Common use of Limitations on the Company’s Activities Clause in Contracts

Limitations on the Company’s Activities. (a) This Section 10 is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity. Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Company shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); or (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member shall not, so long as any Obligation is outstanding, amend, alter, change or repeal the definitions of “Independent Manager” or “Special Member” or Sections 5(g) 7, 8, 9, 10, 11, 12, 13, 14, 19, 23, 24, 25, 26, 27, 28, 33 or Schedule A of this Agreement without the written consent of the Independent Manager unless the Approval Condition is satisfied. Subject to this Section 10, the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 33. (c) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Member, any Manager or any other Person, so long as any Obligation is outstanding, the Company shall not take, nor shall the Member, any Manager, or any other Person be authorized or empowered on behalf of the Company to take, any Material Action without the prior unanimous written consent of the Board of Managers, including the Independent Manager; provided, however, that for so long as any Obligation is outstanding, the Board of Managers may not authorize the taking of any such Material Action unless there is at least one Independent Manager then serving in such capacity. (d) The Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. So long as any Obligation is outstanding, the Company shall at all times: (i) maintain its own separate books, accounting records, bank accounts, and other entity documents and records separate from those of the Member or any Affiliate thereof; (ii) at all times hold itself out to the public as a legal entity separate from the Member, any Affiliate thereof or any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity separate from its Member for federal, state and/or local income tax purposes; (iii) file its own tax returns, if any, as may be required under applicable law, and pay any taxes so required to be paid under applicable law; (iv) not commingle its assets with assets of the Member, any Affiliate thereof or any other Person and not hold itself out as being liable for the debts of another; (v) conduct its business in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary to maintain its existence; (vi) maintain and provide when requested separate financial statements, (which may be unaudited), showing its assets and liabilities separate and apart from those of any other Person, and not to have its assets listed on the financial statement of any other Person; provided however that the Company may report its financial statements on a consolidated basis with one or more Affiliates as may be required or permitted by generally accepted accounting principles (provided that any such consolidated financial statements shall contain appropriate footnote(s) indicating that such party and its affiliates are separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documents); (vii) separately manage its liabilities from those of the Member or any Affiliate thereof and pay its own liabilities, obligations and indebtedness of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain of the organizational costs of the Company, and the Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereof; (viii) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis; (ix) pay the salaries of its own employees, if any, from its own assets; (x) not hold out its credit or assets as being available to satisfy the obligations of others; (xi) allocate fairly and reasonably any overhead for shared office space; (xii) use separate stationery, invoices and checks bearing its own name; (xiii) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person, or create, incur or permit to exist any lien on its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for the obligations of any other Person; (xiv) correct any known misunderstanding regarding its separate identity; (xv) refrain from engaging in any business activities without having adequate capital in light of its contemplated business purpose, operations, transactions and liabilities, provided that the foregoing shall not require the Member to make any capital contribution to the Company in excess of the capital contributions made on the date hereof as described in Section 16; (xvi) not acquire any securities of its Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber Entities; and (xx) have a Board of Managers separate from that of the Member and any other Person and cause the Board of Managers to observe all other limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities of the Member or any Affiliate thereof and shall not guarantee the liabilities of the Member or any Affiliate thereof. Failure of the Company, or the Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the Managers. (f) So long as any Obligation is outstanding, the Company shall not: (i) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate; (ii) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 10; (iii) incur, create or assume any indebtedness other than (i) the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (iv) except in connection with the Time Deposit Accounts, the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities), except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions; (v) engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than (1) a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision of the Basic Documents; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (vi) except for the Timber Entities and as otherwise contemplated or permitted by the Basic Documents, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).

Limitations on the Company’s Activities. (ai) This Section 10 9(j) is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity. Notwithstanding entity and so long as any other provision of Obligation is outstanding, notwithstanding anything herein to the contrary, this Agreement and any provision of law that otherwise so empowers the Company, the Company Section 9(j) shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); orcontrol. (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member and/or the Company shall not, so long as any Obligation is outstanding, amend, alter, change or repeal the definitions definition of “Independent Manager” or “Special MemberDirector” or Sections 5(g) 1, 5(b), 5(c), 5(d), 6, 7, 8, 9, 10, 11, 12, 13, 14, 1916, 20, 21, 22, 23, 24, 25, 26, 27, 28, 33 29, 30, 31 or 32 or Schedule A of this Agreement (to the extent that the terms defined in Schedule A are used in any of the foregoing sections) (the “Special Purpose Provisions”), or any other provision of this or any other document governing the formation, management or operation of the Company in a manner that is inconsistent with any of the Special Purpose Provisions, without the unanimous written consent of the Board (including all Independent Manager Directors) and unless the Approval Rating Agency Condition is satisfied. Subject to this Section 109(j), the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 3331. (ciii) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Member, the Board, any Manager Officer or any other Person, so long as neither the Member nor the Board nor any Obligation is outstanding, the Company Officer nor any other Person shall not takebe authorized or empowered, nor shall they permit the MemberCompany, any Manager, or any other Person be authorized or empowered on behalf of the Company to take, any Material Action without the prior unanimous written consent of the Member and the Board of Managers(including all Independent Directors), including the Independent Manager; to take any Material Action, provided, however, that for so long as any Obligation is outstanding, the Board of Managers may not vote on, or authorize the taking of of, any such Material Action Action, unless there is are at least one two Independent Manager Directors then serving in such capacity. (div) The Board and the Member shall cause the Company shall to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. So long as any Obligation is outstanding; provided, however, that the Company shall at all timesnot be required to preserve any such right or franchise if: (1) the Member shall determine that the preservation thereof is no longer desirable for the conduct of its business and that the loss thereof is not disadvantageous in any material respect to the Company and (2) the Rating Agency Condition is satisfied. The Board and the Member also shall cause the Company to and the Company shall: (iA) maintain its own separate books, accounting records, books and records and bank accounts, and other entity documents shall maintain its books, records, resolutions and records separate from those of the Member or any Affiliate thereofagreements as official records; (iiB) at all times hold itself out to the public and all other Persons as a legal entity separate from the Member, any Affiliate thereof or Member and any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity separate from its Member for federal, state and/or local income tax purposes; (iiiC) have a Board of Directors separate from that of the Member and any other Person; (D) file its own tax returns, if any, as may be required under applicable law, to the extent (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division for tax purposes of another taxpayer, and pay any taxes so required to be paid under applicable law; (ivE) except as contemplated by the Basic Documents, not commingle its assets with assets of the Member, any Affiliate thereof or any other Person and not hold itself out as being liable for the debts of anotherPerson; (vF) conduct its business in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary to maintain its separate existence; (viG) maintain and provide when requested separate financial statements; provided, (which however, that its assets may be unaudited), showing its assets and liabilities separate and apart from those of any other Person, and not to have its assets listed on the included in a consolidated financial statement of any other Person; provided however that the Company may report its financial statements on a consolidated basis with one or more Affiliates as may be required or permitted by generally accepted accounting principles (affiliates provided that any (x) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such entity from such Affiliates and to indicate that its assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (y) such assets shall contain appropriate footnote(s) indicating that such party and also be listed on its affiliates are separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documents)collective balance sheet; (viiH) separately manage its liabilities from those of the Member or any Affiliate thereof and pay its own liabilities, obligations and indebtedness liabilities only out of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain of the organizational costs of the Company, and the Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereoffunds; (viiiI) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates and the Member, and not enter into transactions or be a party to, any transaction with its partners, members, shareholders or Affiliates only except in the ordinary course of its business and on a terms which are commercially reasonable basisand are no less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party (except for capital contributions or capital distributions permitted under the terms and conditions of this Agreement and properly reflected on the books and records of the Company); (ixJ) pay the salaries of its own employees, if any, from its own assetsand maintain a sufficient number of employees in light of the Company’s contemplated business; (xK) not hold out its credit or assets as being available to satisfy the obligations of others; (xiL) allocate fairly and reasonably any expenses shared with its Affiliates, including any overhead for shared office space; (xiiM) use separate stationery, invoices and checks bearing its own namechecks; (xiiiN) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person, or create, incur or permit to exist any lien on its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for the obligations of any other Person; (xivO) correct any known misunderstanding regarding its separate identityidentity and not identify itself as a division or part of any other Person; (xvP) refrain from engaging in any business activities without having maintain adequate capital in light of its contemplated business purpose, operations, transactions and liabilities; provided, provided however, that the foregoing shall not require the Member to make any additional capital contribution contributions to the Company in excess of the capital contributions made on the date hereof as described in Section 16Company (Q) observe all Delaware limited liability company formalities; (xviR) not acquire any securities of its the Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber Entities; and (xxS) have a Board of Managers separate from that cause the Directors, Officers, agents and other representatives of the Member Company to act at all times with respect to the Company consistently and any other Person and cause the Board of Managers to observe all other limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities in furtherance of the Member or any Affiliate thereof foregoing and shall not guarantee in the liabilities best interests of the Member or any Affiliate thereofCompany. Failure of the Company, or the Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the ManagersDirectors. (fv) So long as any Obligation is outstanding, the Member shall not cause or permit the Company shall notto: (iA) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate; (iiB) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 109(j); (iiiC) incur, create or assume any indebtedness other than (i) the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (ivD) except in connection with the Time Deposit Accounts, the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities)Person, except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions; (vE) to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than (1) a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision of the Basic Documents; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (viF) except for to the Timber Entities and as otherwise contemplated or extent permitted by the Basic Documentsunder Section 7 hereof, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).

