CONFIRMED COPY
CROWN PACIFIC LIMITED PARTNERSHIP
______________________________
NOTE PURCHASE AGREEMENT
Dated as of August 1, 1996
______________________________
RE: $91,000,000 SENIOR NOTES, SERIES A, B, C AND D
Due 2006 - 2013
This Volume contains the confirmed Note Purchase Agreement
and Exhibits A-1 through H
[CONFIRMED COPY]
______________________________________________________________________________
______________________________________________________________________________
CROWN PACIFIC LIMITED PARTNERSHIP
______________________________
NOTE PURCHASE AGREEMENT
Dated as of August 1, 1996
______________________________
RE: $91,000,000 SENIOR NOTES, SERIES A, B, C AND D
Due 2006 - 2013
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.................... 1
Section 1.1. Description of the Transaction; Notes................ 1
Section 1.2. Commitment, Closing Date............................. 2
Section 1.3. Failure to Deliver................................... 2
Section 1.4. Expenses............................................. 2
Section 1.5. Several Commitments.................................. 3
Section 1.6. Pre-funding of Commitment............................ 3
SECTION 2. REPRESENTATIONS........................................ 4
Section 2.1. Representations of the Company....................... 4
Section 2.2. Representations of the Managing General Partner...... 4
Section 2.3. Representations of the Purchasers.................... 4
SECTION 3. CLOSING CONDITIONS..................................... 6
Section 3.1. Execution of Agreement and Notes..................... 6
Section 3.2. Closing Certificates................................. 6
Section 3.3. Opinions of Counsel.................................. 6
Section 3.4. Legal Existence and Authority........................ 6
Section 3.5. Insurance............................................ 6
Section 3.6. Environmental Audit.................................. 7
Section 3.7. Appraisals........................................... 7
Section 3.8. Related Transactions................................. 7
Section 3.9. Acquisition Facility Working Capital Facility;
Initial Draw Under Acquisition Facility.............. 7
Section 3.10. Legality............................................. 7
Section 3.11. Payment of Special Counsel Fees...................... 8
Section 3.12. Private Placement Number............................. 8
Section 3.13. [Intentionally Reserved]............................. 8
Section 3.14. Satisfactory Proceedings............................. 8
SECTION 4. COMPANY COVENANTS...................................... 8
Section 4.1. Legal Existence, etc................................. 8
Section 4.2. Insurance............................................ 8
Section 4.3. Taxes, Claims for Labor and Materials,
Compliance with Laws; Environmental and
Natural Resource Matters............................. 9
Section 4.4. Maintenance, Etc .................................... 11
Section 4.5. Nature of Business................................... 12
Section 4.6. Limitations on Current Debt and Funded Debt.......... 12
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Section 4.7. Distributions....................................... 13
Section 4.8. Investments......................................... 13
Section 4.9. Mergers and Consolidations.......................... 15
Section 4.10. Sales of Assets..................................... 16
Section 4.11. Sale of Equity Interests in Restricted
Subsidiaries........................................ 18
Section 4.12. Limitation on Harvesting............................ 18
Section 4.13. Payment of Dividends by Restricted Subsidiaries..... 20
Section 4.14. Guaranties.......................................... 20
Section 4.15. Transactions with Affiliates........................ 20
Section 4.16. Multiemployer Plan Liability and Termination of
Pension Plans....................................... 20
Section 4.17. Reports and Rights of Inspection.................... 20
Section 4.18. Changes in Status of Subsidiaries................... 23
Section 4.19. Repurchase of Notes................................. 24
Section 4.20. Liens............................................... 24
Section 4.21. Ratings............................................. 26
SECTION 5. PREPAYMENT OF NOTES................................... 26
Section 5.1. Required Prepayments................................ 26
Section 5.2. Optional Prepayment With Premium.................... 28
Section 5.3. Notice of Optional Prepayments...................... 28
Section 5.4. Application of Prepayments.......................... 28
Section 5.5. Direct Payment...................................... 28
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR............... 29
Section 6.1. Events of Default................................... 29
Section 6.2. Notice to Holders................................... 31
Section 6.3. Acceleration of Maturities.......................... 31
Section 6.4. Rescission of Acceleration.......................... 31
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS...................... 32
Section 7.1. Consent Required.................................... 32
Section 7.2. Solicitation of Holders............................. 32
Section 7.3. Effect of Amendment or Waiver....................... 33
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.............. 33
Section 8.1. Definitions......................................... 33
Section 8.2. Accounting Principles............................... 50
Section 8.3. Directly or Indirectly.............................. 50
SECTION 9. MISCELLANEOUS......................................... 51
Section 9.1. Registered Notes.................................... 51
Section 9.2. Exchange of Notes................................... 51
Section 9.3. Loss, Theft, Etc. of Notes.......................... 52
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Section 9.4. Powers and Rights Not Waived; Remedies Cumulative... 52
Section 9.5. Notices............................................. 52
Section 9.6. Reproduction of Documents........................... 52
Section 9.7. Survival............................................ 53
Section 9.8. Successors and Assigns.............................. 53
Section 9.9. Governing Law....................................... 53
Section 9.10. Submission to Jurisdiction.......................... 53
Section 9.11. Limitations of Liability............................ 54
Section 9.12. Severability........................................ 54
Section 9.13. Captions............................................ 54
Section 9.14. Duplicate Originals................................. 54
Signatures........................................................... 55
ATTACHMENTS TO NOTE PURCHASE AGREEMENT:
SCHEDULE I -- Names and Commitments of Purchasers
SCHEDULE II -- Investments
EXHIBIT A-1 -- Form of 8.01% Senior Notes, Series A
EXHIBIT A-2 -- Form of 8.16% Senior Notes, Series B
EXHIBIT A-3 -- Form of 8.21% Senior Notes, Series C
EXHIBIT A-4 -- Form of 8.25% Senior Notes, Series D
EXHIBIT B-1 -- Closing Certificate of the Company
EXHIBIT B-2 -- Closing Certificate of the Managing General Partner
EXHIBIT C -- Description of Closing Opinion of Counsel to the Company
EXHIBIT D -- Description of Closing Opinion of Special Counsel to the
Company
EXHIBIT E -- [Intentionally Reserved]
EXHIBIT F -- Description of Closing Opinion of Special Counsel to the
Purchasers
EXHIBIT G -- Subordination Provisions
EXHIBIT H -- Pre-Funding Agreement
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CROWN PACIFIC LIMITED PARTNERSHIP
121 X.X. Xxxxxxxx Street
Portland, Oregon 97204
NOTE PURCHASE AGREEMENT
Re: $91,000,000 Senior Notes, Series A, B, C and D
Due 2006 - 2013
_____________________________________________________
Dated as of
August 1, 1996
To the Purchasers named in Schedule I
to this Agreement
Gentlemen:
CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limited partnership
(together with any Person who succeeds to all or substantially all Crown
Pacific Limited Partnership's assets and business, the "COMPANY"), agrees
with the Purchasers named on Schedule I to this Agreement (the "PURCHASERS")
as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
SECTION 1.1. DESCRIPTION OF THE TRANSACTION; NOTES. The Company has duly
authorized the issuance and sale of its Senior Notes due 2006 - 2013 in an
aggregate principal amount not to exceed $91,000,000, to be comprised of Series
A Notes in an aggregate principal amount of $6,490,000, Series B Notes in an
aggregate principal amount of $50,000,000, Series C Notes in an aggregate
principal amount of $19,510,000 and Series D Notes in an aggregate principal
amount of $15,000,000. The Notes (such term and all other capitalized terms not
otherwise defined herein shall have the respective meanings assigned thereto in
SECTION 8) are to be dated the date of issue, to bear interest at the rate of
8.01%, in the case of the Series A Notes, 8.16%, in the case of the Series B
Notes, 8.21%, in the case of the Series C Notes, and 8.25%, in the case of the
Series D Notes, per annum prior to maturity payable semiannually in arrears on
February 1 and August 1 in each year (commencing February 1, 1997) until the
principal amount thereof shall be due and payable, to bear interest on overdue
principal (including any overdue prepayment of principal) and premium, if any,
and (to the extent permitted by law) on any overdue installment of interest at
the Overdue Rate, to be expressed to mature on August 1, 2006, in the case of
the Series A Notes, August 1, 2011, in the case of the Series B Notes, August 1,
2011, in the case of the Series C Notes, and August 1, 2013, in the case of the
Series D Notes, and to be substantially in the respective forms attached hereto
as Exhibits A-1, A-2, A-3 and A-4.
