Contract
Exhibit
10.38
THIRD
AMENDMENT TO NOTE PURCHASE AGREEMENT
This
Third Amendment to Note Purchase Agreement (the “Amendment”)
is
entered into by and among Xxxx Resources, a Delaware limited partnership
(“Borrower”),
Xxxx
Xxxxxxx Life Insurance Company, a Massachusetts corporation, and Xxxx Xxxxxxx
Variable Life Insurance Company, a Massachusetts corporation (Xxxx Xxxxxxx
Life
Insurance Company and Xxxx Xxxxxxx Variable Life Insurance Company are
individually and collectively referred to herein as “Note
Holders”).
RECITALS
Borrower
and Note Holders entered into that certain Note Purchase Agreement dated
March
29, 2001, as amended by First Amendment to Note Purchase Agreement dated
October
24, 2001, Second Amendment to Note Purchase Agreement dated August 8, 2003,
and
various other letter agreements (such Note Purchase Agreement, as previously
amended and as amended herein is referred to as the "Agreement"),
in
connection with the sale and purchase of certain Class A Fixed Rate Senior
Secured Notes all dated March 29, 2001, in the aggregate principal amount
of
$30,000,000. Borrower and Note Holders wish to further amend the Agreement
in
certain respects. This Third Amendment supercedes and replaces all prior
amendments to the Agreement. Unless otherwise indicated all capitalized terms
in
this Amendment shall have the meanings attributed to them in the Agreement.
NOW,
THEREFORE, the parties agree as follows:
1. Section
4.7
of the
Agreement is hereby amended to read as follows: “4.7 Payments
from Collateral Account.
With
respect to monies deposited in the Collateral Account pursuant to Section 5.5,
Section
5.6,
Section
9.3
and
Section
9.4
hereof,
such monies, including any interest or earnings thereon, on deposit in the
Collateral Account shall be disbursed from the Collateral Account on each
Quarterly Payment Date as a separate incremental principal prepayment to
reduce
the outstanding principal balance of the Notes, and shall, in Administrative
Agent’s sole discretion, be subject to the applicable Prepayment Premium, and
shall not be deemed part of or applied toward any required annual principal
payment or monthly interest payment due under Section 4.3 hereof. All interest
and earnings on such monies held in the Collateral Account shall belong to
Borrower and shall be applied as against the Notes as set forth above unless
notice is given to the contrary by Borrower; provided, if an event of Default
exists, all such earnings and interest shall be disbursed and applied in
the
same manner as the monies otherwise deposited into the Collateral
Account.”
2. Section
5.2 (a)
of
the
Agreement is hereby amended to read as follows: “Cutting
Privileges.
Subject
to Section
5.3
hereof,
Borrower shall have the privilege to cut and remove during calendar year
2001
and during each calendar year thereafter (each such calendar year being referred
to herein as a “Cutting Year”) a maximum volume of Merchantable Timber as
provided herein (the “Annual Allowable Cut”); provided,
Borrower may cut and remove 125% of the Annual Allowable Cut in any one Cutting
Year so long as Borrower does not cut and remove more than the applicable
Total
Five-Year Allowable Cut. For purposes of this Section 5.2(a), the term Total
Five-Year Allowable Cut means the aggregate Annual Allowable Cuts for the
Cutting Years 2001 through 2005, 2006 through 2010, 2011 through 2015, 2016
through 2020, 2021 through 2025, and 2026 through 2031, as the case may be.
Subject to Section
5.3,
the
Annual Allowable Cut for Cutting Year 2001 shall be 27MMBF, Xxxxxxxx; and
the
Annual Allowable Cut for the calendar years 2002, 2003, 2004, and 2005 shall
be
32.8MMBF, Xxxxxxxx. Notwithstanding the foregoing, for the fraction of calendar
year 2001 after the date of this Agreement and for the fraction of the calendar
year in which the final payment of principal on the Notes is due, the permitted
volume of cutting in any Category shall be proportionate to the number of
days
in such fractional calendar year (the permitted volume of cutting for such
fractional calendar year shall be multiplied by a fraction, the numerator
of
which is the number of days in the fractional calendar year and the denominator
of which is 365). For purposes of this Section
5.2
all
Merchantable Timber otherwise cut, sold and conveyed by Borrower during any
Cutting Year shall be deemed to have been cut and removed by Borrower hereunder.
