Exhibit 4.5
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[INSERT FOREST BANK LOGO]
THE FOREST BANK, LLC
Subscription and Contribution Agreement
THE FOREST BANK, LLC
(a Delaware limited liability company)
SUBSCRIPTION AND CONTRIBUTION AGREEMENT
To be Fully Completed by Contributor
When countersigned by The Forest Bank, LLC, a Delaware limited liability
company (the "Forest Bank"), this Subscription and Contribution Agreement (this
"Agreement") shall constitute a subscription by the undersigned contributor (the
"Contributor") for the designated series of class A membership units in the
Forest Bank (the "Class A Units") to be issued by the Forest Bank, in exchange
for the contribution of certain Timber Rights, as defined herein.
Each signatory hereto, if more than one is required because of type of
ownership, must fully complete this Agreement.
Your answers will, at all times, be kept strictly confidential. However,
you hereby agree that the Forest Bank may present this Agreement to such persons
as it deems appropriate in order to assure itself that the offer and sale of
Class A Units will not result in violation of law or regulations.
The parties hereto intend that the contribution of Timber Rights in
exchange for the Class A Units evidenced by this Agreement will be treated as a
tax free contribution of property in exchange for an interest in a partnership
under Section 721 of the Internal Revenue Code of 1986, as amended (the "Code"),
but the failure of the contribution to qualify as such a tax free exchange shall
not impair the validity or binding effect of this Agreement.
1. Miscellaneous Definitions. Capitalized terms used herein and not
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otherwise defined in the context in which they are used shall have the meanings
ascribed to them below.
(a) "Environmental Laws" shall mean local, state and federal environmental
laws, regulations, ordinances and administrative and judicial orders
relating to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Substances.
(b) "FIRPTA Certificate" shall mean the affidavit of the Contributor under
Code Section 1445, certifying that the Contributor is not a foreign
corporation, foreign partnership, foreign trust, foreign estate or
foreign person (as those terms are defined in the Code and the
regulations thereunder).
(c) "Hazardous Substances" shall mean any substance or material whose
presence, nature, quantity or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials is either: (1)
potentially injurious to the public health, safety or welfare, the
environment or the Properties, or (2) regulated, monitored or defined
as a hazardous or toxic substance or waste by any governmental agency,
and Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil, or any products, by-
products or components thereof, and asbestos.
(d) "Property" shall mean the parcel of real property on which the Timber
Rights are located and further described in the Contributor's Easement
and Management Agreement.
(e) "Timber Rights" shall mean the rights to manage, harvest and replant
the present and any future standing timber on the Property and all
rights ancillary to such rights, as evidenced by the Easement and
Management Agreement.
2. Contribution and Subscription. The Contributor hereby subscribes for and
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agrees to acquire the Class A Units designated below in exchange for a
contribution of the Timber Rights, all as evidenced by the Contributor's
execution of this Agreement, the Easement and Management Agreement and the LLC
Agreement (as defined below). The Contributor understands that before this
subscription will be accepted, the Contributor must have properly completed,
executed and returned to the Forest Bank the following:
(a) this Agreement, including two signed signature pages;
(b) the FIRPTA Certificate;
(c) the First Amended and Restated Limited Liability Company Agreement of
the Forest Bank, LLC (the "LLC Agreement"); and
(d) either (1) A Forest Bank Forest Management and Conservation
Easement, or
(2) A Forest Bank Forest Management Easement, if the
Contributor has previously executed a Nature
Conservancy Conservation Easement with The Nature
Conservancy.
either (1) or (2) above, as applicable, is referred to herein as the
"Easement and Management Agreement". A copy of
Contributor's fully executed Easement and Management
Agreement is attached as Exhibit A.
3. Appraisal of Timber Rights. The Contributor acknowledges that (a) the
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Forest Bank has undertaken a timber appraisal of the Timber Rights to be
contributed by the Contributor, a copy of which shall be attached hereto as
Exhibit B and incorporated herein (the "Appraisal"), and (b) the appraised value
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of the Timber Rights determines the number of Class A Units to be issued to the
Contributor in exchange for its contribution of the Timber Rights.