Interest on the Notes will be computed on the basis of a 360-day year of
twelve 30-day months. The Notes are not subject to prepayment or redemption
at the option of the Company prior to their expressed maturity dates except
on the terms and conditions and in the amounts and with the premium, if any,
set forth in SECTION 5.
SECTION 1.2. COMMITMENT, CLOSING DATE. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each Purchaser,
and such Purchaser agrees to purchase from the Company, on August 13, 1996, or
in the event that the Company cannot perform all of the conditions set forth in
SECTION 3 by such date, then such other Business Day not later than September
30, 1996 as such conditions can be satisfied or such other Business Day as the
Company and the Purchasers shall specifically agree upon (the "CLOSING DATE"),
the Notes specified opposite such Purchaser's name in Schedule I at a price of
100% of the principal amount thereof.
Delivery of the Notes to be purchased will be made at the offices of
Xxxxxxx and Xxxxxx, 000 X. Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 at or about
12:00, noon, Chicago, Illinois time, on the Closing Date against payment
therefor in Federal funds or other immediately available funds at the
principal office of Bank of America National Trust and Savings Association in
the amount of the purchase price. The Note to be delivered to each Purchaser
on the Closing Date will be delivered to such Purchaser in the form of a
single registered Note of each series to be purchased by such Purchaser in
the form attached hereto as Exhibit A-1, A-2, A-3 and/or A-4, as the case may
be, for the full amount of such Purchaser's purchase of such series (unless
different denominations are specified by such Purchaser), registered in such
Purchaser's name or in the name of such Purchaser's nominee specified in
Schedule I.
SECTION 1.3. FAILURE TO DELIVER. If, on the Closing Date, the Company
fails to tender to any Purchaser the Notes to be issued to such Purchaser or if
the conditions specified in SECTION 3 hereof have not been fulfilled, such
Purchaser may thereupon elect to be relieved of all further obligations under
this Agreement; PROVIDED that such election shall not relieve the Company from
any of its obligations hereunder or waive any of such Purchaser's rights against
the Company. Without limiting the foregoing, if the conditions specified in
SECTION 3 hereof have not been fulfilled, each Purchaser may waive compliance by
the Company with any such condition to such extent as such Purchaser in its sole
discretion may determine.
SECTION 1.4. EXPENSES. Whether or not the transactions herein
contemplated shall be consummated, the Company agrees to pay all expenses
relating to the transactions contemplated by this Agreement, including but not
limited to:
(a) the cost of reproducing this Agreement, the Notes and all
other documents required or contemplated hereunder;
(b) the reasonable fees and expenses of Xxxxxxx and Xxxxxx, special
counsel to the Purchasers;
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(c) reasonable out-of-pocket expenses of the Purchasers;
(d) the cost of delivering to each Purchaser at its home office,
insured to its satisfaction, the Notes purchased thereby on the
Closing Date;
(e) all reasonable fees and expenses (including, without limitation,
reasonable attorney's fees) incurred by any Holder in connection with the
enforcement of the obligations of the Company under this Agreement or the
Notes; and
(f) all expenses (including reasonable attorney's fees) in connection
with any amendments, waivers or consents requested or agreed to by the
Company in connection with this Agreement or the Notes (whether or not the
same are actually executed and delivered), including, without limitation,
any amendments, waivers, or consents resulting from any work-out,
renegotiation or restructuring relating to the performance by the Company of
its obligations under this Agreement and the Notes;
PROVIDED that each Person that has incurred or incurs expenses related to the
subject matter of this Agreement shall use its best efforts to submit
promptly to the Company invoices with respect to such expenses. The Company
also agrees that it will pay and save the Purchasers harmless against any
and all liability with respect to stamp and other taxes (except for taxes on
any Purchaser's gross or net income), if any, which may be payable or which
may be determined to be payable in connection with the execution and delivery
of this Agreement or the Notes, whether or not any Notes are then
outstanding. The Company agrees to protect and indemnify the Purchasers
against any liability for any and all brokerage fees and commissions payable
or claimed to be payable to any Person in connection with the transactions
contemplated by this Agreement. Each Purchaser hereby represents and
warrants that it has not engaged any investment banker or broker in
connection with its purchase of the Notes, it being understood that BA
Securities, Inc. has acted as placement agent of the Company.
The obligations of the Company under this SECTION 1.4 shall survive the
payment or prepayment of the Notes and the termination of this Agreement.
SECTION 1.5. SEVERAL COMMITMENTS. The obligations of each Purchaser
shall be several and not joint and no Purchaser shall be liable or
responsible for the acts or defaults of any other Purchaser. The obligation
of the Company to consummate the sale of the Notes is contingent upon the
purchase by the Purchasers of 100% of the aggregate principal amount of the
Notes scheduled to be purchased on the Closing Date pursuant to this
Agreement.
SECTION 1.6. PRE-FUNDING OF COMMITMENT. In order to facilitate an
orderly closing on the Closing Date, each Purchaser agrees that upon the
request of the Company made at least 5 days prior to the Closing Date, such
Purchaser shall make its funds required to purchase the Notes to be purchased
by it available to Bank of America National Trust and Savings Association, as
funding agent (the "FUNDING AGENT"), at or prior to 12:00, noon, Chicago,
Illinois time, on the Business Day prior to the Closing Date, in Federal
funds or
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other immediately available funds. The foregoing obligation of each
Purchaser to so make its funds available shall be subject to the condition
precedent that it shall have received a Pre-Funding Agreement executed by the
Company and the Funding Agent in substantially the form attached hereto as
Exhibit H. Each Purchaser agrees by its execution hereof that funds so made
available by it may be invested by the Funding Agent as provided in said
Pre-Funding Agreement.