Limitations on the Company’s Activities. (ai) This Section 10 9(b) is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purposepurpose entity” entityfor the purpose of the Indebtedness. Notwithstanding So long as any portion of the Indebtedness is outstanding the provisions of this Section 9(b) shall supercede and control any other provision of this Agreement and any provision of law that otherwise so empowers hereof to the Company, the Company shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); orcontrary. (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member shall not, so long as any Obligation Indebtedness is outstanding, amend, alter, change or repeal the definitions of “Independent Manager” or “Special Member” or Sections 5(g) 5(c), 7, 8, 9, 1020, 1121, 12, 13, 14, 19, 2322, 24, 25, 26, 27, 28, 33 26 or Schedule A 30 of this Agreement without the written consent of the Independent Manager unless the Approval Condition is satisfied. Subject to this Section 10, the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 33Lender. (ciii) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, Company or the Member, any Manager or any other Person, so long as any Obligation Indebtedness is outstanding, neither the Company nor the Member nor any other Person shall be authorized or empowered, nor shall they permit the Company, without the prior written consent of the Special Member to institute proceedings to have the Company be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against the Company or file a petition seeking, or consent to, reorganization or relief with respect to the Company under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a substantial part of its property, or make any assignment for the benefit of creditors of the Company, or admit in writing the Company’s inability to pay its debts generally as they become due, or, to the fullest extent permitted by law, take action in furtherance of any such action, or dissolve or liquidate the Company, or consolidate or merge the Company with or into any Person, or sell all or substantially all of the assets of the Company. (iv) So long as any Indebtedness is outstanding, the Company shall, and the Member shall not take, nor shall the Member, any Manager, or any other Person be authorized or empowered on behalf of cause the Company to take, any Material Action without the prior unanimous written consent of the Board of Managers, including the Independent Manager; provided, however, that for so long as any Obligation is outstanding, the Board of Managers may not authorize the taking of any such Material Action unless there is at least one Independent Manager then serving in such capacity. (d) The Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. So long as any Obligation is outstandingThe Company shall, and the Member also shall cause the Company shall at all timesto: (i1) maintain its own separate booksbe organized solely for the purpose of acquiring, accounting recordsdeveloping, bank accountsowning, holding, selling, leasing, transferring, exchanging, managing and operating the Property), entering into the Basic Documents with the Lender, refinancing the Property in connection with a permitted repayment of the Indebtedness, and other entity documents transacting lawful business that is incident, necessary and records separate from those of appropriate to accomplish the Member or any Affiliate thereofforegoing; (ii2) at all times hold itself out not engage in any business unrelated to the public as a legal entity separate from acquisition, development, ownership, operation, leasing, repair, maintenance, management, disposal or operation of the Member, any Affiliate thereof or any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity separate from its Member for federal, state and/or local income tax purposesProperty; (iii3) not have any assets other than those related to the Property; (4) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, and maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; (5) not fail to correct any known misunderstanding regarding the separate identity of such entity; (6) file its own tax returns; provided, if anyhowever, as that the Company’s assets and income may be required under applicable law, and pay any taxes so required to be paid under included in a consolidated tax return of its parent entities if inclusion on such consolidated tax return is in compliance with applicable law; (iv7) maintain its own resolutions and agreements; (8) not commingle its funds or assets with assets those of any Person or participate in any cash management system with any other Person, except with respect to a custodial account maintained by the Member on behalf of Affiliates of the MemberCompany and, any Affiliate thereof or any other Person with respect to funds in such custodial account, separately account for each item of income and not hold itself out as being liable for expense applicable to the debts of anotherProperty and Company; (v9) hold its assets in its own name; (10) conduct its business in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary or in a name franchised or licensed to maintain its existenceit by an entity other than an Affiliate of the Company; (vi11) maintain balance sheets, operating statements and provide when requested other entity documents separate financial statements, (which may be unaudited), showing from any other Person and not permit its assets and liabilities separate and apart from those of any other Person, and not to have its be listed as assets listed on the financial statement of any other Person; provided however that the Company may report its financial statements on a consolidated basis with one or more Affiliates entity except as may be required or permitted by generally accepted accounting principles GAAP; provided, however, that (provided that A) any such consolidated financial statements statement shall contain appropriate footnote(s) a note indicating that such party it maintains separate balance sheets and its affiliates are separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement operating statements for the Company and the Loan Documents)Property; or (B) if such Person is controlled by the Special Member, then such Person may be included in the consolidated financial statement of the Special Member provided such consolidated financial statement contains a note indicating that it maintains separate financial records for each Person controlled by the Special Member; (vii12) separately manage have a sufficient number of employees in light of its liabilities from those contemplated business operations, which may be none; (13) observe all limited liability company formalities, as applicable; (14) have no indebtedness (including loans (whether or not such loans are evidenced by a written agreement) between Company and any Affiliates of the Member or any Affiliate thereof Company and pay its own liabilitiesrelating to the management of funds in the custodial account maintained by the Member) other than (i) the Indebtedness, obligations (ii) liabilities incurred in the ordinary course of business relating to the ownership and indebtedness of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain operation of the organizational costs Property and the routine administration of the Company, which liabilities are not more than sixty (60) days past the due date (unless disputed in accordance with applicable law), are not evidenced by a note and are paid when due, and which amounts are normal and reasonable under the Company shall reimburse circumstances, and (iii) such other liabilities that are permitted pursuant to this Agreement, or the Member Loan Agreement or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereofother Basic Documents; (viii) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis; (ix) pay the salaries of its own employees, if any, from its own assets; (x15) not assume or guarantee or become obligated for the debts of any other Person or hold out its credit or assets as being available to satisfy the obligations of othersany other Person except as permitted pursuant to the Loan Agreement or the other Basic Documents; (xi16) not acquire obligations or securities of its partners, members or shareholders or any other Affiliate; (17) allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including, but not limited to, paying for shared office spacespace and services performed by any employee of an Affiliate; (xii18) not maintain or use separate stationery, invoices and checks bearing its own the name of any other Person, provided, however, that Member, on behalf of such Person, maintain and use invoices and checks bearing Member’s name; (xiii19) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person, ; (20) hold itself out and identify itself as a separate and distinct entity under its own name or create, incur in a name franchised or permit licensed to exist it by an entity other than an Affiliate of the Company and not as a division or part of any lien on other Person other than Member or Special Member; (21) maintain its assets (includingin such a manner that it will not be costly or difficult to segregate, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), ascertain or enter into any guarantees or otherwise become liable for the obligations identify its individual assets from those of any other Person; (xiv22) correct not make loans to any known misunderstanding regarding its separate identityPerson or hold evidence of indebtedness issued by any other person or entity (other than cash and investment-grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity); (xv23) refrain from engaging in not identify its partners, members or shareholders, or any business activities without having adequate capital in light Affiliate of its contemplated business purposeany of them, operationsas a division or part of it, transactions and liabilities, provided that the foregoing shall not require the identify itself as a division of any other Person other than Member to make any capital contribution to the Company in excess of the capital contributions made on the date hereof as described in Section 16or Special Member; (xvi24) not acquire enter into or be a party to, any securities transaction with its partners, members, shareholders or Affiliates except (A) in the ordinary course of its Member; provided however that business and on terms which are intrinsically fair, commercially reasonable and are no less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party and/or (B) in connection with or as permitted by the Company may hold Loan Agreement or the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber EntitiesBasic Documents; and (xx25) except as provided in the Basic Documents, not have a Board any of Managers separate from that of the Member and its obligations guaranteed by any other Person and cause the Board of Managers to observe all other limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities of the Member or any Affiliate thereof and shall not guarantee the liabilities of the Member or any Affiliate thereofAffiliate. Failure of the Company, or the Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the ManagersMember. (f) So long as any Obligation is outstanding, the Company shall not: (i) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate; (ii) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 10; (iii) incur, create or assume any indebtedness other than (i) the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (iv) except in connection with the Time Deposit Accounts, the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities), except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions; (v) engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than (1) a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision of the Basic Documents; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (vi) except for the Timber Entities and as otherwise contemplated or permitted by the Basic Documents, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).