The Annual Allowable Cut shall be reduced by the excess volume of Timber
cut or
removed during the preceding Cutting Years pursuant to Section
5.5
hereof,
unless and until Borrower deposits into the Collateral Account the amounts
required under subsection 5.5(a) below with respect to such
overcutting.”
3. Section
5.5(a) of
the
Agreement is hereby amended to read as follows: “Excess
Cutting or Removal.
Subject
to the provisions of Section
5.3
hereof,
Borrower may cut or remove volumes of Merchantable Timber in excess of the
volumes permitted under Section
5.2
hereof
during any Cutting Year, provided
Borrower
deposits into the Collateral Account, in the manner provided for hereunder,
an
amount equal to the sum of the products obtained by multiplying (i) the
differences between the volumes for each Category of Merchantable Timber
actually cut and removed during any Cutting Year and the permitted volume
for
each such Category established pursuant to Section
5.2
for such
Cutting Year, by (ii) the Administrative Unit Values of each such Category
set forth in the following subsection (b).”
4. Section
5.6(a)
of the
Agreement is hereby amended to read as follows: “Subject to compliance with all
provisions of this Section
5.6,
and
provided (i) no Event of Default exists and is continuing hereunder, and
(ii) the Loan to Value Ratio is fifty percent (50%) or less before such
sale, and will continue to be fifty percent (50%) or less after such sale,
Borrower may, from time to time, sell portions of the Land, and the Holders
shall release in the manner hereinafter provided such portions of the Land,
and
any Timber thereon, from the Lien of the Financing Documents; provided, that,
in
each case, Borrower shall, upon request of Administrative Agent, deposit
into
the Collateral Account an amount equal to one hundred percent (100%) of the
Total Administrative Value of the Land and Timber to be conveyed and released,
as determined by Borrower as of the date of such sale and release; provided
such
Administrative Value shall, in Administrative Agent’s sole discretion, be
subject to independent verification by the Forestry Consultant of the accuracy
of the information set forth therein; and provided further, however, any
such
deposits into the Collateral Account shall, in Administrative Agent’s sole
discretion, be subject to Section 4.3(e) above; and provided further, that
such
Total Administrative Value shall be adjusted to take into consideration the
value of the Land and Timber being released and the impact, if any, of the
release upon the overall security position of the Administrative Agent in
the
remaining encumbered Land and Timber as well as the amount of the outstanding,
unpaid balance due under the Notes as of the date of such sale and
release.
5. Section
8.1(v)
is
hereby amended to read as follows: “Additional
Liens.
Place,
incur, assume or suffer to exist, any Lien upon any of its Property, assets
or
revenues, whether now owned or hereafter acquired, except:
…
(v)
Other Liens securing Debt in an aggregate principal amount not exceeding
$2,000,000 at any time.” The definition of “Debt” in Annex
II of
the
Agreement is hereby amended to include payment obligations under local
improvement districts.
6. Section
8.5
of the
Agreement is hereby amended to read as follows: “Distributions
to Partners.
Make
any distributions of cash or other Property to any of its partners, or redeem
any outstanding equity interest in Borrower, except in accordance with the
provisions of this Section 8.5,
as
follows: So long as no Default or Event of Default shall exist hereunder
either
before or after such distribution, Borrower shall be permitted to distribute,
on
a cumulative, Calendar Year Basis, as defined below, to each of its partners,
no
more frequently than once per calendar quarter, fifty percent (50%) of Net
Income, excluding distributions to pay the estimated federal and state income
tax payable by each partner (or its constituent partners or members) on such
partner's share of the taxable income of Borrower (as calculated for federal
income tax purposes); provided, however, in no event shall such quarterly,
cumulative distributions exceed seventy-five percent (75%) of Net Income
on a
Calendar Year Basis; and provided further, that Borrower may not purchase,
redeem or retire any outstanding partnership units if after giving effect
to any
such purchase, redemption, or retirement, Borrower would be in violation
of any
of the terms or covenants of this Agreement or the other Financing Statements.
Prior to any such distribution, Borrower's chief financial officer shall
prepare
and deliver to the Administrative Agent a sworn certificate of distribution
and
a brief summary of the Borrower's methodology in establishing the amount
of the
dividends paid.
