Common use of Audit and Reporting Clause in Contracts

Audit and Reporting. (a) Company shall prepare and deliver (or shall cause to be prepared and delivered) to Member within forty-five (45) days after the end of each Fiscal Year, a report as of the end of such Fiscal Year prepared in conformity with accounting principles generally accepted in the United States and consistently applied, setting forth (i) a balance sheet of Company (that will include appropriate footnote disclosure) as of the end of such Fiscal Year, (ii) an income statement for such Fiscal Year and (iii) statements of changes in Member’s capital and changes in financial position. The annual financial statements referred to in this Section 8.2(a) shall be audited by a nationally recognized accounting firm in accordance with generally accepted auditing standards in the United States and consistently applied, and such accounting firm’s report thereon shall accompany the annual financial statements delivered to each Member; provided, that Company shall endeavor to provide such audited financial statements within the period stated above, but will not be considered to have breached this Section 8.2(a) if it fails to do so; provided, that Company (A) is using commercially reasonable efforts to produce audited financial statements within such timeframe, (B) provides unaudited financial statements within such forty-five (45) day period and (C) provides such audited financial statements as soon as practicable following such date but in any event no later than ninety (90) days after the end of such Fiscal Year. (b) After the end of each Fiscal Year, Company shall prepare and deliver (or shall cause to be prepared and delivered) within forty-five (45) days of the close of such Fiscal Year, a report setting forth in sufficient detail such transactions effected by Company during such Fiscal Year as shall enable Member to prepare its U.S. federal income tax return and shall mail such report to Member. (c) Company shall prepare and deliver (or shall cause to be prepared and delivered) to Member final versions of the following not later than forty-five (45) days after the end of each of the first three Fiscal Quarters of each Fiscal Year: (i) An unaudited report setting forth as of the end of such fiscal quarter (i) a balance sheet of Company as of the end of such Fiscal Quarter and (ii) an income statement for such Fiscal Quarter; (ii) A calculation of the reserves of Company and the amount of Base Available Cash, Net Available Cash, Distributable Cash Flow and Remaining Distributable Cash Flow and the amounts in the Cash Operating Account and the Pre-Funded Expense Account as of the end of the relevant Fiscal Quarter; (iii) A narrative describing the condition of the Property and other Business Assets and operations of Company and its Subsidiaries during such Fiscal Quarter; (iv) A report of any changes in the status of any major service contracts, any material line item variances from the Annual Budget and any litigation or other legal issues involving Company or its Subsidiaries during such Fiscal Quarter; and (v) A report providing a detailed description of each Permitted HBU Sale consummated during such Fiscal Quarter. (d) Not later than fifteen (15) Business Days after the end of each calendar month, Company shall prepare and deliver (or shall cause to be prepared and delivered) to Member a “flash report” containing the following: (i) a reconciliation of actual operating results of Company against the Annual Budget for the most recent calendar month and for the entire Fiscal Year through the end of the relevant calendar month; (ii) an update as to the amount of cash in each of the Cash Operating Account and the Pre-Funded Expense Account as of the end of the relevant calendar month; (iii) a report of any changes in the status of any major service contracts, any material line item variances from the Annual Budget and any litigation or other legal issues involving Company or its Subsidiaries during the calendar month; and (iv) a report of the recordable incident rate for employees, agents and contractors for the prior calendar month. (e) Promptly following the end of each Fiscal Quarter, but in any event no later than forty-five (45) days following the end of each Fiscal Quarter, Company shall provide (or shall cause to be provided) to Member a report containing the component amounts described in each clause of the definition of Unlevered Cash Flow, along with supporting information. Company shall provide (or shall cause to be provided) to Member such other information as is reasonably requested by such Member in respect of the foregoing report and the calculation of components set forth therein. (f) In addition to the reporting requirements set forth above, Company shall give (or shall cause to be given) notice to Member of: (i) any items that will otherwise be reportable under Section 8.2(c)(iv) promptly after Company becomes aware of the change, anticipated material variance or litigation or other legal issue, as applicable; (ii) any known or reported non-conformance with applicable state and local regulations and Sustainable Forestry Initiative standards or principles as in effect on the date hereof and as modified from time to time by Sustainable Forestry Initiative Inc.; and (iii) any proposed transaction between Company or its Subsidiaries, on one hand, and any other Person if such transaction would create a potential conflict of interest on the part of Member in causing Company (or such Subsidiaries) to enter into such transaction. (g) Company shall provide (or shall cause to be provided) to Member information regarding stand-level activity for the Property and any other Real Estate Asset that includes site preparation and treatment, planting method, stock type, planting density, thinning plan, volume removals by product class, and a detailed inventory plan, and shall include Member having access to Geographic Information Systems (GIS) data for the Property and any other Real Estate Asset. Company shall prepare, or cause to be prepared, at Company’s expense, such additional financial reports and other information as Member may reasonably determine are appropriate. Additionally, Member shall be entitled to the same information as may be provided to any provider of indebtedness to Company or its Subsidiaries.