SECTION 2. REPRESENTATIONS.
SECTION 2.1. REPRESENTATIONS OF THE COMPANY. The Company represents
and warrants that all representations set forth in the form of Closing
Certificate attached hereto as Exhibit B-1 are true and correct as of the
date hereof and are incorporated herein by reference with the same force and
effect as though herein set forth in full.
SECTION 2.2. REPRESENTATIONS OF THE MANAGING GENERAL PARTNER. Crown
Pacific Management Limited Partnership, a Delaware limited partnership
(together with any Person who succeeds to all or substantially all of Crown
Pacific Management Limited Partnership's assets and business, the "MANAGING
GENERAL PARTNER"), represents and warrants that all representations set forth
in the form of Closing Certificate attached hereto as Exhibit B-2 are true
and correct as of the date hereof and are incorporated herein by reference
with the same force and effect as though herein set forth in full.
SECTION 2.3. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser
represents and warrants to the Company that such Purchaser is acquiring the
Notes for the purpose of investment and not with a view to the distribution
thereof, and that such Purchaser has no present intention of selling,
negotiating or otherwise disposing of the Notes it being understood, however,
that the disposition of such Purchaser's Property shall at all times be and
remain within its control. Each Purchaser further represents and warrants to
the Company that such Purchaser has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits
and risks of investing in the Notes and is aware that the Notes have not been
registered under the Securities Act or the securities laws of any state, and
that the sale of each Note is predicated upon such sale being exempt from
registration as an exempt transaction under applicable federal and state
securities laws, and that no state or federal governmental authorities have
made any finding or determination relating to the Notes, and that no state or
federal governmental authority has or will recommend or endorse the Notes.
Each Purchaser further represents and warrants to the Company that at least
one of the following statements is an accurate representation as to the
source of funds to be used by such Purchaser to pay the purchase price of the
Notes purchased by it hereunder (respectively, the "SOURCE"):
(a) The Source is an "insurance company general account" within
the meaning of Department of Labor Prohibited Transaction Exemption
("PTE") 95-60 (issued July 12, 1995), and there is no employee benefit
plan (treating as a single plan, all employee benefit plans maintained
by the same employer or employee organization) with respect to which the
amount of the general account reserves and liabilities for all contracts
held by or on behalf of such employee benefit plan exceed
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ten percent (10%) of the total reserves and liabilities of such general
account (exclusive of separate account liabilities) plus surplus, as set
forth in the NAIC Annual Statement filed with such Purchaser's state of
domicile;
(b) The Source is one or more separate accounts, trusts or a
commingled pension trust maintained by the Purchaser within the meaning
of PTE 90-1 (issued January 29, 1990) and the Purchaser has disclosed to
the Company the names of such employee benefit plans whose assets in
such separate account or accounts or pension trusts exceed 10% of the
total assets or are expected to exceed 10% of the total assets of such
account or accounts or trusts as of the date of such purchase (for the
purpose of this clause (b), all employee benefit plans maintained by the
same employer or employee organization are deemed to be a single plan);
(c) The Source is a bank collective investment fund maintained by
the Purchaser within the meaning of PTE 91-38 (issued July 12, 1991) and
the Purchaser has disclosed to the Company the names of such employee
benefit plans whose assets in such collective investment fund exceed 10%
of the total assets or are expected to exceed 10% of the total assets of
such fund as of the date of such purchase (for the purpose of this
clause (c), all employee benefit plans maintained by the same employer
or employee organization are deemed to be a single plan);
(d) The Source is one or more employee benefit plans, each of which
has been identified to the Company in writing;
(e) The Source is one or more pension funds, trust funds or agency
accounts, each of which is a "governmental plan" as defined in Section
3(32) of ERISA;
(f) The Source is an "investment fund" managed by a "qualified
professional asset manager" or "QPAM" (as defined in Part V of PTE
84-14, issued March 13, 1984), provided that no other party to the
transactions described in this Agreement and no "affiliate" of such
other party (as defined in Section V(c) of PTE 84-14) has at this time,
and during the immediately preceding one year has exercised the
authority to appoint or terminate said QPAM as manager of the assets of
any plan identified in writing pursuant to this clause (f) or to
negotiate the terms of said QPAM's management agreement on behalf of any
such identified plans; or
(g) The Source consists of funds which do not constitute "plan assets".
The Company shall deliver a certificate on the Closing Date which
certificate shall either state that (i) it is neither a "party in interest"
(as defined in Title I, Section 3(14) of ERISA) nor a "disqualified person"
(as defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as
amended), with respect to any plan identified pursuant to paragraphs (b), (c)
or (d) above, or (ii) with respect to any plan identified pursuant to
paragraph (f) above, neither it nor any "affiliate" (as defined in Section
V(c) of PTE 84-14) is described in the proviso to said paragraph (f). As
used in this SECTION 2.3, the term "SEPARATE ACCOUNT" shall have the meaning
assigned thereto in ERISA, the term "PLAN ASSETS" shall have
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the meaning assigned thereto in Department of Labor Regulation 29 C.F.R.
Section 2510.3-101 and the term "EMPLOYEE BENEFIT PLAN" shall have the
meaning assigned thereto in ERISA and shall also include a plan as defined in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended. The
representations contained in such certificate shall be made in reliance upon
and subject to the accuracy of the representation of the Purchasers in this
SECTION 2.3 as to the source of funds to be used by the Purchasers to pay the
purchase price of the Notes to be purchased by the Purchasers.
SECTION 3. CLOSING CONDITIONS.
The obligation of each Purchaser to purchase the Notes to be purchased by
such Purchaser on the Closing Date shall be subject to the performance by the
Company of its agreements hereunder which, by the terms hereof, are to be
performed at or prior to the time of delivery of the Notes and of the
following further conditions precedent:
SECTION 3.1. EXECUTION OF AGREEMENT AND NOTES. On or prior to the
Closing Date this Agreement and the Notes shall have been duly authorized,
executed and delivered by the Company and shall be in full force and effect and
no Default or Event of Default shall exist in the performance by the Company of
any of its obligations thereunder.
SECTION 3.2. CLOSING CERTIFICATES. On the Closing Date, each Purchaser
shall have received (i) from the Company a certificate dated the Closing Date,
substantially in the form attached hereto as Exhibit B-1, and (ii) from the
Managing General Partner a certificate dated the Closing Date, substantially in
the form attached hereto as Exhibit B-2, the truth and accuracy of each of which
shall be a condition to such Purchaser's obligation to purchase the Notes
proposed to be sold to such Purchaser.