Limitations on the Company’s Activities. (ai) This Section 10 8(d) is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity. Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Company shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); or. (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member shall not, For so long as any Obligation is outstandingof the Notes are Outstanding (except in connection with a transaction that will result in none of the Notes being Outstanding), the Economic Member shall not amend, alter, change or repeal the definitions definition of “Independent Manager” or “Special Member” or Sections 5(g) 4(c), 4(d), 4(e), 4(f), 6, 7, 8, 9, 10, 11, 1212,13,15,16,19, 1320, 1421, 1922, 23, 24, 25, 26, 27, 28, 33 29 or 30 or Schedule A of this Agreement (the “Special Purpose Provisions”) without the unanimous written consent of the Independent Manager unless the Approval Condition is satisfiedMembers. Subject to this Section 108(d), the Economic Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 3330. (ciii) Except in connection with the issuance of the Notes or as permitted by the Indenture or any other Secured Debt Document (including as “Permitted Liens” thereunder), the Company shall not incur, create or assume or suffer to permit the incurrence, creation or assumption of (1) any Liens (as defined in the Indenture) on or agreements granting rights in or restricting the use or development of all or any portion of the Property or any legal or beneficial interest therein or (2) indebtedness secured by an interest in any Subsidiary (as defined in the Indenture) or all or any part of the Property or any other property or assets of the Company or any Subsidiary or any interest therein. (iv) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Economic Member, any Manager Officer or any other Person, so long as neither the Economic Member nor any Obligation is outstanding, the Company Officer nor any other Person shall not takebe authorized or empowered, nor shall they permit the MemberCompany, any Manager, or any other Person be authorized or empowered on behalf of the Company to take, any Material Action without the prior unanimous written consent of the Board of ManagersMembers (including all independent Members), including the Independent Managerto take any Material Action; provided, however, that for so long as any Obligation is outstanding, the Board of Managers may not authorize the taking of any such no Material Action shall be consented to unless there is are at least one two Independent Manager Members then serving in such capacity. The Trustee shall be a third-party beneficiary of this Section 8(d)(iv) and shall have the right to enforce the terms of this Section to their fullest extent. (dv) The Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. So For so long as any Obligation is outstandingof the Notes are Outstanding (except in connection with a transaction that will result in none of the Notes being Outstanding), in addition to the other provisions set forth in this Agreement, the Company shall at all times:comply with the following (any references in this Section 8(d)(v) to “Affiliate,” “Person” or “others” shall be construed to exclude any subsidiary of the Company that complies with clause (vi) of this Section 8(d)): (i) 1. establish and maintain an office through which its business shall be conducted separate and apart from that of any of its Affiliates and shall allocate fairly and reasonably any overhead for shared office space; 2. maintain its own books and records and bank accounts separate books, accounting records, bank accounts, and apart from those of any Affiliate or any other Person; 3. not commingle assets with those of any Affiliate (provided that funds of Company may be paid as distributions to Economic Member and Economic Member may make capital contributions to Company as set forth in this Agreement); 4. conduct its own business in its own name and strictly comply with all organizational formalities to maintain its separate existence; 5. maintain financial statements separate from any Affiliate and not permit its assets to be listed as assets on the financial statement of any other entity documents except as required by GAAP; provided, however, that any such consolidated financial statement shall contain a note indicating that its separate assets and records liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity; 6. maintain its assets in such a manner that will not be more costly or difficult to segregate, ascertain or identify its individual assets from those of any other entity; 7. pay its own liabilities only out of its own funds, including salaries of any employees, provided that the foregoing shall not require the Economic Member to make any additional capital contributions to the Company; 8. maintain an arm’s length relationship with any Affiliate, including the Economic Member (it being acknowledged by the Members that the Secured Debt Documents satisfy this Section 8(d)(v)(8)); 9. maintain adequate capital in light of its contemplated business operations, transactions and liabilities, provided that the foregoing shall not require the Economic Member to make any additional capital contributions to the Company; 10. except as provided for in the Secured Debt Documents, not guarantee or become obligated for the debts of any other entity, including any Affiliate, or hold out its credit or assets as being available to satisfy the obligations of others; 11. except as may result from the execution, delivery and performance by the Company of the Secured Debt Documents, not acquire obligations or securities of its partners, members or shareholders; 12. use stationery, invoices and checks separate from those of any Affiliate; 13. except as provided for or permitted in the Member Secured Debt Documents and/or in connection with the issuance of the Notes, including any Additional Notes (as defined in the Indenture), not borrow any funds or enter into any loan transactions as a borrower, guarantor or obligor, and not pledge its assets for the benefit of any other entity, including any Affiliate thereofor make any loans or advances to any other Person; (ii) 14. at all times hold itself out to the public and all other Persons as a legal entity separate from the Member, any Affiliate thereof or Economic Member and any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity separate from its Member for federal, state and/or local income tax purposes; (iii) 15. correct any known misunderstanding regarding its separate identity; 16. file its own tax returns, if any, as may be required under applicable law, to the extent (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division for tax purposes of another taxpayer, and pay any taxes so required to be paid under applicable law;; and (iv) not commingle its assets with assets 17. cause the Officers, agents and other representatives of the Member, any Affiliate thereof or any other Person and not hold itself out as being liable for the debts of another; (v) conduct its business in its own name and through its own authorized officers and agents and strictly comply Company to act at all times with all organizational formalities necessary to maintain its existence; (vi) maintain and provide when requested separate financial statements, (which may be unaudited), showing its assets and liabilities separate and apart from those of any other Person, and not to have its assets listed on the financial statement of any other Person; provided however that the Company may report its financial statements on a consolidated basis with one or more Affiliates as may be required or permitted by generally accepted accounting principles (provided that any such consolidated financial statements shall contain appropriate footnote(s) indicating that such party and its affiliates are separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documents); (vii) separately manage its liabilities from those of the Member or any Affiliate thereof and pay its own liabilities, obligations and indebtedness of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain of the organizational costs of the Company, and the Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereof; (viii) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis; (ix) pay the salaries of its own employees, if any, from its own assets; (x) not hold out its credit or assets as being available to satisfy the obligations of others; (xi) allocate fairly and reasonably any overhead for shared office space; (xii) use separate stationery, invoices and checks bearing its own name; (xiii) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person, or create, incur or permit to exist any lien on its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for the obligations of any other Person; (xiv) correct any known misunderstanding regarding its separate identity; (xv) refrain from engaging in any business activities without having adequate capital in light of its contemplated business purpose, operations, transactions and liabilities, provided that the foregoing shall not require the Member to make any capital contribution respect to the Company consistently and in excess furtherance of the capital contributions made on the date hereof as described in Section 16; (xvi) not acquire any securities of its Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber Entities; and (xx) have a Board of Managers separate from that of the Member and any other Person and cause the Board of Managers to observe all other limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities of the Member or any Affiliate thereof and shall not guarantee the liabilities of the Member or any Affiliate thereofforegoing. Failure of the Company, or the Economic Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement Agreement, shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the ManagersMembers. (fvi) So Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall be construed or interpreted as barring or prohibiting the Company from controlling or owning a subsidiary entity whose organizational document contains provisions substantially in the form of the Special Purpose Provisions (an “SPE Subsidiary”), except that: (A) an SPE Subsidiary’s organizational document may exclude from the definition of “Material Action” any consolidation or merger of the SPE Subsidiary with the Company or with another SPE Subsidiary, any sale of all or substantially all of the assets of the SPE Subsidiary to the Company or another SPE Subsidiary, and any dissolution or liquidation of the SPE Subsidiary; (B) in any instance in this Agreement in which there appears the phrase “for so long as any Obligation is outstanding, of the Company shall not: Notes are Outstanding (i) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate; (ii) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 10; (iii) incur, create or assume any indebtedness other than (i) the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (iv) except in connection with a transaction that will result in none of the Time Deposit Accounts, Notes being Outstanding),” the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, same shall be deemed followed in the Timber Entities), SPE Subsidiary’s organizational document with the phrase “or except if [the subsidiary] has been released from its Note Guarantee (as defined in the Indenture) or except in connection with a transaction that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with will effect such provisionsrelease”; (vC) engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than instance in this Agreement in which there appears the phrase “unless and until the Notes are no longer Outstanding (1) except in connection with a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision transaction that will result in none of the Basic DocumentsNotes being Outstanding),” the same shall be deemed followed in the SPE Subsidiary’s organizational document with the phrase “or except if [the subsidiary] has been released from its Note Guarantee (as defined in the Indenture) or except in connection with a transaction that will effect such release”; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; orand (viD) except for references to “Affiliate,” “Person” or “others” in the Timber Entities and as otherwise contemplated SPE Subsidiary’s organizational document counterpart of Section 8(d)(v) hereof may be construed to exclude the Company or permitted by the Basic Documents, form, acquire any other SPE Subsidiary that is a direct or hold any subsidiary (whether corporate, partnership, limited liability company or other)indirect parent of such SPE Subsidiary.