Audit and Reporting. (a) Company The General Partner shall prepare and deliver (deliver, or shall cause to be prepared and delivered) , to Member each Partner within forty-five (45) days after the end of each Fiscal Year, a report as of the end of such Fiscal Year prepared in conformity with accounting principles generally accepted in the United States and consistently applied, setting forth (i) a balance sheet of Company the Partnership (that will include appropriate footnote disclosure) as of the end of such Fiscal Year, (ii) an income statement for such Fiscal Year and (iii) statements of changes in Member’s Partners’ capital and changes in financial position. The annual financial statements referred to in this Section 8.2(a) shall be audited by a nationally recognized accounting firm in accordance with generally accepted auditing standards in the United States and consistently applied, and such accounting firm’s report thereon shall accompany the annual financial statements delivered to each MemberPartner; provided, that Company the General Partner shall endeavor to provide such audited financial statements within the period stated above, but will not be considered to have breached this Section 8.2(a) if it fails to do so; provided, that Company the General Partner (A) is using commercially reasonable efforts diligently working to produce audited financial statements within such timeframetimeframe or as promptly thereafter as practicable, (B) provides unaudited financial statements within such forty-five (45) day period and (C) provides such audited financial statements as soon as practicable following such date but in any event no later than ninety (90) days after the end of such Fiscal Year. (b) After the end of each Fiscal Year, Company the General Partner shall prepare and deliver (deliver, or shall cause to be prepared and delivered) , within forty-five (45) days of the close of such Fiscal Year, a report setting forth in sufficient detail such transactions effected by Company the Partnership during such Fiscal Year as shall enable Member each Partner to prepare its U.S. federal income tax return and shall mail such report to Member(i) each Partner and (ii) each former Partner (or its successor or legal representative) who may require such information in preparing its U.S. federal income tax return. (c) Company The General Partner shall prepare and deliver (deliver, or shall cause to be prepared and delivered) , to Member the Partners final versions of the following not later than forty-five (45) days after the end of each of the first three Fiscal Quarters of each Fiscal Year: (i) An unaudited report setting forth as of the end of such fiscal quarter (i) a balance sheet of Company the Partnership as of the end of such Fiscal Quarter and (ii) an income statement for such Fiscal Quarter; (ii) A calculation of the reserves of Company the Partnership and the amount of (x) Base Available Cash, Net Available Cash, Cash and Distributable Cash Flow (as each such term is defined in the Subsidiary REIT Agreement) and (y) Remaining Distributable Cash Flow and the amounts in the Cash Operating Account and the Pre-Funded Expense Account as of the end of the relevant Fiscal QuarterFlow; (iii) A narrative describing the condition of the Property and other Business Assets and operations of Company the Partnership and its Subsidiaries during such Fiscal Quarter; (iv) A report of any changes in the status of any major service contracts, any material line item variances from the Annual Budget and any litigation or other legal issues involving Company the Partnership or its Subsidiaries during such Fiscal Quarter; and (v) A report providing a detailed description of each Permitted HBU Sale consummated during such Fiscal Quarter. The General Partner shall meet with the Partners on a quarterly basis to discuss the quarterly reporting and such other topics relating to the business of the Partnership and its Subsidiaries as the Partners may reasonably request. (d) Not later than fifteen (15) Business Days after the end of each calendar month, Company the General Partner shall prepare and deliver (deliver, or shall cause to be prepared and delivered) , to Member the Partners a “flash report” containing the following: (i) a reconciliation of actual operating results of Company the Partnership against the Annual Budget for the most recent calendar month and