The appraised value of the Timber Rights is $____________ (the "Appraised
Value").
The Contributor understands the Appraisal and agrees with and accepts the
Appraised Value.
4. Contributions of Timber Rights; Issuance of Class A Units. The
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Contributor has carefully reviewed and understands the descriptions of the
different types of Class A Units in the Prospectus.
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The Contributor hereby subscribes to acquire __________________[number]
Class A-____ [type] Units in exchange for a contribution of the Timber Rights to
the Forest Bank.
5. Receipt and Review of the Prospectus. The Contributor acknowledges that he,
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she or it has been furnished and warrants that he or it has carefully reviewed
the Forest Bank's prospectus, dated ________, 2001 and the materials delivered
therewith (collectively, the "Prospectus") and has had the opportunity to ask
questions of the Forest Bank's officers and employees concerning the Prospectus.
In addition, the Contributor acknowledges that he, she or it understands, either
alone or with the help of a tax advisor that is not affiliated with the Forest
Bank, the complicated tax consequences of a contribution of Timber Rights (as
defined below) in exchange for Class A Units and with respect to distributions
and withdraws with respect to the Class A Units.
6. Representations and Warranties of the Contributor. In order to induce the
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Forest Bank to accept this contribution in exchange for Class A Units, the
Contributor represents and warrants to the Forest Bank as provided below:
(a) Representations Regarding the Offering of Units.
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(1) Review of the Prospectus. The Contributor has carefully reviewed and
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evaluated the Prospectus and understands the risks of, and other
considerations relating to, a contribution of timber rights in
exchange for Class A Units.
(2) Response to Questions. The Forest Bank has answered all inquiries that
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the Contributor and his or its advisers or agents, if any, have made
concerning the Forest Bank and its activities, and all other matters
relating to the operations of the Forest Bank and contributions in
exchange for the Class A Units.
(3) Accurate Information. All of the information set forth herein or in
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the Easement and Management Agreement is correct and complete as of
the date of such documents, and if there should be any material change
in such information prior to the acceptance of this Agreement by the
Forest Bank, the Contributor will immediately furnish the revised or
corrected information to the Forest Bank.
(4) Tax Advice. The Contributor has had the opportunity to obtain advice
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regarding the tax consequences of contributing Timber Rights to the
Forest Bank and becoming a Member of the Forest Bank from a tax
advisor, accountant or attorney who is not affiliated with the Forest
Bank, and has either received such advice or declined to take the
opportunity to receive such advice.
(b) Representations Regarding the Contributor and the Property.
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(1) Age. If the Contributor is an individual, he or she is at least 21
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years of age.
(2) Good Standing; Power to Act. If the Contributor is a corporation,
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partnership, limited liability company, trust or other form of
business entity (a "Business Entity"), such entity has been duly
formed, is validly existing and is in good standing under the laws of
the jurisdiction in which it was organized and has all
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requisite powers and authority and all governmental licenses,
authorizations, consents and approvals necessary to own the Property,
contribute the Timber Rights, execute this Agreement, the Easement and
Management Agreement and the LLC Agreement and to perform the
obligations contemplated herein and therein.
(3) Due Authorization. If the Contributor is a Business Entity, the
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execution, delivery and performance of this Agreement, the Easement
and Management Agreement and the LLC Agreement and the consummation of
the transactions contemplated herein and therein have been duly
authorized, adopted and approved by the requisite authorities for such
action, to the extent required by its organizational documents and
applicable law. No other proceedings on the part of the Contributor
are necessary to authorize this Agreement, the Easement and Management
Agreement or the LLC Agreement or the transactions contemplated hereby
and thereby. This Agreement has been duly executed by the Contributor
and is a valid and binding obligation of the Contributor, enforceable
against it in accordance with its terms.