Limitations on the Company’s Activities. (ai) This Section 10 9(j) is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity. Notwithstanding entity and so long as any other provision of Obligation is outstanding, notwithstanding anything herein to the contrary, this Agreement and any provision of law that otherwise so empowers the Company, the Company Section 9(j) shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); orcontrol. (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member and/or the Company shall not, so long as any Obligation is outstanding, amend, alter, change or repeal the definitions definition of “Independent Manager” or “Special MemberDirector” or Sections 5(g) 1, 5(b), 5(c), 5(d), 6, 7, 8, 9, 10, 11, 12, 13, 14, 1916, 20, 21, 22, 23, 24, 25, 26, 27, 28, 33 29, 30, 31 or 32 or Schedule A of this Agreement (to the extent that the terms defined in Schedule A are used in any of the foregoing sections) (the “Special Purpose Provisions”), or any other provision of this or any other document governing the formation, management or operation of the Company in a manner that is inconsistent with any of the Special Purpose Provisions, without the unanimous written consent of the Board (including all Independent Manager Directors) and unless the Approval Rating Agency Condition is satisfied. Subject to this Section 109(j), the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 3331. (ciii) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Member, the Board, any Manager Officer or any other Person, so long as neither the Member nor the Board nor any Obligation is outstanding, the Company Officer nor any other Person shall not takebe authorized or empowered, nor shall they permit the MemberCompany, any Manager, or any other Person be authorized or empowered on behalf of the Company to take, any Material Action without the prior unanimous written consent of the Member and the Board of Managers(including all Independent Directors), including the Independent Manager; to take any Material Action, provided, however, that for so long as any Obligation is outstanding, the Board of Managers may not vote on, or authorize the taking of of, any such Material Action Action, unless there is are at least one two Independent Manager Directors then serving in such capacity. (div) The Board and the Member shall cause the Company shall to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. So long as any Obligation is outstanding; provided, however, that the Company shall at all timesnot be required to preserve any such right or franchise if: (1) the Member shall determine that the preservation thereof is no longer desirable for the conduct of its business and that the loss thereof is not disadvantageous in any material respect to the Company and (2) the Rating Agency Condition is satisfied. The Board and the Member also shall cause the Company to and the Company shall: (iA) maintain its own separate books, accounting records, books and records and bank accounts, and other entity documents shall maintain its books, records, resolutions and records separate from those of the Member or any Affiliate thereofagreements as official records; (iiB) at all times hold itself out to the public and all other Persons as a legal entity separate from the Member, any Affiliate thereof or Member and any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity separate from its Member for federal, state and/or local income tax purposes; (iiiC) have a Board of Directors separate from that of the Member and any other Person; (D) file its own tax returns, if any, as may be required under applicable law, to the extent (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division for tax purposes of another taxpayer, and pay any taxes so required to be paid under applicable law; (ivE) except as contemplated by the Basic Documents, not commingle its assets with assets of the Member, any Affiliate thereof or any other Person and not hold itself out as being liable for the debts of anotherPerson; (vF) conduct its business in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary to maintain its separate existence; (viG) maintain and provide when requested separate financial statements; provided, (which however, that its assets may be unaudited), showing its assets and liabilities separate and apart from those of any other Person, and not to have its assets listed on the included in a consolidated financial statement of any other Person; provided however that the Company may report its financial statements on a consolidated basis with one or more Affiliates as may be required or permitted by generally accepted accounting principles (affiliates provided that any (x) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such entity from such Affiliates and to indicate that its assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (y) such assets shall contain appropriate footnote(s) indicating that such party and also be listed on its affiliates are separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documents)collective balance sheet; (viiH) separately manage its liabilities from those of the Member or any Affiliate thereof and pay its own liabilities, obligations and indebtedness liabilities only out of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain of the organizational costs of the Company, and the Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereoffunds; (viiiI) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates and the Member, and not enter into transactions or be a party to, any transaction with its partners, members, shareholders or Affiliates only except in the ordinary course of its business and on a terms which are commercially reasonable basisand are no less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party (except for capital contributions or capital distributions permitted under the terms and conditions of this Agreement and properly reflected on the books and records of the Company); (ixJ) pay the salaries of its own employees, if any, from its own assetsand maintain a sufficient number of employees in light of the Company’s contemplated business; (xK) not hold out its credit or assets as being available to satisfy the obligations of others; (xiL) allocate fairly and reasonably any expenses shared with its Affiliates, including any overhead for shared office space; (xiiM) use separate stationery, invoices and checks bearing its own namechecks; (xiiiN) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person, or create, incur or permit to exist any lien on its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for the obligations of any other Person; (xivO) correct any known misunderstanding regarding its separate identityidentity and not identify itself as a division or part of any other Person; (xvP) refrain from engaging in any business activities without having maintain adequate capital in light of its contemplated business purpose, operations, transactions and liabilities; provided, provided however, that the foregoing shall not require the Member to make any additional capital contribution contributions to the Company in excess of the capital contributions made on the date hereof as described in Section 16Company; (xviQ) observe all Delaware limited liability company formalities; (R) not acquire any securities of its the Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber Entities; and (xxS) have a Board of Managers separate from that cause the Directors, Officers, agents and other representatives of the Member Company to act at all times with respect to the Company consistently and any other Person and cause the Board of Managers to observe all other limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities in furtherance of the Member or any Affiliate thereof foregoing and shall not guarantee in the liabilities best interests of the Member or any Affiliate thereofCompany. Failure of the Company, or the Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the ManagersDirectors. (fv) So long as any Obligation is outstanding, the Member shall not cause or permit the Company shall notto: (iA) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate; (iiB) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 109(j); (iiiC) incur, create or assume any indebtedness other than (i) the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (ivD) except in connection with the Time Deposit Accounts, the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities)Person, except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions; (vE) to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than (1) a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision of the Basic Documents; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (viF) except for to the Timber Entities and as otherwise contemplated or extent permitted by the Basic Documentsunder Section 7 hereof, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).

Limitations on the Company’s Activities. (a) This Section 10 8.1 is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” purpose entity. ”: (a) Notwithstanding anything to the contrary in this Agreement or in any other provision document governing the formation, management or operation of this Agreement and any provision of law that otherwise so empowers the Company, the Company shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); or (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member shall not, for so long as any Obligation non-consolidation opinion with respect to the Company and its Members is outstandingin effect, neither the Member nor the Company shall amend, alter, change or repeal Sections 1.1 (to the definitions extent that the terms defined in Section 1.1 are used in any of “Independent Manager” or “Special Member” or Sections 5(g) 7the sections enumerated in this Section 8.1(a)), 82.2, 92.5, 104.5(b), 116.1(b), 127.1(b), 137.1(c), 147.1(d), 197.3, 237.5, 248.1, 259.5 11.1, 2612.1, 2713.4, 2813.6, 33 or Schedule A 13.7, of this Agreement without (the written consent “Special Purpose Provisions”), or any other provision of this or any other document governing the formation, management or operation of the Independent Manager unless Company in a manner that is inconsistent with any of the Approval Condition is satisfiedSpecial Purpose Provisions, except upon receipt of confirmation from the law firm that rendered such non-consolidation opinion that such amendment would not alter such non-consolidation opinion. In the event of any conflict between any of the Special Purpose Provisions and any other provision contained in this Agreement or in the Certificate of Formation, the Special Purpose Provisions control. Subject to this Section 108.1, the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 3313.6. (cb) Notwithstanding any other provision of this Agreement or any other document governing the formation, management or operation of the Company, and notwithstanding any provision of law that otherwise so empowers the Company, the Member, the Board, any Manager Officer, or any other Person, so long as in addition to any Obligation is outstandingother limitations set forth in this Agreement, neither the Member nor the Board nor any Officer nor any other Person shall be authorized or empowered, nor shall they permit the Company to, and the Company shall not takenot, nor shall the Member, any Manager, or any other Person be authorized or empowered on behalf of the Company to take, any Material Action without the prior unanimous written consent of the Member and the Board of Managers, (including the Independent ManagerDirector) take any Material Action; provided, however, that for so long as any Obligation is outstanding, the Board of Managers may not vote on, or authorize the taking of of, any such Material Action Action, unless there is at least one Independent Manager Director then serving in such capacity. (dc) The Board and the Member shall cause the Company shall to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. So long as Notwithstanding anything to the contrary in this Agreement or in any Obligation is outstandingother document governing the formation, management or operation of the Company, the Board also shall cause the Company shall at all timesto and the Company shall: (i1) maintain its own separate books, accounting records, records and bank accounts, and other entity documents and records accounts separate from those of the Member or any Affiliate thereofother Person; (ii2) at all times hold itself out to the public and all other Persons as a legal entity separate from the Member, any Affiliate thereof or Member and from any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity separate from its Member for federal, state and/or local income tax purposes; (iii3) have its own Board of Directors; (4) file its own tax returnsreturns separate from those of any other Person, if any, except to the extent that the Company is treated as may be