for the entire Fiscal Year through the end of the relevant calendar month; (ii) an update as to the amount of cash in each of the Cash Operating Account and the Pre-Funded Expense Account as of the end of the relevant calendar month; (iii) a report of any changes in the status of any major service contracts, any material line item variances from the Annual Budget and any litigation or other legal issues involving Company the Partnership or its Subsidiaries during the calendar month; and (iviii) a report of the recordable incident rate for employees, agents and contractors for the prior calendar month. (e) Promptly following the end of each Fiscal Quarter, but in any event no later than forty-five (45) days following the end of each Fiscal Quarter, Company the General Partner shall provide (or shall cause to be provided) to Member the other Partners a report containing the component amounts described in each clause of the definition of Unlevered Cash Flow, along with supporting information. Company The General Partner shall provide (or shall cause to be provided) to Member the other Partners such other information as is reasonably requested by such Member a Partner in respect of the foregoing report and the calculation of components set forth therein. (f) In addition to the reporting requirements set forth above, Company the General Partner shall give (or shall cause to be given) notice to Member the Partners of: (i) any items that will otherwise be reportable under Section 8.2(c)(iv) promptly after Company the General Partner becomes aware of the change, anticipated material variance or litigation or other legal issue, as applicable; (ii) any known or reported non-conformance with applicable state and local regulations and Sustainable Forestry Initiative standards or principles as in effect on the date hereof and as modified from time to time by Sustainable Forestry Initiative Inc.; and (iii) any proposed transaction between Company the Partnership or its Subsidiaries, on one hand, and any other Person if such transaction would create a potential conflict of interest on the part of Member the General Partner in causing Company the Partnership (or such Subsidiaries) to enter into such transaction, or any other occurrence in east Texas or west Louisiana that would reasonably be expected to give rise to a conflict of interest on the part of the General Partner or its Affiliates in connection with the management and operation of the business and affairs of the Partnership and its Subsidiaries. (g) Company The General Partner shall provide (or shall cause to be provided) to Member the Partners information regarding stand-level activity for the Property and any other Real Estate Asset that includes site preparation and treatment, planting method, stock type, planting density, thinning plan, volume removals by product class, and a detailed inventory plan, and shall include Member the Partners having access to Geographic Information Systems (GIS) data for the Property and any other Real Estate Asset. Company The General Partner shall prepare, or cause to be prepared, at Companythe Partnership’s expense, such additional financial reports and other information as Member the Partners may reasonably determine are appropriate. Additionally, Member each Partner shall be entitled to the same information as may be provided to the other Partners and to any provider of indebtedness to Company the Partnership or its Subsidiaries. (h) Promptly following the Closing, the General Partner will develop (or cause to be developed), and submit to the Board and Subsidiary REIT Board for approval, the following operational policies: (i) a comprehensive compliance program with respect to workplace environmental, health and safety, including policies and procedures to be distributed to employees, agents and contractors regarding workplace environmental, health and safety, (ii) a comprehensive program to be used by the General Partner to track, report and manage workplace environmental, health and safety matters, and (iii) a timeline for the Sustainable Forestry Initiative audits and recertification, as appropriate. (i) Notwithstanding anything herein to the contrary, in the event that the Asset Management Agreement is terminated pursuant to Section 12, Section 13(c) or Section 13(d) thereof, the General Partner shall cease to have any obligations under this Section 8.2.

