EXHIBIT 10.2
June 20, 2002
S & H Verwaltungs-gesellschaft mbH
c/o P.H. Glatfelter Company
96 South George St., Suite 500
York, PA 17401 USA
Attn: Mr. Jack Anke
Phone no.: 717-225-2729
Fax no: 717-846-2419
Subject: CONFIRMATION OF TRANSACTION DATED AS OF JUNE 20, 2002 BETWEEN S & H
VERWALTUNGS-GESELLSCHAFT MBH ("S & H") AND PNC BANK, NATIONAL
ASSOCIATION ("PNC")
Dear Mr. Anke:
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction (the "Transaction") entered into between S & H
Verwaltungs-gesellschaft mbH ("S & H") and PNC Bank, National Association
("PNC") on the Trade Date specified below. This letter constitutes a
"Confirmation" as referred to in the ISDA Master Agreement (the "Master
Agreement") specified below.
1. The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) and any
addenda or revisions thereto, are incorporated into this Confirmation. In the
event of any inconsistency between those definitions and provisions and this
Confirmation, this Confirmation will govern.
2. If S & H and PNC are parties to an ISDA Master Agreement that sets forth the
general terms and conditions applicable to transactions between S & H and PNC (a
"Master Agreement"), this Confirmation supplements, forms a part of, and is
subject to, such Master Agreement. If S & H and PNC are not yet parties to a
Master Agreement, this Confirmation will supplement, form a part of, and be
subject to, a Master Agreement upon its execution by S & H and PNC. All
provisions contained or incorporated by reference in such Master Agreement shall
govern this Confirmation, except as modified expressly below. In addition, if a
Master Agreement has not been executed, this Confirmation will itself evidence a
complete binding agreement between S & H and PNC as to the terms and conditions
of the Transaction to which this Confirmation relates.
3. Each party represents and warrants to agree with the other party as follows:
(a) Such party is fully informed of and capable of evaluating, and has
evaluated, the potential financial benefits and risks, the tax and
accounting implications, the appropriateness in light of its individual
financial circumstances, business affairs, and risk management
capabilities, and the conformity to its policies and objectives, of this
Transaction.
(b) Such party has entered into this Transaction in reliance only upon its own
judgment. Neither party holds itself out as advising, or any of its
employees or agents as having the authority to advise, the other party as
to whether or not it should enter into this Transaction, and neither party
shall have any liability whatsoever in respect of any advice of such
nature given, or views expressed, by it or any such persons to the other
party, whether or not such advice is given or such views are expressed at
the request of the other party.
(c) Such party has entered into this Transaction for purposes of hedging and
not for the purpose of speculation.
June 20, 2002
Page 2
(d) S & H hereby agrees that it shall deliver to PNC prior to August 24, 2002:
(I) an ISDA Master Agreement and related Schedule with PNC in form and
substance acceptable to PNC (collectively, the "ISDA Agreement"), and (ii)
certain security and/or guaranty agreements, in form and substance
acceptable to PNC, which shall secure this Transaction and ISDA agreement
on a first priority, pari passu basis with other credit obligations
entered into or to be entered into between S & H and PNC. Failure to
execute and deliver the ISDA Agreement by August 24, 2002 shall constitute
and Additional Termination Event under ISDA Agreement (whether or not
executed as of such date), and PNC shall have all rights and remedies with
respect to such Termination Event as provided in the ISDA Agreement,
including, without limitation, the right to terminate this Transaction and
to receive payment in respect of such termination.
4. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Cross Currency Interest Rate Swap Transaction (Principal is
exchanged at the beginning and end)
Trade Date: June 20, 2002
Effective Date: June 24, 2002
Termination Date: June 26, 2006 subject to adjustment in accordance with the
Modified Following Business Day convention
FLOATING AMOUNTS EUR:
EUR Floating Rate Payer: S & H
Floating Rate Payer
EUR Principal Amount: EUR 72,985,090.19
Payment Dates: The 24th of March, June, September and December
commencing on September 24, 2002 and ending on the
Termination Date, subject to adjustment in accordance
with the Modified Following Business Day convention.
Floating Rate for
Initial Calculation: 4.214% (3.464% + 0.750%)
Reset Dates: The 24th of March, June, September and December
commencing on June 24, 2002 and ending on March 24,
2006, subject to adjustment in accordance with the
Modified Following Business Day convention.
Floating Rate Option: EUR-LIBOR-BBA (Dow Jones 3750, previously known as Telerate Page
3750)
Designated Maturity: Three (3) Month
Spread: Plus 0.750%
Floating Rate Day
Count Fraction: Actual/360
Business Days: New York, London and Euro
June 20, 2002
Page 3
FLOATING AMOUNTS USD:
USD Floating Rate Payer: PNC
Floating Rate Payer
USD Amount: USD 70,000,000.00
Payment Dates: The 24th of March, June, September and December
commencing on September 24, 2002 and ending on the
Termination Date, subject to adjustment in accordance
with the Modified Following Business Day convention.
Floating Rate for
Initial Calculation: 2.515% (1.870% + 0.645%)
Reset Dates: The 24th of March, June, September and December
commencing on June 24, 2002 and ending on March 24,
2006, subject to adjustment in accordance with the
Modified Following Business Day convention.
Floating Rate Option: USD-LIBOR-BBA (Dow Jones 3750, previously known as Telerate Page
3750)
Designated Maturity: Three (3) Month
Spread: Plus 0.645%
Floating Rate Day
Count Fraction: Actual/360
Business Days: New York, London and Euro
INITIAL EXCHANGE:
Initial ExchangeDate: June 24, 2002
S & H pays Initial
Exchange Amount: USD 70,000,000.00
PNC pays Initial
Exchange Amount: EUR 72,985,090.19
FINAL EXCHANGE:
Final Exchange Date: June 26, 2006
S & H pays Final
Exchange Amount: EUR 72,985,090.19
PNC pays Final
Exchange Amount: USD 70,000,000.00
June 20, 2002
Page 4
Payment Instructions: USD Payments to PNC shall be made in immediately
available funds to:
PNC Bank, Pittsburgh
ABA#: 043-000-096
Acct: Investment Operations
Acct #: 196030411
Attn: Derivative Products
EUR Payments to PNC shall be made in immediately
available funds to:
Deutsche Bank, Frankfurt
Acct: PNC Bank, Pittsburgh
Acct #: 10095868760000
For credit to Investment Operations, Derivative Products
USD Payments to S & H shall be made in immediately
available funds to:
PNC Bank,Pittsburgh
Acct #: 8606078407
Acct: GLT International Finance, LLC
EUR Payments to S & H shall be made in immediately
available funds to:
Deutsche Bank
Mannheim Branch
Acct #: 10105023
Acct: S & H Verwaltungs-gesellschaft mbH
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation, returning a copy to Sue Navadauskas
via fax (412/762-8667) and returning the original to Sue Navadauskas at One PNC
Plaza - 9th Floor, 249 Fifth Avenue, Pittsburgh, PA 15222 via Overnight
delivery. Sue's phone number is (412/762-2697).
Yours sincerely, Accepted and agreed as of the
date first above written:
PNC BANK, NATIONAL ASSOCIATION S & H VERWALTUNGS-GESELLSCHAFT MBH
By:___________________________ By:__________________________________
Name: John F. Kirsch Name:
Title: Vice President Title:
PNC BANK, NATIONAL ASSOCIATION
By:________________________________
Name: James S. Bernier
Title: Vice President