(4) Title to the Property. Except as disclosed below, the Contributor has
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good and marketable title to the Property and Timber Rights, free and
clear of all liens and encumbrances of any kind and the right to
convey the Timber Rights related to the Property in accordance with
the terms of this Agreement, the Easement and Management Agreement and
the LLC Agreement.
Exceptions: __________________________________________________________
__________________________________________________________
__________________________________________________________
Note: If there are exceptions to good and marketable title,
Contributor may need to obtain subordination of any other liens
affecting the Timber Rights before this Agreement will be accepted by
the Forest Bank.
(5) Term and Character of Ownership. Contributor acquired title to the
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Property in __________________ [month and year] and has owned the
property continuously for at least one full year prior to the date of
this Agreement. The Contribution has not held the Property or the
Timber Rights as inventory primarily for sale to customers in the
ordinary course of a trade or business of the Contributor.
(6) Taxes. To Contributor's best knowledge, all taxes which are due and
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payable with respect to the Property have been timely paid and no
examination, investigation, claim, assessment, deficiency or other
proceeding is pending or, threatened with respect to the Property or
Timber Rights.
(7) Environmental Matters. To Contributor's best knowledge, there are no
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(a) Hazardous Substances on the Property or any portion thereof in
violation of any Environmental Laws, or (b) spills, releases,
discharges, or disposal of Hazardous Substances that have occurred or
are presently occurring on, onto or from the
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Property, or any portion thereof, or (c) PCB transformers serving, or
stored on, the Property, or any portion thereof. To Contributor's best
knowledge, the Property is in compliance with all applicable
Environmental Laws.
(8) Condemnation and Eminent Domain. There are no condemnation or eminent
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domain proceedings pending with respect to the Property nor has the
Contributor received any written notice from a governmental authority
of any such proceedings threatened against the Property or any part
thereof. To Contributor's best knowledge, there is no proposed
material change in the route, grade or width of, or otherwise
affecting, any street or road on, adjacent to or serving the Property.
(9) Bankruptcy. No Act of Bankruptcy has occurred with respect to the
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Contributor. For the purposes of this Agreement, an "Act of
Bankruptcy" shall occur if Contributor (a) applies for, consents to or
fails to oppose the appointment of a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its Property,
(b) makes a general assignment for the benefit of its creditors, (c)
is adjudicated to be bankrupt or insolvent, (d) files a petition
seeking to take advantage of any state or federal bankruptcy or
insolvency laws, (e) fails to oppose any petition or claim filed
against it in any case or proceeding under any state or federal
bankruptcy or insolvency laws, or (f) takes any corporate action for
the purpose of effecting any of the foregoing.
(10) Broker. The Contributor has not engaged the service of, nor is it or
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will it or will the Forest Bank become liable to, any real estate
agent, broker, finder or any other person or entity for any brokerage
or finder's fee, commissioner or other amount with respect to the
transactions described herein on account of any action by the
Contributor.
7. Agreement to Indemnify the Forest Bank. The Contributor hereby agrees to
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indemnify and hold harmless the Forest Bank and its affiliates from any and all
damages, losses, costs and expenses (including reasonable attorneys' fees) which
they may incur (a) by reason of the Contributor's failure to fulfill any of the
terms and conditions of this Agreement, or (b) by reason of any breach by the
Contributor of any of the representations, warranties or agreements contained
herein or in the Easement and Management Agreement. The Contributor further
agrees and acknowledges that these indemnifications shall survive any sale or
transfer, or attempted sale or transfer, of any of the Contributor's Class A
Units or the Contributor's death.
8. Exculpation of Members. The Contributor acknowledges that he or it is not
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relying upon any Member of the Forest Bank other than the Manager in making his
or its decision to contribute Timber Rights to the Forest Bank. The Contributor
agrees that no Member of the Forest Bank other than the Manager shall be liable
for any action heretofore or hereafter taken or omitted to be taken by any of
them relating to or in connection with the Forest Bank or the Class A Units.