SECTION 3.3. OPINIONS OF COUNSEL. On the Closing Date, each Purchaser
shall have received the written opinions, dated in each case as of the Closing
Date, from Ball Xxxxx LLP, counsel to the Company and the Managing General
Partner, from Xxxxxxx & Xxxxx L.L.P., special counsel to the Company, and from
Xxxxxxx and Xxxxxx, special counsel to the Purchasers, their respective opinions
substantially described in Exhibits C, D and F hereto, reasonably satisfactory
in form and substance to such Purchaser.
SECTION 3.4. LEGAL EXISTENCE AND AUTHORITY. On the Closing Date, each
Purchaser shall have received, in form and substance reasonably satisfactory to
such Purchaser and such Purchaser's special counsel, such documents and evidence
with respect to the Company and the Managing General Partner as such Purchaser
or such Purchaser's special counsel may reasonably request in order to establish
the existence and good standing of the Company and the Managing General Partner,
the authorization of the transactions contemplated by this Agreement, the taking
of all appropriate proceedings in connection therewith and compliance with the
conditions set forth in this SECTION 3.
SECTION 3.5. INSURANCE. Prior to the Closing Date, each Purchaser shall
have received from the Company a certificate of the Company evidencing
compliance with the provisions of SECTION 4.2.
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SECTION 3.6. ENVIRONMENTAL AUDIT. Prior to the Closing Date, each
Purchaser shall have received from the Company reasonably requested
environmental information with respect to the Properties owned by the Company or
to be owned by the Company after giving effect to the issuance of the Notes and
the consummation of the transactions described in SECTION 3.8 (including
environmental information with respect to the conversion facilities and
endangered species).
SECTION 3.7. APPRAISALS. Prior to the Closing Date, each Purchaser shall
have received existing appraisal reports reasonably requested by the Purchasers
with respect to the timberlands owned by the Company or to be owned by the
Company after giving effect to the issuance of the Notes.
SECTION 3.8. RELATED TRANSACTIONS. Concurrently with the issuance and
sale of the Notes to the Purchasers on the Closing Date:
(i) the Company shall consummate the sale of the entire aggregate
principal amount of the Notes scheduled to be sold on the Closing Date
pursuant to this Agreement and
(ii) the net proceeds of the sale of the Notes pursuant to this
Agreement shall be applied by the Company to retire a portion of the
Acquisition Facility and to the payment, or provision for payment, of
expenses in consummating the transactions contemplated by this Agreement.
SECTION 3.9. ACQUISITION FACILITY; WORKING CAPITAL FACILITY; INITIAL DRAW
UNDER ACQUISITION FACILITY. On or prior to the Closing Date, the Company shall
have executed and delivered and there shall be in full force and effect an
Amended and Restated Credit Agreement dated as of July 31, 1996 (the
"ACQUISITION CREDIT AGREEMENT") with Bank of America National Trust and Savings
Association and the other banks named therein, pursuant to which there shall
from time to time be available to the Company (subject to certain conditions
precedent set forth therein) not less than $109,000,000 to fund future
acquisitions by the Company of timberlands and related assets (the "ACQUISITION
FACILITY"), and the Company shall have executed and delivered and there shall be
in full force and effect an Amended and Restated Facility B Credit Agreement
dated as of July 31, 1996 (the "WORKING CAPITAL CREDIT AGREEMENT") with Bank of
America National Trust and Savings Association and the other banks named
therein, pursuant to which there shall from time to time be available to the
Company (subject to certain conditions precedent set forth therein) not less
than $40,000,000 for working capital and general partnership purposes of the
Company.
SECTION 3.10. LEGALITY. On the Closing Date, the purchase by each
Purchaser of the Notes proposed to be sold to such Purchaser shall not be
prohibited by any applicable law or governmental regulation, shall not be
subject to any penalty or other onerous condition under or pursuant to any
applicable law or governmental regulation, and such Purchaser shall have
received from the Company such certificates or other evidence as to matters of
fact as such Purchaser may reasonably request to establish compliance with this
condition.
-7-
SECTION 3.11. PAYMENT OF SPECIAL COUNSEL FEES. On the Closing Date, the
Company shall have paid the reasonable fees and expenses of Xxxxxxx and Xxxxxx,
special counsel to the Purchasers, in connection with the purchase of the Notes
by the Purchasers.
SECTION 3.12. PRIVATE PLACEMENT NUMBER. Prior to the Closing Date, the
appropriate filings shall have been duly made with Standard & Poor's CUSIP
Service Bureau, as agent for the National Association of Insurance
Commissioners, in order to obtain a private placement number for each series of
the Notes.
SECTION 3.13. [INTENTIONALLY RESERVED].
SECTION 3.14. SATISFACTORY PROCEEDINGS. All proceedings taken in
connection with the transactions contemplated by this Agreement and all
documents necessary to the consummation thereof, shall have been taken or
delivered, as the case may be, shall be satisfactory in form and substance to
special counsel to the Purchasers, and each Purchaser shall have received a copy
(executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said transactions.
SECTION 4. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount remains
unpaid on any Note:
SECTION 4.1. LEGAL EXISTENCE, ETC. The Company will preserve and keep in
force and effect its legal existence as a limited partnership not taxable as a
corporation, and will cause each Restricted Subsidiary to preserve and keep in
force and effect, its legal existence as a limited partnership, general
partnership or corporation, as the case may be, and all material licenses,
franchises and permits necessary to the proper conduct of its business, PROVIDED
that the foregoing shall not prevent any transaction permitted by SECTION 4.9;
and PROVIDED FURTHER that the Company shall not be obligated to preserve its
status as a partnership not taxable as a corporation if (i) the Company's
failure to preserve such status shall be the result of an amendment to the tax
laws enacted by the Congress of the United States and (ii) after giving effect
to the loss of such status the ratio of Consolidated Cash Flow for the
immediately preceding Four Quarter Period to Pro Forma Maximum Debt Service,
determined as of the date of the loss of such status, would be greater than 1.1
to 1.0, assuming, for the purposes of the computation of Consolidated Cash Flow,
that Consolidated Cash Flow would be reduced by taxes at the applicable tax rate
of the Company for such period had the Company been taxable as a corporation.
SECTION 4.2. INSURANCE. The Company will maintain, and will cause each
Restricted Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers in such forms and amounts (including such deductibles and
self insurance) and against such risks as are customary for companies of
established reputation engaged in the same or similar business activities and
owning and operating similar Properties.