Audit and Reporting. (a) Company shall prepare and deliver (or shall cause to be prepared and delivered) to Member within forty-five (45) days after the end of each Fiscal Year, a report as of the end of such Fiscal Year prepared in conformity with accounting principles generally accepted in the United States and consistently applied, setting forth (i) a balance sheet of Company (that will include appropriate footnote disclosure) as of the end of such Fiscal Year, (ii) an income statement for such Fiscal Year and (iii) statements of changes in Member’s capital and changes in financial position. The annual financial statements referred to in this Section 8.2(a) shall be audited by a nationally recognized accounting firm in accordance with generally accepted auditing standards in the United States and consistently applied, and such accounting firm’s report thereon shall accompany the annual financial statements delivered to each Member; provided, that Company shall endeavor to provide such audited financial statements within the period stated above, but will not be considered to have breached this Section 8.2(a) if it fails to do so; provided, that Company (A) is using commercially reasonable efforts to produce audited financial statements within such timeframe, (B) provides unaudited financial statements within such forty-five (45) day 45)-day period and (C) provides such audited financial statements as soon as practicable following such date but in any event no later than ninety (90) days after the end of such Fiscal Year. (b) After the end of each Fiscal Year, Company shall prepare and deliver (or shall cause to be prepared and delivered) ), within forty-five (45) days of the close of such Fiscal Year, a report setting forth in sufficient detail such transactions effected by Company during such Fiscal Year as shall enable Member to prepare its U.S. federal income tax return and shall mail such report to Member. (c) Company shall prepare and deliver (or shall cause to be prepared and delivered) to Member final versions of the following not later than forty-five (45) days after the end of each of the first three (3) Fiscal Quarters of each Fiscal Year: (i) An unaudited report setting forth as of the end of such fiscal quarter (i) a balance sheet of Company as of the end of such Fiscal Quarter and (ii) an income statement for such Fiscal Quarter; (ii) A calculation of the reserves of Company and the amount of Base Available Cash, Net Available Cash, Distributable Cash Flow and Remaining Distributable Cash Flow and the amounts in the Cash Operating Account and the Pre-Funded Expense Account as of the end of the relevant Fiscal Quarter; (iii) A narrative describing the condition of the Property and other Business Assets and operations of Company and its Subsidiaries during such Fiscal Quarter; (iv) A report of any changes in the status of any major service contracts, any material line item variances from the Annual Budget and any litigation or other legal issues involving Company or its Subsidiaries during such Fiscal Quarter; and (v) A report providing a detailed description of each Permitted HBU Sale consummated during such Fiscal Quarter. (d) Not later than fifteen (15) Business Days after the end of each calendar month, Company shall prepare and deliver (or shall cause to be prepared and delivered) to Member a “flash report” containing the following: (i) a reconciliation of actual operating results of Company against the Annual Budget for the most recent calendar month and for the entire Fiscal Year through the end of the relevant calendar month; (ii) an update as to the amount of cash in each of the Cash Operating Account and the Pre-Funded Expense Account as of the end of the relevant calendar month; (iii) a report of any changes in the status of any major service contracts, any material line item variances from the Annual Budget and any litigation or other legal issues involving Company or its Subsidiaries during the calendar month; and (iv) a report of the recordable incident rate for employees, agents and contractors for the prior calendar month. (e) Promptly following the end of each Fiscal Quarter, but in any event no later than forty-five (45) days following the end of each Fiscal Quarter, Company shall provide (or shall cause to be provided) to Member a report containing the component amounts described in each clause of the definition of Unlevered Cash Flow, along with supporting information. Company shall provide (or shall cause to be provided) to Member such other information as is reasonably requested by such Member in respect of the foregoing report and the calculation of components set forth therein. (f) In addition to the reporting requirements set forth above, Company shall give (or shall cause to be given) notice to Member of: (i) any items that will otherwise be reportable under Section 8.2(c)(iv) promptly after Company becomes aware of the change, anticipated material variance or litigation or other legal issue, as applicable; (ii) any known or reported non-conformance with applicable state and local regulations and Sustainable Forestry Initiative standards or principles as in effect on the date hereof Effective Date and as modified from time to time by Sustainable Forestry Initiative Inc.; and (iii) any proposed transaction between Company or its Subsidiaries, on one hand, and any other Person if such transaction would create a potential conflict of interest on the part of Member in causing Company (or such Subsidiaries) to enter into such transaction. (g) Company shall provide (or shall cause to be provided) to Member information regarding stand-level activity for the Property and any other Real Estate Asset that includes site preparation and treatment, planting method, stock type, planting density, thinning plan, volume removals by product class, and a detailed inventory plan, and shall include Member having access to Geographic Information Systems (GIS) data for the Property and any other Real Estate Asset. Company shall prepare, or cause to be prepared, at Company’s expense, such additional financial reports and other information as Member may reasonably determine are appropriate. Additionally, Member shall be entitled to the same information as may be provided to any provider of indebtedness to Company or its Subsidiaries.