a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes so required to be paid under applicable law;, and not be a member of a consolidated tax group. (iv5) not commingle its assets with assets of the Member, any Affiliate thereof or any other Person and not hold itself out as being liable for the debts of anotherPerson; (v6) conduct its business only in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary to maintain its separate existence; (vi7) maintain and provide when requested separate financial statements, (which may be unaudited), showing its assets and liabilities separate and apart from those of any other Person, Person and not to have its assets listed on the any financial statement of any other Person; provided however provided, however, that the Company Company’s assets may report its financial statements on be included in a consolidated basis with one or more Affiliates as may be required or permitted by generally accepted accounting principles (financial statement of its Affiliate provided that any (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Company from such Affiliate and to indicate that the Company’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (ii) such assets shall contain appropriate footnote(s) indicating that such party and its affiliates are also be listed on the Company’s own separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documents)balance sheet;; (vii) separately manage its liabilities from those of the Member or any Affiliate thereof and 8) pay its own liabilities, obligations liabilities and indebtedness expenses only out of any kind, including all administrative expenses, from its own separate assetsfunds; provided, provided however, that the Initial Member or any Affiliate thereof may pay certain of foregoing shall not require the organizational costs of Members to make additional capital contributions to the Company, and the Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereof; (viii9) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates and not enter into transactions any transaction with Affiliates only an Affiliate of the Company except on a commercially reasonable basisterms similar to those available to unaffiliated parties in an arm’s-length transaction; (ix10) maintain a sufficient number of employees in light of its contemplated business purpose and pay the salaries of its own employees, if any, only from its own assetsfunds; (x11) not hold out its credit or assets as being available to satisfy the obligations of othersany other Person; (xi12) allocate fairly and reasonably any overhead expenses that are shared with an affiliate, including for shared office spacespace and for services performed by an employee of an affiliate; (xii) use separate stationery, invoices and checks bearing its own name; (xiii) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person, or create, incur or permit to exist any lien on its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for the obligations of any other Person; (xiv13) correct any known misunderstanding regarding its separate identityidentity and not identify itself as a department or division of any other Person; (xv14) refrain from engaging in any business activities without having maintain adequate capital in light of its contemplated business purpose, operations, transactions and liabilities; provided, provided however that the foregoing shall not require the Member Members to make any additional capital contribution contributions to the Company in excess of the capital contributions made on the date hereof as described in Section 16; (xvi) not acquire any securities of its Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber EntitiesCompany; and (xx15) have a Board of Managers separate from that cause the Directors, Officers, agents and other representatives of the Member Company to act at all times with respect to the Company consistently and any other Person and cause the Board of Managers to observe all other limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities in furtherance of the Member or any Affiliate thereof foregoing and shall not guarantee in the liabilities best interests of the Member or any Affiliate thereofCompany. Failure of the Company, or the Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the ManagersDirectors. (fd) So long as Notwithstanding anything to the contrary in this Agreement or in any Obligation is outstandingother document governing the formation, management or operation of the Company, the Board shall not cause or permit the Company to and the Company shall not: (i1) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate, or become obligated for the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person; (ii2) pledge any of its assets to secure the obligations of any other Person, except that it may pledge one or more of the Securities held by the Company, if any, as security for “repo” or similar financing that provides for no recourse beyond the assets of the Company; (3) engage, directly or indirectly, in any business other than the actions as required or permitted to be performed under Section 7, the Basic Documents 2.5 or this Section 108.1; (iii4) (i) incur indebtedness to any Affiliate or (ii) incur, create or assume any other indebtedness, other than, with respect to clause (ii), indebtedness other than (i) with the loan evidenced sole recourse to assets of the Company, except that it may pledge one or more of the Securities held by the Timber NoteCompany, (ii) if any, as security for “repo” or similar financing that provides for no recourse beyond the assets of the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (iv5) except in connection with the Time Deposit Accounts, the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities), except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisionsother Person; (v6) to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than such transfers as are conducted in connection with the deposit of mortgage loans into trust funds in accordance with Section 2.5(a); (17) a Timber Entity Ownership Interest Transfer permitted under engage in any business activity other than as stated in Section 8(j)2.5 of this Agreement; and (8) own any asset or property other than (i) the Underlying Assets and/or the Securities, and (2ii) such other activities as are expressly permitted pursuant incidental personal property related to any provision or arising from the ownership of the Basic Documents; provided, however, that Underlying Assets and/or the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (vi) except for the Timber Entities and as otherwise contemplated or permitted by the Basic Documents, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other)Securities.

Limitations on the Company’s Activities. (ai) This Section 10 9j is being adopted in order to comply with certain provisions required in order to qualify the Company as a “qualified special purposepurpose entity” entity. Notwithstanding any other provision for the purpose of this Agreement and any provision of law that otherwise so empowers the Company, transactions contemplated by the Company shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); orTrust Agreements. (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member shall not, so long as any Obligation is outstanding, amend, alter, change or repeal the definitions of “Independent Manager” or “Special Member” or Sections 5(g) 7, 8, 9, 10, 11, 12, 13, 14, 19, 23, 24, 25, 26, 27, 28, 33 or Schedule A of this Agreement without the written consent of the Independent Manager unless the Approval Condition is satisfied. Subject to this Section 109j, the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 3331, provided, however, that so long as any Trust Securities are outstanding, neither the Member nor the Company shall amend, alter, change or repeal the definition of “Independent Manager” or Sections 5(b), 5(c), 5(d), 7, 8, 9, 10, 16, 20(f), 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, or 34 of this Agreement (the “Special Purpose Provisions”) without (1) the unanimous written consent of the Board (including the Independent Managers), (2) the consent of the Trustee of the Trust Securities and (3) meeting the Rating Agency Condition. In the event of any conflict between any of the Special Purpose Provisions and any other provision of this or any other document governing the formation, management or operation of the Company, the Special Purpose Provisions shall control. (ciii) Notwithstanding any other provision of this Agreement or any other document governing the formation, management or operation of the Company, and any provision of law that otherwise so empowers the Company, the MemberMember , any Manager the Board, or any Officer or other Person, and for so long as any Obligation is the Trusts Securities are outstanding, neither the Member nor the Board, any Officer or other Person shall be authorized or empowered, nor shall they permit the Company to, and the Company shall not takenot, nor shall the Member, any Manager, or any other Person be authorized or empowered on behalf of the Company to take, any Material Action without the prior unanimous written consent of the Member and the Board of Managers, (including the Independent Manager; Managers), take any Material Action, provided, however, that for so long as any Obligation is outstanding, the Board of Managers may not vote on, or authorize the taking of of, any such Material Action Action, unless there is are at least one two Independent Manager Managers then serving in such capacity. (div) The So long as any Trust Securities are outstanding, the Board and the Member shall cause the Company shall to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, existence and rights (charter and statutory); provided, however, that the Company shall not be required to preserve any such right if: (A) the Board shall determine that the preservation thereof is no longer desirable for the conduct of its business and franchisesthat the loss thereof is not disadvantageous in any material respect to the Company and the holders of the Trust Securities and (B) the Rating Agency Condition is satisfied. So long as any Obligation is Trust Securities are outstanding, the Board also shall cause the Company shall at all timesto and the Company shall: (iA) maintain its own separate books, accounting records, books and records and bank accounts, and other entity documents and records separate from those of the Member or any Affiliate thereof; (iiB) at all times hold itself out to the public as a legal entity separate from the Member, any Affiliate thereof or Member and any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity strictly comply with all organizational formalities to maintain its separate from its Member for federal, state and/or local income tax purposesexistence; (iiiC) have a Board composed differently from that of the Member and any other Person; (D) correct any known misunderstanding regarding its separate identity and refrain from engaging in any activity that compromises the separate legal identity of the Company; (E) maintain adequate capital and a sufficient number of employees, if any employees are so needed, in light of its contemplated business purposes, transactions and liabilities; (F) cause its Board to meet at least annually or act pursuant to written consent and keep minutes of such meetings and actions and observe all other Delaware limited liability company formalities; (G) not acquire any obligations or securities of the Member or an Affiliate; (H) file its own tax returns, if any, as may be required under applicable law, , and pay any taxes so required to be paid under applicable law; (ivI) not commingle its assets with assets of the Member, any Affiliate thereof or any other Person except in connection with the customary operation of such cash management system as Sxxxxx Mxx, Inc. (“Sxxxxx Mae”) may from time to time in the ordinary course of business implement (provided, that any such cash management system shall be operated such that all transfers of funds are properly documented and not hold itself out as being liable the respective assets and liabilities of Sxxxxx Mxx and the Company are ascertainable at all times) for the debts of anotherSxxxxx Mae and its consolidated subsidiaries; (vJ) conduct its business in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary to maintain its existencename; (viK) maintain and provide when requested separate financial statements, (which may be unaudited), showing its assets and liabilities separate and apart from those of any other Person, Person and not to have its assets listed on the any financial statement of any other Person; provided however that the Company may report its financial statements on a consolidated basis with one or more Affiliates as may be required or permitted by generally accepted accounting principles (provided that any such consolidated financial statements