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SECTION 4.3. TAXES, CLAIMS FOR LABOR AND MATERIALS, COMPLIANCE WITH LAWS;
ENVIRONMENTAL AND NATURAL RESOURCE MATTERS. (a) The Company will promptly pay
and discharge, and will cause each Restricted Subsidiary promptly to pay and
discharge, all lawful taxes, assessments and governmental charges or levies
imposed upon the Company or such Restricted Subsidiary, respectively, or upon or
in respect of all or any part of the Property or business of the Company or such
Restricted Subsidiary, all trade accounts payable in accordance with usual and
customary business terms, and all claims for work, labor or materials, which if
unpaid would become a Lien or charge upon any Property of the Company or such
Restricted Subsidiary, PROVIDED that the Company or such Restricted Subsidiary
shall not be required to pay any such tax, assessment, charge, levy, account
payable or claim if (i) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or proceedings which will prevent
the forfeiture or sale of any Property of the Company or such Restricted
Subsidiary or any material interference with the use thereof by the Company or
such Restricted Subsidiary, and (ii) the Company or such Restricted Subsidiary
shall set aside on its books, reserves deemed by it to be adequate with respect
thereto. The Company will promptly comply, and will cause each Subsidiary to
comply, with all laws, ordinances or governmental rules and regulations to which
it is subject, including without limitation, ERISA, the violation of which would
materially and adversely affect the Properties, business, profits or condition
of the Company and its Restricted Subsidiaries, taken as a whole, or would
result in any Lien not permitted under SECTION 4.20.
(b) (1) The Company and its Subsidiaries and their Properties shall
comply in all material respects with any applicable Environmental and
Natural Resource Law;
(2) The Company and its Subsidiaries shall obtain and maintain in good
standing all material Governmental Approvals required for their
operations and their Properties by any applicable Environmental and
Natural Resource Law;
(3) The Company and its Subsidiaries shall not, and shall not permit any
Person to, own or operate on any of its Properties any (i) landfill or
dump or (ii) hazardous waste treatment, storage or disposal facility as
defined pursuant to RCRA or any comparable state law; the Company and
its Subsidiaries shall not use, generate, treat, store, release or
dispose of Hazardous Materials at or on any of its Properties in
quantities materially greater than that which is customary for
operations similar to those of the Company and its Subsidiaries;
(4) The Company and its Subsidiaries shall within ten Business Days
notify the Holders in writing of, and specify the action the Company is
taking and proposes to take with respect thereto and provide any
reasonably requested documents upon learning of, any of the following:
(A) any material liability for response or corrective action,
natural resource damage or other harm pursuant to CERCLA, RCRA or any
comparable state law;
-9-
(B) any material Environmental and Natural Resource Claim arising
from the Company and its Subsidiaries, their operations, their
Properties or any other Property previously owned or operated by
the Company or its Subsidiaries or their predecessors;
(C) any conditions or occurrences at the Properties of the Company
and its Subsidiaries which could reasonably form the basis for a
material Environmental and Natural Resource Claim against the
Company or its Subsidiaries or their Properties;
(D) any material and actual or imminent restriction on the
ownership, occupancy, use, productivity or transferability of the
Properties of the Company or its Subsidiaries (i) arising in
connection with any Release, threatened Release or disposal of a
Hazardous Material, or any Environmental and Natural Resource Law
or (ii) as a consequence of any Harvest/Yield Restriction; or
(E) any other environmental, natural resource, health or safety
condition, which could materially and adversely affect the ability
of the Company to perform its obligations under this Agreement or
the Notes;
(5) At its sole expense (but without thereby waiving any claims it may
have against third parties), the Company and its Subsidiaries will
conduct any investigation, study, sampling and testing, and undertake
any cleanup, removal, remedial or other response action necessary to
remove, clean up or xxxxx any material quantity of Hazardous Material
which is Released or disposed of at or on the Properties in accordance
with any applicable Environmental and Natural Resource Law and any order
or directive from a Governmental Authority having jurisdiction, except
to the extent the Company or its Subsidiaries are diligently contesting
any applicable Environmental and Natural Resource Law or any order or
directive from a Governmental Authority, so long as such contest is in
good faith and by appropriate proceedings and as to which reserves
deemed by the Company to be adequate are maintained and no forfeiture or
material interference with the use of the Properties of the Company and
its Restricted Subsidiaries will result from a failure to comply with
the contested requirement;
(6) (A) The Company agrees, at its sole cost and expense, to defend
(with attorneys reasonably satisfactory to the Holders holding at least
a majority in aggregate principal amount of outstanding Notes), protect,
indemnify and hold harmless the Purchasers, and any Holder, and their
respective officers, directors, trustees, employees and agents (the
"INDEMNITEES") from and against any and all liabilities, obligations
(including removal and remedial actions), losses, damages (including
foreseeable and unforeseeable consequential damages and punitive
damages, which consequential or punitive damages do not result from an
Indemnitee's gross negligence or willful misconduct), penalties,
actions, judgments, suits, orders (whether administrative or judicial),
consent decrees, claims, costs, expenses and disbursements (including
reasonable consultants' fees and disbursements and including all
reasonable
-10-
attorneys' fees whether incurred in a suit or action or any appeals from
a judgment or decree therein or in connection with non-judicial action)
of any kind or nature whatsoever that may at any time be incurred by,
imposed on or asserted against the Indemnitees, the Company or its
Subsidiaries directly or indirectly based on, or arising or resulting
from (i) the actual or alleged presence or Release of any Hazardous
Material on the Properties of the Company or its Subsidiaries or the
removal, handling, transportation, disposal or storage of such Hazardous
Material, (ii) any Environmental and Natural Resource Claim with respect
to the Properties of the Company or its Subsidiaries, or (iii) any
failure to comply, and the resulting cost to come into compliance, with
any applicable Environmental and Natural Resource Laws with respect to
the Properties of the Company or its Subsidiaries and the requirements
of any permits issued under such Environmental and Natural Resource Laws
(collectively, the "INDEMNIFIED MATTERS"), regardless of when such
Indemnified Matters arise, but excluding as to any Indemnitee any
Indemnified Matter resulting directly from gross negligence or willful
misconduct by such Indemnitee or its representative. To the extent that
this indemnity is unenforceable because it violates any law or public
policy, the Company agrees to contribute the maximum portion that it is
permitted to contribute under applicable law to the payment and
satisfaction of all Indemnified Matters;
(B) The Company hereby waives, releases and covenants not to bring
any demand, claim, cost recovery action or lawsuit it may now or
hereafter have or accrue against any Indemnitee arising from the
subject matter of an Indemnified Matter, except as a direct result
of the gross negligence or willful misconduct of such Indemnitee;
(C) The Company agrees to reimburse each Indemnitee for all sums
paid and costs incurred by each Indemnitee with respect to any
Indemnified Matter, within ten (10) Business Days following written
demand therefor, with interest thereon at the Overdue Rate from the
initial date of such written demand, if not paid within such ten
(10) Business Day period; and
(D) Should any Indemnitee institute any action or proceeding at law
or in equity, or in arbitration, to enforce any provision of the
above indemnification (including an action for declaratory relief
or for damages by reason of an alleged breach of any provision of
the above indemnification) or otherwise in connection with the
above indemnification, it shall be entitled to recover from the
Company its reasonable fees and disbursements incurred in
connection therewith if it is the prevailing party in such action
or proceeding.