For
purposes of this Section
8.5,
for the
calendar year 2002, the foregoing distributions test in the preceding paragraph
will be calculated 2 ways: First, the applicable distributions will be those
actually made during calendar year 2002. Second, the applicable distributions
will be those made during the second, third and fourth quarters of 2002,
and the
first quarter of 2003. For calendar year 2003 and subsequent calendar years,
the
applicable distributions shall be those made during the second, third and
fourth
quarters of the calendar year in question, and the first quarter of the
subsequent calendar year.
7. Section
8.12
of the
Agreement is hereby amended to read as follows: “Subsidiaries;
Collateral Ownership.
(a)
Except for an Affiliate or Subsidiary that does not own any Timber Property,
create, acquire or otherwise invest in any Affiliate or Subsidiary or (b)
otherwise move, transfer or change the ownership of any of the Timber Property
into an Affiliate or Subsidiary, unless such Affiliate or Subsidiary is a
domestic entity, remains wholly owned by Borrower, becomes an obligor on
the
Notes and agrees to be jointly and severally liable for the obligations
thereunder prior to such action, and becomes a party to the Agreement and
agrees
to be bound by the obligations thereunder prior to such action. If all or
any
portion of the Timber Property is transferred to an Affiliate or Subsidiary,
as
provided above, the lien of the applicable Mortgages shall continue to be
a lien
on the transferred Timber Property, and all timber management, harvest and
other
provisions of the Agreement shall remain in effect.”
8. Section
8.14
of the
Agreement is hereby amended to read as follows: “8.14 Debt
to Total Capitalization.
Debt to
Total Capitalization shall not exceed fifty percent (50%).” The definition of
“Total Capitalization” in Annex
II
of the
Agreement is hereby amended to read: “Total
Capitalization
- means
Debt, plus the greater of: a) book value of partners’ capital, or b) Borrower’s
closing Unit Price at the end of each quarter in question, multtiplied by
the
number of units outstanding, so long as Borrower is publicly traded;
provided,
if
Borrower is required to consolidate the debt of ORM Timber Fund I, L.P. (the
“Timber Fund”), then Borrower may include the total capitalization of the Timber
Fund in the calculation of Total Capitalization.”
9. Annex
II of
the
Agreement is hereby amended to read as follows: “Borrower
- XXXX
RESOURCES, A DELAWARE LIMITED PARTNERSHIP, a Delaware limited partnership,
its
permitted successors and assigns, and its Affiliates and Subsidiaries owning
any
portion of the Timber Property.
10. Annex
II of
the
Agreement is hereby amended to read as follows: “Cash
Flow Coverage Ratio
- means,
as of any date of determination, the ratio of (a) EBITDA for the period of
calculation minus
operating
capital expenditures made by Borrower and its subsidiaries during such period,
to
(b) the sum of (i) Interest Charges during such period plus
(ii) all scheduled payments of principal with respect to Required Debt
Service required to be made by Borrower and its subsidiaries during such
period.”
11. Annex
IV
is
hereby amended to read as follows: “Commercial General Liability Insurance with
Borrower as the named insured and the Holders as additional insureds in
commercially reasonable amounts and terms and issued by an insurer or insurers
reasonably satisfactory to the Holders. A portion of such insurance coverage
may
be maintained in the form of an excess liability (umbrella) policy. Certificates
of insurance and, if the Holders so request, certified copies of the insurance
policies, shall be delivered to the Holders no less than 5 days prior to
the
expiration of the then current policies.”
12. As
amended herein, the Agreement is hereby confirmed and reaffirmed by Borrower
and
Note Holders and shall remain in full force and effect.
IN
WITNESS WHEREOF, Borrower and Note Holders have executed this Amendment as
of
the date(s) written below.
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XXXX
RESOURCES, A DELAWARE LIMITED PARTNERSHIP,
a
Delaware limited partnership,
By: Xxxx
MGP, Inc., a Delaware corporation, its managing partner
By:_________________________________________
Name:_______________________________________
Title:________________________________________
Date:________________________,
2004
|
XXXX
XXXXXXX LIFE INSURANCE COMPANY,
a
corporation incorporated under the laws of the Commonwealth of
Massachusetts
By:_______________________________________
Name:
C. Xxxxxxx Xxxx
Title:
Director
Date:___________________________,
2004
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XXXX
XXXXXXX VARIABLE LIFE INSURANCE COMPANY,
a
corporation incorporated under the laws of the Commonwealth of
Massachusetts
By:________________________________________
Name:
C. Xxxxxxx Xxxx
Title:
Authorized Signatory
Date:_________________________,
2004
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