shall contain appropriate footnote(s) indicating that such party and its affiliates are separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documents); (viiL) separately manage its liabilities from those of the Member or any Affiliate thereof and pay its own liabilities, obligations liabilities and indebtedness expenses only out of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain of the organizational costs of the Company, and the Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereoffunds; (viiiM) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates unaffiliated parties, and not enter into transactions any transaction with Affiliates only an Affiliate of the Company except on a commercially reasonable basisterms similar to those available to unaffiliated parties in an arm’s length transaction; (ixN) pay the salaries of its own employees, if any, from its own assets; (xO) not hold out its credit or assets as being available to satisfy the obligations of othersany other Person nor pledge its assets for the benefit of any other Person; (xiP) allocate fairly and reasonably any overhead expenses that are shared with an affiliate, including and for shared office spaceservices performed by an employee of an affiliate; (xiiQ) use separate stationery, invoices and checks bearing its own name; (xiii) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person, or create, incur or permit to exist any lien on its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for the obligations of any other Person; (xiv) correct any known misunderstanding regarding its separate identity; (xv) refrain from engaging in any business activities without having adequate capital in light of its contemplated business purpose, operations, transactions and liabilities, provided that the foregoing shall not require the Member to make any capital contribution to the Company in excess of the capital contributions made on the date hereof as described in Section 16; (xvi) not acquire any securities of its Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber Entities; and (xxR) have a Board of Managers separate from that cause the Managers, Officers, agents and other representatives of the Member Company to act at all times with respect to the Company consistently and any other Person and cause the Board of Managers to observe all other limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities in furtherance of the Member or any Affiliate thereof foregoing and shall not guarantee in the liabilities best interests of the Member or any Affiliate thereofCompany. Failure of the Company, or the Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the Managers. (fv) So long as any Obligation is Trust Securities are outstanding, the Board shall not cause or permit the Company to and the Company shall not: (iA) except as contemplated by the Basic Documents, guarantee or become obligated for any obligation debts or obligations of any other Person, including any Affiliate; (iiB) engage, directly or indirectly, in any business other than the actions that required or permitted to be performed under Section 7, the Basic Documents 7 or this Section 109j; (iiiC) except as provided under Section 7, incur, create or assume any indebtedness other than (i) any indebtedness incurred in the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents;ordinary course of its business: (ivD) except in connection with the Time Deposit Accounts, the Member Note and the Transferee Member Noteas provided under Section 7, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities), except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisionsPerson; (vE) engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than (1) a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision of the Basic Documents; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (vi) except for the Timber Entities and as otherwise contemplated or permitted by the Basic Documents, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest in any other entity; provided that the Company may hold ownership interests in the Trusts; (F) sell, pledge, in transfer, assign or otherwise convey the interest of the Member in the Company.; (G) to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, sale or other transfer of any of its assets outside the ordinary course of the Company’s business; or (H) buy or hold evidence of indebtedness issued by any other Person (other than cash, investment-grade securities, or Student Loans). (vi) Without the consent of the Independent Managers, neither the Company, the Member, nor any other Person on behalf of the Company shall have the authority to: (A) confess a judgment against the Company; (B) knowingly perform any act that would subject (1) the Member to liabilities of the Company in any jurisdiction or the Company to liabilities of the Member or (2) the Company to taxation as a corporation under relevant provisions of the Code; and

Limitations on the Company’s Activities. (ai) This Section 10 9(d) is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity. Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Company shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); or. (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member shall not, so long as any Obligation is outstandingmortgage hen in favor of Lender (the “First Mortgage”) exists on any portion of the Property, materially amend, alter, change or repeal the definitions of “Independent Manager” or “Special Member” or Sections 5(g) 7, 8, 9, 10, 11, 12, 13, 14, 19, 23, 24, 25, 26, 27, 28, 33 or Schedule A any portion of this Agreement without the written consent of the Independent Manager unless the Approval Lender Condition is satisfied. Subject to this Section 109(d), the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 3331. (ciii) For so long as the First Mortgage exists on any portion of the Property, (a) the Company shall not incur, assume, or guaranty any indebtedness other than indebtedness necessary to acquire, operate and maintain the Property; (b) the Company shall not, to the fullest extent permitted by law, dissolve or liquidate, or consolidate or merge with or into any other entity, or convey or transfer its properties and assets substantially as an entirety or transfer any of its beneficial interests to any entity. (iv) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Member, any Manager or any other Person, for so long as any Obligation is outstandingportion of the First Mortgage exists on any portion of the Property, neither the Company Member nor any other Person shall not takebe authorized or empowered, nor shall they permit the MemberCompany, any Manager, or any other Person be authorized or empowered on behalf of the Company to take, any Material Action without the prior unanimous written consent of the Board of ManagersMember, including the Independent Manager; provided, however, that for to take any Material Action. (v) For so long as the First Mortgage exists on any Obligation is outstandingportion of the Property, the Board of Managers may not authorize the taking of any such Material Action unless there is at least one Independent Manager then serving in such capacity. (d) The Company shall do or cause to be done all things necessary order to preserve and keep ensure its separate and distinct identity, in full force and effect its existence, rights (charter and statutory) and franchises. So long as any Obligation is outstandingaddition to the other provisions set forth in this Agreement, the Company shall at all timesconduct its affairs in accordance with the following provisions: (iA) It shall establish and maintain its own separate books, accounting records, bank accounts, and other entity documents and records separate from those of the Member or any Affiliate thereof; (ii) at all times hold itself out to the public as a legal entity separate from the Member, any Affiliate thereof or any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity separate from its Member for federal, state and/or local income tax purposes; (iii) file its own tax returns, if any, as may be required under applicable law, and pay any taxes so required to be paid under applicable law; (iv) not commingle its assets with assets of the Member, any Affiliate thereof or any other Person and not hold itself out as being liable for the debts of another; (v) conduct office through which its business in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary to maintain its existence; (vi) maintain and provide when requested separate financial statements, (which may shall be unaudited), showing its assets and liabilities conducted separate and apart from those of any other Person, and not to have its assets listed on the financial statement of any other Person; provided however that the Company may report its financial statements on a consolidated basis with one or more Affiliates as may be required or permitted by generally accepted accounting principles (provided that any such consolidated financial statements shall contain appropriate footnote(s) indicating that such party and its affiliates are separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documents); (vii) separately manage its liabilities from those of the Member or and any Affiliate thereof and pay its own liabilities, obligations and indebtedness of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain of the organizational costs of the Company, and the Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereof; (viii) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis; (ix) pay the salaries of its own employees, if any, from its own assets; (x) not hold out its credit or assets as being available to satisfy the obligations of others; (xi) allocate fairly and reasonably any overhead for shared office space;. (xiiB) It shall maintain records and books of account separate from those of the Member and any Affiliate. (C) It shall observe all limited liability company formalities. (D) It shall not commingle assets with those of the Member or any Affiliate. (E) It shall conduct its own business in its own name. (F) It shall maintain financial statements separate from the Member and any Affiliate. (G) It shall pay any liabilities out of its own funds, including salaries of any employees, not funds of the Member and any Affiliate. (H) It shall maintain an arm’s length relationship with the Member and any Affiliate. (I) It shall not guarantee or become obligated for the debts of any other entity, including the Member or any Affiliate, or hold out its credit as being available to satisfy the obligations of others. (J) It shall use separate stationery, invoices and checks bearing its own name;separate from the Member and any Affiliate. (xiiiK) except as contemplated by the Basic Documents, It shall not pledge its assets for the benefit of any other Personentity, including the Member or create, incur or permit to exist any lien on its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for the obligations of any other Person;Affiliate. (xivL) correct any known misunderstanding regarding its separate identity; (xv) refrain from engaging in any business activities without having adequate capital in light of its contemplated business purpose, operations, transactions and liabilities, provided that the foregoing It shall not require the Member to make any capital contribution to the Company in excess of the capital contributions made on the date hereof hold itself out as described in Section 16; (xvi) not acquire any securities of its Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber Entities; and (xx) have a Board of Managers entity separate from that of the Member and any other Person and cause Affiliate. (M) It shall not, except as contemplated or permitted by the Board of Managers to observe all other Loan Documents, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities of the Member or any Affiliate thereof and shall not guarantee the liabilities of the Member or any Affiliate thereofother). Failure of the Company, or the Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the ManagersMember. (f) So long as any Obligation is outstanding, the Company shall not: (i) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate; (ii) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 10; (iii) incur, create or assume any indebtedness other than (i) the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (iv) except in connection with the Time Deposit Accounts, the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities), except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions; (v) engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than (1) a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision of the Basic Documents; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (vi) except for the Timber Entities and as otherwise contemplated or permitted by the Basic Documents, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).