SECTION 4.4. MAINTENANCE, ETC. The Company will maintain, preserve and
keep, and will cause each Restricted Subsidiary to maintain, preserve and keep,
its Properties (other than timber) which are used or useful in the conduct of
its business (whether owned in fee or a leasehold interest) in good repair and
working order and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times such Properties shall
remain usable in the Company's business. The Company will follow, and will
cause
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each Restricted Subsidiary to follow, prudent industry management
standards with respect to its timber and timber Properties, including the
growing and harvesting of its timber. Nothing in this SECTION 4.4 shall be
construed to (i) limit the Company's ability to sell or otherwise dispose of
assets in accordance with SECTION 4.10, or (ii) prevent the Company from ceasing
to operate any sawmill or other conversion facility if the Board of Control
determines in good faith that such cessation is in the best interest of the
Company. The Company shall engage in prudent management practices with respect
to any acquisition of assets, including conducting any environmental
investigation as is prudent under the circumstances. The Company shall deliver
to each Holder a copy of any environmental report obtained by the Company in
connection with any such acquisition.
SECTION 4.5. NATURE OF BUSINESS. Neither the Company nor any Restricted
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Restricted Subsidiaries would be substantially changed from
the growing and harvesting of timber and manufacture and sale of lumber, plywood
and wood products and related businesses engaged in by the Company and its
Restricted Subsidiaries on the date of this Agreement and described in the
Private Placement Memorandum and other businesses incidental or reasonably
related thereto.
SECTION 4.6. LIMITATIONS ON CURRENT DEBT AND FUNDED DEBT. (a) The
Company will not, and will not permit any Restricted Subsidiary to, create,
assume, incur, guarantee or in any manner be or become liable in respect of any
Current Debt or Funded Debt, except:
(1) Funded Debt evidenced by the Notes;
(2) Funded Debt of the Company outstanding on the Closing Date and
described in Part II of Annex C to Exhibit B-1;
(3) Current Debt and Funded Debt of the Company incurred under the
Working Capital Facility, PROVIDED that the aggregate principal amount
of such Current Debt and Funded Debt outstanding at any one time shall
not exceed $40,000,000;
(4) Additional Current Debt and Funded Debt of the Company and Funded
Debt of a Restricted Subsidiary secured by Liens permitted by SECTION
4.20(g), PROVIDED that on the date that any such Current Debt or Funded
Debt is incurred and after giving effect to the application of the
proceeds thereof:
(i) the ratio of Consolidated Cash Flow for the immediately
preceding Four Quarter Period to Pro Forma Interest Expense for
such period is greater than 2.5 to 1.0; and
(ii) the ratio of Consolidated Cash Flow for the immediately
preceding Four Quarter Period to Pro Forma Maximum Debt Service is
greater than 1.25 to 1.0;
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(5) unsecured Subordinated Funded Debt of the Company to the
Managing General Partner or any Affiliate of the Managing General
Partner, PROVIDED that the aggregate principal amount of such
Subordinated Funded Debt outstanding at any one time shall not
exceed $10,000,000; and
(6) Current Debt or Funded Debt of a Restricted Subsidiary to the
Company or to a Wholly-owned Restricted Subsidiary.
(b) The renewal, extension or refunding of any Current Debt or Funded
Debt issued, incurred or outstanding pursuant to SECTION 4.6(a) shall
constitute the issuance of additional Current Debt or Funded Debt which
is, in turn, subject to the limitations of the applicable provisions of
this SECTION 4.6, PROVIDED that, except to the extent of any increase in
the outstanding principal amount thereof, the commencement of a new
interest period for any Current Debt or Funded Debt as to which interest
is computed with reference to the London Interbank Offered Rate or any
other base rate or the conversion of the base rate used for any such
interest computation shall not be considered a renewal, extension, or
refunding of such Current Debt or Funded Debt for purposes of this
SECTION 4.6.
(c) Any business entity which becomes a Restricted Subsidiary after the
date hereof shall for all purposes of this SECTION 4.6 be deemed to have
created, assumed or incurred at the time it becomes a Restricted
Subsidiary all Current Debt and Funded Debt of such business entity
existing immediately after it becomes a Restricted Subsidiary.
SECTION 4.7. DISTRIBUTIONS. The Company will not make any Distribution
if at the time of such Distribution and after giving effect thereto a Default or
Event of Default shall have occurred and be continuing. In addition, the
Company will not authorize or make any Distribution (i) on any date other than a
Business Day, (ii) in Property other than cash, (iii) which is payable more than
60 days after the date of authorization or declaration, or (iv) in an amount
which, together with all previous Distributions made by the Company for the
quarterly fiscal period most recently ended prior to the date of such
Distribution, exceeds the amount of Available Cash for such quarterly fiscal
period.
SECTION 4.8. INVESTMENTS. The Company will not, and will not permit any
Restricted Subsidiary to, make any Investments in any Person, except:
(a) Investments by the Company and its Restricted Subsidiaries in
and to Restricted Subsidiaries, including any Investment in a
business entity which, after giving effect to such Investment,
becomes a Restricted Subsidiary;
(b) Investments in commercial paper maturing in 270 days or less
from the date of issuance which, at the time of acquisition by the
Company or any Restricted Subsidiary, is rated at least A-1 by
Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc.,
or P-1 by Xxxxx'x Investors Service, Inc. or, if such commercial
paper is not rated by either Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc., or Xxxxx'x Investors Service, Inc.,
the highest rating of another nationally recognized credit rating
agency of similar standing approved in writing by
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the Holders holding at least 66-2/3% in aggregate principal amount of
outstanding Notes;
(c) Investments in direct obligations of the United States of America or
any agency or instrumentality of the United States of America, the
payment or guarantee of which constitutes a full faith and credit
obligation of the United States of America, in either case, maturing in
twelve months or less from the date of acquisition thereof;
(d) Investments in certificates of deposit maturing within one year from
the date of origin, issued by a bank or trust company organized under
the laws of the United States or any state thereof, having capital,
surplus and undivided profits aggregating at least $250,000,000 and
having unsecured Funded Debt outstanding and rated at least AA by
Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc., or Aa
by Xxxxx'x Investors Service, Inc. or, if such unsecured Funded Debt is
not rated by either Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc., or Xxxxx'x Investors Service, Inc., a comparable
rating by another nationally recognized credit rating agency of similar
standing approved in writing by the Holders holding at least 66-2/3% in
aggregate principal amount of outstanding Notes;
(e) receivables arising from the sale of goods and services in the
ordinary course of business of the Company and its Restricted
Subsidiaries, and prepayments, advances or deposits made by the Company
or any Restricted Subsidiary to any Person in the ordinary course of
business in connection with contracts for timber harvesting or the
acquisition of stumpage entered into in the ordinary course of business;
(f) loans or advances in the usual and ordinary course of business to
officers, directors and employees of the Managing General Partner or the
Company for expenses (including moving expenses related to a transfer)
incidental to carrying on the business of the Company or any Restricted
Subsidiary;
(g) Investments in bankers acceptances maturing within 180 days from the
issuance thereof, accepted by a bank or trust company organized under
the laws of the United States or any state thereof, having capital,
surplus and undivided profits aggregating at least $500,000,000 and
having unsecured Funded Debt outstanding and rated at least AA by
Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc., or Aa
by Xxxxx'x Investors Service, Inc. or, if such unsecured Funded Debt is
not rated by either Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc., or Xxxxx'x Investors Service, Inc., a comparable
rating by another nationally recognized credit rating agency of similar
standing approved in writing by the Holders holding at least 66-2/3% in
aggregate principal amount of outstanding Notes;
(h) Investments by the Company and its Restricted Subsidiaries existing
on the date of this Agreement and described in Schedule II hereto;
(i) Investments in any Subsidiary or any other Person organized under
the laws of the United States or Canada or any state or province thereof
which conducts
-14-
substantially all of its business and has substantially all of its
assets within the United States or Canada and which is engaged in
substantially the same business as the Company, PROVIDED that the
aggregate amount of all such Investments made pursuant to this clause
(i) shall not exceed $10,000,000 in any twelve-month period ending on
the date of such Investment or $51,500,000 from and after the Closing
Date (adjusting each such amount annually for the percentage increase or
decrease from the prior calendar year in the Consumer Price Index); and
(j) Guaranties issued in compliance with SECTION 4.14 constituting an
obligation, warranty or indemnity of the Company, not guaranteeing
Indebtedness of any Person, which is undertaken or made in the ordinary
course of business.