Without limiting the generality of the foregoing, no Member other than the
Manager shall have any obligation, liability or responsibility whatsoever for
the accuracy, completeness or fairness of any or all information about the
Forest Bank.
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9. Signature by the Forest Bank. The Contributor agrees that this Agreement is
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and shall be irrevocable, but the obligations hereunder will terminate if this
Agreement is not counter-signed by the Forest Bank. The Forest Bank will notify
when this Agreement is counter-signed by the Forest Bank and shall return a
fully executed copy of this Agreement to the Contributor at such time.
10. Miscellaneous. The Contributor further understands, agrees and
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acknowledges the following:
(a) At no time has there been any representation, guarantee or warranty to
the Contributor by the Forest Bank or any of its agents or employees
or any other person, expressly or by implication, at variance with the
Prospectus, this Agreement or the Easement and Management Agreement.
(b) This subscription is not transferable or assignable by the
Contributor.
(c) If the Contributor is more than one person, the obligations of the
Contributor shall be joint and several and the representations and
warranties herein contained shall be deemed to be made by and be
binding upon each such person and his heirs, executors,
administrators, successors and assigns.
(d) This subscription, upon acceptance by the Forest Bank, shall be
binding upon the heirs, executors, administrators, successors and
assigns of the Contributor.
(e) This Agreement shall be construed in accordance with and governed by
the laws of the state in which the Property is located.
(f) This Agreement and the documents referred to herein constitute the
entire agreement between the parties respecting the subject matter
hereof and may be amended only by a writing executed by the Forest
Bank and the Contributor.
(g) Captions in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the interpretations or effect of
any term or provision hereof.
(h) The representations, warranties and agreements contained herein and in
the Easement and Management Agreement shall survive the delivery and
payment for the Class A Units.
(i) The Contributor and the Forest Bank shall each pay their own legal
fees and other expenses incurred in connection with this Agreement and
the performance of the transactions contemplated by this Agreement.
(j) The Contributor shall be responsible for the Virginia Recordation Tax
imposed by Virginia Code Section 58.1-302 with respect to any Timber
Rights located in Virginia.
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11. Contributor Data:
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Full Legal Name: _______________________________________________________
Social Security No.:
(or Tax I.D.#) _______________________________________________________
Short Property
Description: _______________________________________________________
Appraised Value of
Timber Rights: _______________________________________________________
Number and Type of
Class A Units: _______________________________________________________
Residence Address:
(including Zip Code) _______________________________________________________
Home Phone: _______________________________________________________
Where Employed: _______________________________________________________
Address of Employer: _______________________________________________________
Business Phone: _______________________________________________________
Address of record
(for all Member notices):_______________________________________________________
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IN WITNESS WHEREOF, subject to acceptance by the Forest Bank, the
Contributor has executed this Agreement to evidence his, her or its contribution
of the Timber Rights to subscribe to purchase the Class A Units issued by The
Forest Bank, LLC, this ____ day of _________, 20___.
__________________________________________
Contributor #1 (Print or Type Name)
__________________________________________
Signature
__________________________________________
Contributor #2 (Print or Type Name)
__________________________________________
Signature
The Forest Bank, LLC has accepted this Agreement this ___ day of ________,
20___.
THE FOREST BANK, LLC
By:______________________________________
Name:
Title:
IN WITNESS WHEREOF, subject to acceptance by the Forest Bank, the
Contributor has executed this Agreement to evidence his, her or its contribution
of the Timber Rights to subscribe to purchase the Class A Units issued by The
Forest Bank, LLC, this ____ day of _________, 20___.
__________________________________________
Contributor #1 (Print or Type Name)
__________________________________________
Signature
__________________________________________
Contributor #2 (Print or Type Name)
__________________________________________
Signature
The Forest Bank, LLC has accepted this Agreement this ___ day of ________,
20___.
THE FOREST BANK, LLC
By:______________________________________
Name:
Title:
EXHIBIT A
Copy of Contributor's Easement and Management Agreement
EXHIBIT B
Copy of Contributor's Timber Rights Appraisal