Limitations on the Company’s Activities. (a) This Section 10 is being adopted in order order, among other things, to comply with certain provisions required in order to qualify the Company as a “special purpose” entity. Notwithstanding In the event of any conflict between this Section 10 and any other provision of this Agreement and any provision of law that otherwise so empowers the CompanyAgreement, the Company provisions of this Section 10 shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); or (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereofcontrol. (b) The Member Stockholders shall not, so long as any Obligation Permitted Holding is outstanding, amend, alter, change or repeal the definitions of “Independent Manager” or “Special Member” or Sections 5(g) 1, 4, 5, 6(d), 7, 8, 99(a), 9(b), 9(d), 9(f), 9(g), 9(l), 10, 1111(a) (first paragraph thereof), 1211(g), 1315, 1416, 17, 18, 19, 2320(c), 2422, 25, 26, 27, 28, 33 30, 31, 33, or Schedule 35, the definition of “Independent Director” or Exhibit A of this Agreement (the “SPE Provisions”) without the prior unanimous written consent of the Board (including the Independent Manager unless Director). In the Approval Condition is satisfiedevent of any conflict between any of the SPE Provisions and any other provision contained in this Agreement or in the Certificate, the SPE Provisions control. Subject to this Section 10, the Member reserves Stockholders reserve the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 3335. (c) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the MemberStockholder, the Board, any Manager Officer or any other Person, so long as any Obligation is outstandingnone of the Stockholders, the Company shall not take, nor shall the MemberBoard, any ManagerOfficer, or any other Person shall be authorized or empowered on behalf of to, nor shall they permit the Company to taketo, any Material Action and the Company shall not, without the prior unanimous written consent of the Stockholder and the Board of Managers, (including the Independent ManagerDirector), take any Material Action; provided, however, that for so long as any Obligation is outstanding, the Board of Managers may not vote on, or authorize the taking of of, any such Material Action Action, unless there is at least one an Independent Manager Director then serving in such capacity. (d) The Board shall cause the Company shall to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. So long as any Obligation is outstanding; provided, however, that the Company shall at all timesnot be required to preserve any such right or franchise if the Board shall determine that the preservation thereof is no longer desirable for the conduct of its business and that the loss thereof is not disadvantageous in any material respect to the Company. The Board also shall cause the Company to, and the Company shall, comply with the following: (i) maintain its own separate books, accounting records, bank accountsThe Company shall be, and other entity documents and records separate from those of the Member or any Affiliate thereof; (ii) at all times shall hold itself out to the public as and all other Persons as, a legal entity separate and distinct from the Member, any Affiliate thereof or any other PersonPerson (including any Affiliate), and not shall correct any known misunderstanding regarding its status as a department or separate entity, shall conduct business solely in its own name, shall not identify itself as a division of any Person, it being understood that, as contemplated by Section 21 hereof, of its Affiliates (except to the extent that the Company may be disregarded is treated as an entity separate from its Member a division of the Stockholder for federal, state and/or local income tax purposes;), and shall not identify any of its Affiliates as a division of the Company. The Company shall not permit its name to be used by any Affiliate of the Company in the conduct of such Affiliate’s business, nor shall the Company use the name of any Affiliate in the conduct of the Company’s business. (iiiii) The Company shall file its own tax returns, if any, as may be required under applicable law, to the extent not part of a consolidated group filing a consolidated return or treated as a disregarded entity, and pay any taxes so required to be paid under applicable law;. (iii) The Company shall maintain all of its books, records and financial statements separate from those of any Affiliates, except that such financial statements may be consolidated to the extent consolidation is required by law or generally accepted accounting principles and such financial statements make clear that the Company is separate from each Affiliate. (iv) not commingle its assets Assets of the Company shall be separately identified, maintained and segregated. Except in connection with the servicing thereof, the assets of the Member, any Affiliate thereof or Company shall not be commingled with those of any other Person and not hold itself out as being liable for the debts of another; (v) conduct its business in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary to Person. The Company shall maintain its existence; (vi) maintain and provide when requested separate financial statementsassets in such a manner that it would not be costly or difficult to identify, (which may be unaudited), showing segregate or ascertain its assets and liabilities from those of any other Person. The Company shall maintain bank accounts that are separate and apart from those of any other Person, including, without limitation, Affiliates of the Company. (v) The Company shall comply with all corporate formalities to maintain and not to have preserve its assets listed on separate existence, including holding meetings of or obtaining the financial statement consent of any other Person; provided however that its Board, as appropriate and at least annually, and maintaining separate current and accurate minute books. (vi) Other than organizational expenses, the Company may report its financial statements on a consolidated basis with one or more Affiliates as may be required or permitted by generally accepted accounting principles (provided that any such consolidated financial statements shall contain appropriate footnote(s) indicating that such party and its affiliates are separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documents); (vii) separately manage its liabilities from those of the Member or any Affiliate thereof and pay its own liabilitiesdebts, obligations liabilities and indebtedness expenses only out of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain of the organizational costs of the Company, and the funds. The Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereof; (viii) except for capital contributions and distributions, maintain an arm’s length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis; (ix) pay the salaries of its own employees, if any, from and maintain a sufficient number of employees in light of its own assets;contemplated business operations. (xvii) The Company shall maintain an arm’s length relationship with its Affiliates; and all transactions entered into by the Company with any Affiliate shall be (i) on such terms and conditions (including terms relating to amounts paid thereunder) as would be generally available if such business transaction were with an entity that was not an Affiliate in comparable transactions, (ii) pursuant to enforceable agreements, and (iii) approved by a vote of the Board. (viii) The Company shall not hold out its credit or assets as being available to satisfy the obligations of others;others nor guarantee the obligation of any Person. (xiix) The Company shall allocate fairly and reasonably any overhead for shared office space;space that it shares with any Affiliate and the costs of services performed for the Company by an employee of an Affiliate. (xiix) The Company shall use separate stationery, invoices and checks bearing its own name; (xiii) except as contemplated by the Basic Documents, not pledge its assets for the benefit that are separate from those of any other Person, or create, incur or permit to exist any lien on . The Company shall have its own tax identification number. (xi) The Company shall not grant a security interest in its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for to secure the obligations of any other Person;. (xivxii) correct any known misunderstanding regarding its separate identity; (xv) refrain from engaging in any business activities without having The Company shall maintain adequate capital in light of its contemplated business purpose, operations, transactions and liabilitiesliabilities (provided, provided that no Stockholder of the foregoing Company shall not require the Member have any obligation to make any contribution of capital contribution to the Company). (xiii) The Company shall not, directly or indirectly, engage in excess any business or activity other than the actions required or permitted to be performed under Section 7 or this Section 10. (xiv) The Company shall not incur any indebtedness, liability, obligation or expense, own any assets, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other), or transfer or dispose of any assets, except that it may pledge one or more of the capital contributions made on Permitted Holdings as security for “repo” or similar financing that provides for no recourse beyond the date hereof as described assets of the Company, and except for fees, expenses, indemnities and other obligations incurred directly in connection with the underlying assets or the securitization transaction. (xv) The Company shall not make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, other than any Permitted Holding or otherwise permitted under Section 16;7. (xvi) The Company shall maintain complete records of all transactions (including all transactions with any Affiliate). (xvii) The Company shall comply with all requirements of applicable law regarding its operations and shall comply with the provisions of this Agreement. (xviii) The Company shall not, except in accordance with Section 7, sell all or substantially all of its assets or acquire all or substantially all of the assets or capital stock or other ownership interests of any other entity. (xix) The Company shall not acquire any securities of its Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber Entities; andStockholders. (xx) have a Board of Managers separate from that The Company shall cause the Directors, Officers, agents and other representatives of the Member Company to act at all times with respect to the Company consistently and any other Person in furtherance of the foregoing and cause in the Board best interests of Managers to observe all other limited liability company formalities, including maintenance of current minute booksthe Company. (exxi) The Company shall not assume not, to the liabilities of the Member fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, or any Affiliate thereof and shall not guarantee the liabilities of the Member or any Affiliate thereofmerger other than such transfers as are contemplated under Section 7. Failure of the Company, or the Member Stockholder, or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member Stockholders or the ManagersDirectors. (f) So long as any Obligation is outstanding, the Company shall not: (i) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate; (ii) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 10; (iii) incur, create or assume any indebtedness other than (i) the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (iv) except in connection with the Time Deposit Accounts, the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities), except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions; (v) engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than (1) a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision of the Basic Documents; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (vi) except for the Timber Entities and as otherwise contemplated or permitted by the Basic Documents, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).