SECTION 4.9. MERGERS AND CONSOLIDATIONS. The Company will not, and will
not permit any Restricted Subsidiary to, consolidate with, or be a party to a
merger with, or sell, lease or otherwise dispose of all or substantially all of
its assets to, any other Person; PROVIDED, HOWEVER, that:
(1) any Restricted Subsidiary may merge or consolidate with or
into, or sell, lease or otherwise dispose of all or substantially
all of its assets to, the Company or any Wholly-owned Restricted
Subsidiary so long as in any merger or consolidation involving the
Company, the Company shall be the surviving or continuing entity; and
(2) the Company may consolidate or merge with, or sell all or
substantially all of its assets to, any business entity if:
(i) the surviving or continuing entity or the entity to which all
or substantially all of the Company's assets are sold (the
"SURVIVING ENTITY") shall be either the Company or an entity
organized under the laws of the United States or any state thereof
which conducts substantially all of its business and has
substantially all of its assets within the United States, and in
the case of any such consolidation or merger in which the Company
is not the Surviving Entity or in the case of any such sale, the
Surviving Entity shall (x) expressly assume in writing the due and
punctual payment of the principal of, premium, if any, and the
interest on all of the Notes outstanding according to their tenor
and the due and punctual performance and observance of all of the
covenants in the Notes and this Agreement to be performed or
observed by the Company, and (y) furnish to the Holders an opinion
of independent counsel to the effect that the instrument of
assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of
the Surviving Entity enforceable in accordance with its terms,
which counsel and opinion shall be satisfactory to Holders holding
at least 66-2/3% in aggregate principal amount of the then
outstanding Notes;
(ii) at the time of such consolidation or merger or such sale and
after giving effect thereto (a) no Default or Event of Default
shall have occurred and be continuing and (b) the Consolidated Net
Worth of the Surviving Entity shall
-15-
not be less than the Consolidated Net Worth of the Company
immediately prior to such consolidation or merger or such sale; and
(iii) after giving effect to such consolidation or merger or such
sale, the Surviving Entity would be permitted to incur at least
$1.00 of additional Funded Debt under the provisions of SECTION
4.6(a)(4).
SECTION 4.10. Sales of Assets. (a) The Company will not, and will not
permit any Restricted Subsidiary to sell, lease or otherwise dispose of all or
any substantial part (as defined in paragraph (b) of this SECTION 4.10) of the
assets of the Company and its Restricted Subsidiaries, except as permitted by
SECTION 4.9; PROVIDED, HOWEVER, that:
(1) any Restricted Subsidiary may sell, lease or otherwise dispose
of any substantial part of its assets to the Company or any
Wholly-owned Restricted Subsidiary;
(2) the Company or any Restricted Subsidiary may sell Properties
constituting a substantial part of the assets of the Company and
its Restricted Subsidiaries if (i) such sale shall be for an amount
not less than the fair market value (as determined in good faith by
the Board of Control) of such Properties; (ii) after giving effect
to such sale, no Default or Event of Default shall have occurred
and be continuing; (iii) the Net Proceeds of the sale of such
Properties (to the extent that the Net Proceeds of such sale exceed
the minimum amount required to define a substantial part pursuant
to SECTION 4.10(b)) are either:
(A) applied within the Application Period to pay Senior Funded Debt
of the Company or any Restricted Subsidiary (other than Senior
Funded Debt of a Restricted Subsidiary to the Company or another
Restricted Subsidiary) selected by the Company, which in the case
of the Notes shall be applied if and to the extent a prepayment
pursuant to SECTION 5.1 is required to be made within such
Application Period then in accordance with SECTION 5.1 and
otherwise pursuant to SECTION 5.2; PROVIDED, HOWEVER, in the event
that a Lien encumbering the Property that is the subject of the
sale was given to secure Indebtedness incurred in connection with
the acquisition thereof, the Net Proceeds of such sale may be
applied first to the payment of such Indebtedness and any remaining
Net Proceeds shall be applied as set forth above, or
(B) deposited and held in a separate trust account with a bank or
trust company satisfactory to the Holders holding at least a
majority in aggregate principal amount of the outstanding Notes
(which account may be invested in Investments of the type described
in SECTION 4.8(b), (c), or (d)) and such Net Proceeds shall be
either (x) applied within such Application Period to the
acquisition of productive assets useful in the Company's business,
or (y) committed, pursuant to a binding written contract entered
into by the Company during such Application Period, to be applied
to the acquisition of productive assets useful in the Company's
business (in either case, having a fair market
-16-
value, determined in good faith by the Board of Control, but excluding
in the case of any timberlands any value based on a higher or better use
thereof) not less than the amount of such Net Proceeds so applied,
PROVIDED that the acquisition contemplated by such binding contract
shall be consummated substantially in accordance with the terms thereof
within 90 days after the end of such Application Period, and PROVIDED,
FURTHER, that the Net Proceeds of the sale of any Property shall be
considered to have been applied to an acquisition of Property although
the acquisition occurred prior to the sale of Property giving rise to
such Net Proceeds so long as such acquisition and sale were a series of
related transactions occurring within a 180-day period; and
(iv) within ten Business Days after any sale pursuant to this clause
(2), the Company shall have delivered to the Holders a certificate of
the Board of Control certifying that such sale was for fair market value
received by the Company and that after giving effect to such sale no
Default or Event of Default has occurred and is continuing, and within
ten Business Days after the earlier to occur of (a) the application
pursuant to this clause (2) of the Net Proceeds of any sale or (b) the
last day of any Application Period with respect to any sale, the Company
shall have delivered to the Holders a certificate of the Board of
Control certifying as to the application of the Net Proceeds of such
sale and establishing compliance with the requirements of this clause (2);
(3) the Company may sell timberlands in a like-kind exchange for
a like interest in other timberlands having a fair market value
(determined in good faith by the Board of Control, but excluding any
value based on a higher and better use thereof) of at least the fair
market value of the timberlands so sold, PROVIDED that 30 days prior to
any like-kind exchange, the Company shall have delivered to the Holders
a description of such exchange in sufficient detail to establish
compliance with the foregoing requirements; and
(4) the Company may sell not more than 25,000 acres in the
aggregate of timberlands owned by the Company designated in good faith
by a Responsible Officer for a higher and better use, PROVIDED that ten
Business Days after any such sale, the Company shall have delivered to
the Holders a certificate of a Responsible Officer notifying the Holders
of such sale and certifying as to the number of acres sold pursuant to
this clause (4) and the amount of gross proceeds from such sale and
establishing compliance herewith.
