
under Sections 4.05(i) and 11.07, shall in each case survive the repayment of
the Loans and all other Obligations and the termination of this Agreement and
the Commitments; provided, however, that no request for reimbursement pursuant
to such Sections (other than Sections 12.04(b) and (c) and 12.05) may be made
more than six months after the termination of this Agreement and the
Commitments. The representations and warranties made by the Company in this
Agreement and by each Loan Party in each other Loan Document shall survive the
execution and delivery of this Agreement and such other Loan Document.

         12.11 Severability. Any provision of this Agreement or any other Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

         12.12 Headings. The various headings of this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.

         12.13 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Lenders, the
Agent and the Agent-Related Persons, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.

         12.14 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         12.15 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.

         12.16 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE COMPANY, THE LENDERS AND
THE AGENT AND SUPERSEDE ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS AND
UNDERSTANDINGS OF SUCH PERSONS, VERBAL OR WRITTEN, RELATING TO THE SUBJECT
MATTER HEREOF EXCEPT FOR THE FEE LETTER AND ANY PRIOR ARRANGEMENTS MADE WITH
RESPECT TO THE PAYMENT

                                      -66
<PAGE>

BY THE COMPANY OF (OR ANY INDEMNIFICATION FOR) ANY FEES, COSTS OR EXPENSES
PAYABLE TO OR INCURRED (OR TO BE INCURRED) BY OR ON BEHALF OF THE AGENT OR THE
LENDERS.

         12.17 WAIVER OF JURY TRIAL. EACH OF THE AGENT, THE LENDERS AND THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING
INTO THIS AGREEMENT.

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

                                       GEORGIA-PACIFIC CORPORATION

                                       By:  /s/Danny W. Huff
                                       Name:
                                       Title:  Vice President and Treasurer

                                       BANK OF AMERICA NATIONAL TRUST AND
                                       SAVINGS ASSOCIATION,
                                       as Agent, Issuing Bank, and as Lender

                                       By:  /s/Michael Balok
                                       Name:
                                       Title:  Managing Director

                                       COMMERZBANK AG,
                                       NEW YORK BRANCH,
                                       as Documentation Agent

                                       By:  /s/Harry P. Yergey
                                       Name:
                                       Title:  SVP & Manager

                                       By:  /s/Brian J. Campbell
                                       Name:
                                       Title:  Vice President

                                      -67
<PAGE>

                                       THE CHASE MANHATTAN BANK,
                                       as Co-Syndication Agent

                                       By:  /s/ Peter S. Predun
                                       Name:
                                       Title:  Vice President

                                       CITIBANK, N.A.,
                                       as Co-Syndication Agent

                                       By:  /s/David L. Harris
                                       Name:
                                       Title:  Vice President

                                       THE BANK OF NEW YORK,
                                       as Managing Agent

                                       By:  /s/David C. Siegel
                                       Name:
                                       Title:  Vice President

                                       BANK OF TOKYO-MITSUBISHI TRUST COMPANY

                                       By:  /s/M. R. Marron
                                       Name:
                                       Title:  Vice President & Manager

                                       CIBC INC.

                                       By:  /s/Nora Q. Catiis
                                       Name:
                                       Title:  Executive Director
                                               CIBC World Markets Corp. As Agent

                                       FIRST NATIONAL BANK OF CHICAGO,
                                       as Managing Agent

                                      -68
<PAGE>

                                       By:  /s/David T. McNeela
                                       Name:
                                       Title:  Vice President

                                       HSBC BANK USA,
                                       as Managing Agent

                                       By:  /s/Jeremy P. Bollington
                                       Name:
                                       Title:  Vice President

                                       THE SANWA BANK, LIMITED, NEW YORK BRANCH

                                       By:  /s/Masahito Okubo
                                       Name:
                                       Title:  Vice President

                                       THE SUMITOMO BANK, LIMITED

                                       By:  /s/C. Michael Garrido
                                       Name:
                                       Title:  Senior Vice President

                                       SUNTRUST BANK, ATLANTA,
                                       as Managing Agent

                                       By:  /s/W. David Wisdom
                                       Name:
                                       Title:  Vice President

                                       TORONTO DOMINION (TEXAS), INC.,
                                       as Managing Agent

                                       By:  /s/Sheila M. Conley
                                       Name:
                                       Title:  Vice President

                                      -69
<PAGE>

                                       UBS AG, STAMFORD BRANCH,
                                       as Managing Agent

                                       By:  /s/Paul R. Morrison
                                       Name:
                                       Title:  Executive Director

                                       By:  /s/Andrew N. Taylor
                                       Name:
                                       Title:  Associate Director

                                       WACHOVIA BANK NA,
                                       as Managing Agent

                                       By:  /s/Anne L. Sayles
                                       Name:
                                       Title:  Vice President

                                      -70

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