Audit and Reporting. (a) Company The General Partner shall prepare and deliver (deliver, or shall cause to be prepared and delivered) , to Member each Partner within forty-five (45) days after the end of each Fiscal Year, a report as of the end of such Fiscal Year prepared in conformity with accounting principles generally accepted in the United States and consistently applied, setting forth (i) a balance sheet of Company the Partnership (that will include appropriate footnote disclosure) as of the end of such Fiscal Year, (ii) an income statement for such Fiscal Year and (iii) statements of changes in Member’s Partners’ capital and changes in financial position. The annual financial statements referred to in this Section 8.2(a) shall be audited by a nationally recognized accounting firm in accordance with generally accepted auditing standards in the United States and consistently applied, and such accounting firm’s report thereon shall accompany the annual financial statements delivered to each MemberPartner; provided, that Company the General Partner shall endeavor to provide such audited financial statements within the period stated above, but will not be considered to have breached this Section 8.2(a) if it fails to do so; provided, that Company the General Partner (A) is using commercially reasonable efforts diligently working to produce audited financial statements within such timeframetimeframe or as promptly thereafter as practicable, (B) provides unaudited financial statements within such forty-five (45) day 45)-day period and (C) provides such audited financial statements as soon as practicable following such date but in any event no later than ninety (90) days after the end of such Fiscal Year. (b) After the end of each Fiscal Year, Company the General Partner shall prepare and deliver (deliver, or shall cause to be prepared and delivered) , within forty-five (45) days of the close of such Fiscal Year, a report setting forth in sufficient detail such transactions effected by Company the Partnership during such Fiscal Year as shall enable Member each Partner to prepare its U.S. federal income tax return and shall mail such report to Member(i) each Partner and (ii) each former Partner (or its successor or legal representative) who may require such information in preparing its U.S. federal income tax return. (c) Company The General Partner shall prepare and deliver (deliver, or shall cause to be prepared and delivered) , to Member the Partners final versions of the following not later than forty-five (45) days after the end of each of the first three Fiscal Quarters of each Fiscal Year: (i) An unaudited report setting forth as of the end of such fiscal quarter (i) a balance sheet of Company the Partnership as of the end of such Fiscal Quarter and (ii) an income statement for such Fiscal Quarter; (ii) A calculation of the reserves of Company the Partnership and the amount of (x) Base Available Cash, Net Available Cash, Cash and Distributable Cash Flow (as each such term is defined in the Subsidiary REIT Agreement) and (y) Remaining Distributable Cash Flow and the amounts in the Cash Operating Account and the Pre-Funded Expense Account as of the end of the relevant Fiscal QuarterFlow; (iii) A narrative describing the condition of the Property and other Business Assets and operations of Company the Partnership and its Subsidiaries during such Fiscal Quarter; (iv) A report of any changes in the status of any major service contracts, any material line item variances from the Annual Budget and any litigation or other legal issues involving Company the Partnership or its Subsidiaries during such Fiscal Quarter; and (v) A report providing a detailed description of each Permitted HBU Sale consummated during such Fiscal Quarter. The General Partner shall meet with the Partners on a quarterly basis to discuss the quarterly reporting and such other topics relating to the business of the Partnership and its Subsidiaries as the Partners may reasonably request. (d) Not later than fifteen (15) Business Days after the end of each calendar month, Company the General Partner shall prepare and deliver (deliver, or shall cause to be prepared and delivered) , to Member the Partners a “flash report” containing the following: (i) a reconciliation of actual operating results of Company the Partnership against the Annual Budget for the most recent calendar month and