TAX-EXEMPT BOND AGREEMENT
THIS TAX-EXEMPT BOND AGREEMENT (this Agreement) is made as of this 30th day of September, 2021 (the Effective Date), by and between International Paper Company, a New York corporation (International Paper), and Sylvamo North America, LLC, a Delaware limited liability company (Sylvamo).
The facilities owned by International Paper listed in Schedule A hereto (the Tax-Exempt Facilities) have been financed and/or refinanced, in whole or in part, with proceeds of the issuance and sale of the Series 2019 Bonds (as defined and listed in Schedule B hereto, the Tax-Exempt Bonds). International Paper is the obligor and borrower in respect of the Tax-Exempt Bonds. The obligations of International Paper with respect to the Tax-Exempt Bonds are contained in the agreement listed in Schedule C hereto (the Installment Sale Agreement).
The interest paid or accrued on the Tax-Exempt Bonds, with certain exceptions, is not includable in the gross income of the holders of the Tax-Exempt Bonds (the Bondholders) for purposes of federal income taxation. Pursuant to the Internal Revenue Code of 1986, as amended (collectively, the Code), the basis for the federal income tax exclusion for interest payable to the Bondholders is the use of the Tax-Exempt Facilities for certain qualified purposes.
The use of all or part of the Tax-Exempt Facilities for a purpose other than a qualifying purpose or purposes may cause (a) the interest payable on all or part of the Tax-Exempt Bonds to be includable in the federal gross income of the Bondholders possibly with retroactive effect, and/or (b) the deductibility of the interest payable by International Paper on all or part of the Tax-Exempt Bonds to be disallowed by the Code.
The parties hereto desire to enter into this Agreement to ensure that the Tax-Exempt Facilities will continue to be used in a qualifying manner as required by the Code.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto formally covenant, agree and bind themselves as follows:
Section 1. (a) Pursuant to authority granted in the Installment Sale Agreement, International Paper hereby transfers and assigns as of the Effective Date unto Sylvamo and its successors and assigns all of its right, title and interest in and to, and all remedies under, the Installment Sale Agreement, including, without limitation, the rights to any condemnation and insurance proceeds, and except for the Retained Liabilities (as hereinafter defined), Sylvamo hereby assumes as of the Effective Date all of International Papers obligations under the Installment Sale Agreement, all upon the terms and subject to the conditions set forth herein. Sylvamos assumption of International Papers obligations hereunder and under the Installment Sale Agreement are subject to any and all limitation, exclusions, conditions and non-recourse limitations set forth in the Installment Sale Agreement. Notwithstanding the foregoing, International Paper shall remain liable for (i) the payment obligations with respect to the Tax-Exempt Bonds and Administrative Expenses (as defined in the Installment Sale Agreement), including, without limitation, any amounts payable under the Indenture (as defined in the