Limitations on the Company’s Activities. (ai) This Section 10 9(d) is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity. Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Company shall not: (i) transfer the limited liability company and/or partnership interests, as the case may be, of any Timber Entity except as permitted by Section 8(j); or. (ii) except as provided in that certain Master Stumpage Agreement, dated the date hereof, between the Timber Entities and, inter alia, as the case may be, TimberStar Texarkana TRS LP, TimberStar Louisiana TRS LP, and TimberStar Nacogdoches TRS LP, cause or permit any Timber Entity to distribute, transfer or otherwise dispose of any of its interest in the Timberlands to the Member (or any Person related to the Member), or commit to do so, until after the one year anniversary of the date hereof. (b) The Member shall not, so long as any Obligation is outstanding, amend, alter, change or repeal the definitions definition of “Independent Manager” or “Special Member” or Sections 5(g) 5(c), 7, 8, 9, 10, 1116, 1220, 1321, 14, 1922, 23, 24, 25, 26, 27, 28, 33 29 or 31 or Schedule A of this Agreement without the unanimous written consent of Member and the Independent Manager unless the Approval Condition is satisfiedManager. Subject to this Section 109(d), the Member reserves the right to amend, alter, change or repeal any provisions contained in this Agreement in accordance with Section 3331. (ciii) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Member, any Manager Officer or any other Person, neither the Member nor any Officer nor any other Person shall be authorized or empowered, nor shall they permit the Company, without the prior unanimous written consent of the Member and all Independent Managers, to take any Material Action, provided, however, that so long as any Obligation is outstanding, the Company shall not take, nor shall the Member, any Manager, or any other Person be authorized or empowered on behalf of the Company to take, any Material Action without the prior unanimous written consent of the Board of Managers, including the Independent Manager; provided, however, that for so long as any Obligation is outstanding, the Board of Managers Member may not authorize the taking of any such Material Action Action, unless there is at least one Independent Manager then serving in such capacity. (div) The Member shall cause the Company shall to do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. So long as any Obligation is outstanding; provided, however, that the Company shall at all timesnot be required to preserve any such right or franchise if the Member shall determine that the preservation thereof is no longer desirable for the conduct of its business and that the loss thereof is not disadvantageous in any material respect to the Company. The Member also shall cause the Company to: (iA) maintain its own separate books, accounting records, bank accounts, records and other entity documents and records separate from those of the Member or any Affiliate thereof; (ii) at all times hold itself out to the public as a legal entity separate from the Member, any Affiliate thereof or any other Person, and not as a department or division of any Person, it being understood that, as contemplated by Section 21 hereof, the Company may be disregarded as an entity separate from its Member for federal, state and/or local income tax purposes; (iii) file its own tax returns, if any, as may be required under applicable law, and pay any taxes so required to be paid under applicable law; (iv) not commingle its assets with assets of the Member, any Affiliate thereof or any other Person and not hold itself out as being liable for the debts of another; (v) conduct its business in its own name and through its own authorized officers and agents and strictly comply with all organizational formalities necessary to maintain its existence; (vi) maintain and provide when requested separate financial statements, (which may be unaudited), showing its assets and liabilities statements that are separate and apart from those of any other Person (except that such Person’s financial position, assets, results of operations and not to have its assets listed on cash flows may be included in the financial statement of any other Person; provided however that the Company may report its consolidated financial statements on a consolidated basis of an Affiliate of such Person in accordance with one or more Affiliates as may be required or permitted by generally accepted accounting principles (GAAP, provided that (i) any such consolidated financial statements shall contain appropriate footnote(s) indicating do not suggest in any way that such party Person’s assets are available to satisfy the claims of its Affiliate’s creditors and its affiliates are (ii) such assets shall also be listed on such Person’s own separate legal entities and maintain records, books of account and bank accounts separate from each other, except as otherwise contemplated by this Agreement and the Loan Documentsbalance sheet); (viiB) separately manage its liabilities hold itself out as being a Person separate and apart from those each other Person and not as a division or part of the Member or any Affiliate thereof and pay its own liabilities, obligations and indebtedness of any kind, including all administrative expenses, from its own separate assets, provided that the Initial Member or any Affiliate thereof may pay certain of the organizational costs of the Company, and the Company shall reimburse the Member or any such Affiliate thereof for its fairly allocable portion of shared expenses paid by the Member or such Affiliate thereofanother Person; (viiiC) except for capital contributions and distributions, maintain an arm’s length relationship with conduct its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis; (ix) pay the salaries of its own employees, if any, from its own assets; (x) not hold out its credit or assets as being available to satisfy the obligations of others; (xi) allocate fairly and reasonably any overhead for shared office space; (xii) use separate stationery, invoices and checks bearing business in its own name; (xiiiD) exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and maintains an arm’s-length relationship with its Affiliates; (E) maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person; (F) observe all applicable entity-level formalities in all material respects; (G) not commingle its assets with those of any other Person, and hold its assets in its own name, except for disbursements or payments made by Borrower through a central disbursement account controlled by an Affiliate of Borrower as agent for Borrower in accordance with that certain Cash Agency Agreement entered into by Borrower in the form attached as Exhibit B; (H) not acquire obligations or securities of its direct or indirect equityholders; (I) except as contemplated by the Basic Documents, not pledge its assets for the benefit of any other Person, Person and not make any loans or create, incur or permit advances to exist any lien on its assets (including, without limitation, the limited liability company and/or partnership interests, as the case may be, of the Timber Entities while owned by the Company), or enter into any guarantees or otherwise become liable for the obligations of any other Person;; and (xiv) correct any known misunderstanding regarding its separate identity; (xv) refrain from engaging in any business activities without having adequate capital in light of its contemplated business purpose, operations, transactions and liabilities, provided that the foregoing shall not require the Member to make any capital contribution to the Company in excess of the capital contributions made on the date hereof as described in Section 16; (xviJ) not acquire any securities of its the Member; provided however that the Company may hold the Member Note and the Transferee Member Note; (xvii) maintain at least one Independent Manager in accordance with Section 14; (xviii) not cause or permit any provision of the Paying Agency Agreement or, for so long as the Company owns the limited liability company and/or partnership interests of any Timber Entity, the organizational or governing document of such Timber Entity to be amended, modified, waived or terminated without the prior written consent of Seller, provided that Seller shall not unreasonably withhold or delay its consent to an amendment, modification, waiver or termination of any provision of the organizational or governing document of such Timber Entity other than those covenants relating to separateness and bankruptcy remoteness set forth in Section 9(j)(iv) of the limited liability company operating agreement and in Section 9(c)(iv) of the limited partnership agreement, as the case may be, of each Timber Entity; (xix) for so long as the Company owns the limited liability company and/or partnership interests, as the case may be, of any Timber Entity, not cause or permit such Timber Entity to make any distribution to the Company other than in the form of cash or, subject to Section 8(j), equity interests in other Timber Entities; and (xx) have a Board of Managers separate from that of the Member and any other Person and cause the Board of Managers to observe all other limited liability company formalities, including maintenance of current minute books. (e) The Company shall not assume the liabilities of the Member or any Affiliate thereof and shall not guarantee the liabilities of the Member or any Affiliate thereof. Failure of the Company, or the Member or the Board of Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the ManagersMember. (fv) So long as any Obligation is outstanding, the Member shall not cause or permit the Company shall notto: (iA) engage in any business unrelated to the Property; (B) own any assets other than those related to its interest in the Property (including any additional property acquired pursuant to any Zoning Lot Expansion Documents and Rights) and does not and will not own any assets on which Lender does not have a Lien, other than excess cash that has been released to Borrower pursuant to the Basic Documents; (C) except as contemplated by the Basic Documents, guarantee any obligation of any Person, including any Affiliate; (iiD) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under Section 7, the Basic Documents or this Section 109(d); (iiiE) incur, create or assume any indebtedness other than (i) the loan evidenced by the Timber Note, (ii) the Company’s obligations under the LOC Reimbursement Agreement, (iii) the Company’s obligations under the Paying Agency Agreement, (iv) filing, accounting, or attorneys’ fees, (v) the Company’s obligations under the Interest Rate Protection Agreement, (vi) liabilities for federal, state and local taxes and other governmental fees and assessments, or (vii) such other indebtedness as may be expressly permitted under the Basic Documents; (ivF) except in connection with to the Time Deposit Accountsfullest extent permitted by law, the Member Note and the Transferee Member Note, make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person (other than limited liability company and/or partnership interests, as the case may be, in the Timber Entities), except that the Company may invest in those investments permitted under the Basic Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Basic Documents and permit the same to remain outstanding in accordance with such provisions; (v) engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than (1) a Timber Entity Ownership Interest Transfer permitted under Section 8(j), and (2) such other activities as are expressly permitted pursuant to any provision of the Basic Documents; provided, however, that the foregoing prohibition shall not apply with respect to any dissolution arising or occurring pursuant to Section 18-802 of the Act or otherwise required to occur pursuant to any applicable law; or (viG) except for the Timber Entities and as otherwise contemplated or permitted by the Basic Documents, form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other).