for the entire Fiscal Year through the end of the relevant calendar month; (ii) an update as to the amount of cash in each of the Cash Operating Account and the Pre-Funded Expense Account as of the end of the relevant calendar month; (iii) a report of any changes in the status of any major service contracts, any material line item variances from the Annual Budget and any litigation or other legal issues involving Company the Partnership or its Subsidiaries during the calendar month; and (iviii) a report of the recordable incident rate for employees, agents and contractors for the prior calendar month. (e) Promptly following the end of each Fiscal Quarter, but in any event no later than forty-five (45) days following the end of each Fiscal Quarter, Company the General Partner shall provide (or shall cause to be provided) to Member the other Partners a report containing the component amounts described in each clause of the definition of Unlevered Cash Flow, along with supporting information. Company The General Partner shall provide (or shall cause to be provided) to Member the other Partners such other information as is reasonably requested by such Member a Partner in respect of the foregoing report and the calculation of components set forth therein. (f) In addition to the reporting requirements set forth above, Company the General Partner shall give (or shall cause to be given) notice to Member the Partners of: (i) any items that will otherwise be reportable under Section 8.2(c)(iv) promptly after Company the General Partner becomes aware of the change, anticipated material variance or litigation or other legal issue, as applicable; (ii) any known or reported non-conformance with applicable state and local regulations and Sustainable Forestry Initiative standards or principles as in effect on the date hereof Effective Date and as modified from time to time by Sustainable Forestry Initiative Inc.; and (iii) any proposed transaction between Company the Partnership or its Subsidiaries, on one hand, and any other Person if such transaction would create a potential conflict of interest on the part of Member the General Partner in causing Company the Partnership (or such Subsidiaries) to enter into such transaction, or any other occurrence in east Texas or west Louisiana that would reasonably be expected to give rise to a conflict of interest on the part of the General Partner or its Affiliates in connection with the management and operation of the business and affairs of the Partnership and its Subsidiaries. (g) Company The General Partner shall provide (or shall cause to be provided) to Member the Partners information regarding stand-level activity for the Property and any other Real Estate Asset that includes site preparation and treatment, planting method, stock type, planting density, thinning plan, volume removals by product class, and a detailed inventory plan, and shall include Member the Partners having access to Geographic Information Systems (GIS) data for the Property and any other Real Estate Asset. Company The General Partner shall prepare, or cause to be prepared, at Companythe Partnership’s expense, such additional financial reports and other information as Member the Partners may reasonably determine are appropriate. Additionally, Member each Partner shall be entitled to the same information as may be provided to the other Partners and to any provider of indebtedness to Company the Partnership or its Subsidiaries. (h) Promptly following the Closing, the General Partner will develop (or cause to be developed), and submit to the Board and Subsidiary REIT Board for approval, the following operational policies: (i) a comprehensive compliance program with respect to workplace environmental, health and safety, including policies and procedures to be distributed to employees, agents and contractors regarding workplace environmental, health and safety, (ii) a comprehensive program to be used by the General Partner to track, report and manage workplace environmental, health and safety matters, and (iii) a timeline for the Sustainable Forestry Initiative audits and recertification, as appropriate. (i) Notwithstanding anything herein to the contrary, in the event that the Asset Management Agreement is terminated pursuant to Section 12, Section 13(c) or Section 13(d) thereof, the General Partner shall cease to have any obligations under this Section 8.2.