(b) As used in this SECTION 4.10, a sale, lease or other
disposition of assets (other than timber harvested and sold and
inventory sold, in each case, in the ordinary course of business) shall
be deemed to be a "SUBSTANTIAL PART" of the assets of the Company and
its Restricted Subsidiaries if the book value of such assets, when added
to the book value of all other assets sold, leased or otherwise disposed
of by the Company and its Restricted Subsidiaries (other than pursuant
to clauses (1) through (4) above) (x) during the 12-month period ending
with the date of such sale, lease or other disposition, exceeds
$10,000,000 or (y) since December 22, 1994, exceeds $51,500,000,
PROVIDED that each such amount shall be
-17-
adjusted annually from the Closing Date for the percentage increase or
decrease from the prior calendar year in the Consumer Price Index.
SECTION 4.11. SALE OF EQUITY INTERESTS IN RESTRICTED SUBSIDIARIES. (a)
The Company will not permit any Restricted Subsidiary to issue or sell any
Equity Interest (including as "Equity Interest" for the purposes of this SECTION
4.11, any warrants, rights or options to purchase or otherwise acquire an Equity
Interest or other Securities exchangeable for or convertible into an Equity
Interest) of such Restricted Subsidiary to any Person other than the Company or
a Wholly-owned Restricted Subsidiary, except for the purpose of qualifying
directors, or except in satisfaction of the validly pre-existing preemptive
rights of minority shareholders in connection with the simultaneous issuance of
stock to the Company and/or a Restricted Subsidiary whereby the Company and/or
such Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.
(b) The Company will not sell, transfer or otherwise dispose of
any Equity Interest in any Restricted Subsidiary (except to qualify
directors) or any Indebtedness of any Restricted Subsidiary, and will
not permit any Restricted Subsidiary to sell, transfer or otherwise
dispose of (except to the Company or a Wholly-owned Restricted
Subsidiary) any Equity Interest in or any Indebtedness of any other
Restricted Subsidiary, unless:
(1) simultaneously with such sale, transfer, or disposition, all
the Equity Interests and all Indebtedness of such Restricted Subsidiary
at the time owned by the Company and by every other Restricted
Subsidiary shall be sold, transferred or disposed of as an entirety;
(2) the Board of Control shall have determined, as evidenced by
a resolution thereof, that the proposed sale, transfer or disposition of
said Equity Interest and Indebtedness is in the best interests of the
Company;
(3) said Equity Interest and Indebtedness are sold, transferred
or otherwise disposed of to a Person, for a cash consideration and on
terms reasonably deemed by the Board of Control to be adequate and
satisfactory;
(4) the Restricted Subsidiary being disposed of shall not have
any continuing Investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of; and
(5) such sale or other disposition is not prohibited by SECTION 4.10.
SECTION 4.12. Limitation on Harvesting. The Company will not, and will
not permit any Restricted Subsidiary to, harvest timber on its or such
Restricted Subsidiary's timberlands in excess in the aggregate of the following
limitations:
150% of the Planned Volume during any fiscal year of the Company,
-18-
140% of the Planned Volume during any period of two consecutive fiscal
years of the Company,
130% of the Planned Volume during any period of three consecutive fiscal
years of the Company, and
120% of the Planned Volume during any period of four consecutive fiscal
years of the Company;
PROVIDED, HOWEVER, that the Company and its Restricted Subsidiaries may harvest
timber from their timberlands exceeding the limitations set forth above (the
"EXCESS HARVEST") if (i) after giving effect to such Excess Harvest, no Default
or Event of Default shall have occurred and be continuing, (ii) the Net Proceeds
of the sale of such Excess Harvest (based upon the average price received by the
Company and its Restricted Subsidiaries for timber sold during such period) are
either:
(A) applied within the Application Period to pay Senior Funded
Debt of the Company or any Restricted Subsidiary (other than Senior
Funded Debt of a Restricted Subsidiary to the Company or another
Restricted Subsidiary) selected by the Company, which in the case of the
Notes shall be applied if and to the extent a prepayment pursuant to
SECTION 5.1 is required to be made within such Application Period then
in accordance with SECTION 5.1 and otherwise pursuant to SECTION 5.2, or
(B) deposited and held in a separate trust account with the bank
or trust company satisfactory to the Holders holding at least a majority
in aggregate principal amount of the outstanding Notes (which account
may be invested in Investments of the type described in SECTION 4.8(b),
(c), or (d)) and such Net Proceeds shall be either (x) applied by the
Company within the Application Period to the acquisition of timber or
timberland or (y) committed, pursuant to a binding written contract
entered into by the Company during such Application Period, to be
applied to the acquisition of timber or timberland (in either case,
having a fair market value, determined in good faith by the Board of
Control, but excluding any value based on a higher or better use
thereof) not less than the amount of such Net Proceeds so applied,
PROVIDED that the acquisition contemplated by such binding contract
shall be consummated substantially in accordance with the terms thereof
within 90 days after the end of such Application Period, and
(iii) within ten Business Days after any Excess Harvest, the Company shall have
delivered to the Holders a certificate of the Board of Control certifying that
after giving effect to such Excess Harvest no Default or Event of Default has
occurred and is continuing, and within ten Business Days after the earlier to
occur of (a) the application of the Net Proceeds as set forth clause (ii) of
this SECTION 4.12 or (b) the last day of any Application Period with respect to
any Excess Harvest, the Company shall have delivered to the Holders a
certificate of the Board of Control certifying as to the application of the Net
Proceeds of such Excess Harvest and establishing compliance with the
requirements of clause (ii) of this SECTION 4.12.
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SECTION 4.13. PAYMENT OF DIVIDENDS BY RESTRICTED SUBSIDIARIES. The
Company will not and will not permit any Restricted Subsidiary to enter into any
agreement which restricts the ability of any Restricted Subsidiary to declare
any dividend or to make any distribution on any Equity Interest of such
Restricted Subsidiary, PROVIDED that the limited partnership agreement of any
Restricted Subsidiary which is a limited partnership may limit the amount of any
distribution by such Restricted Subsidiary to the amount of available cash for
such Restricted Subsidiary (calculated on the same basis as Available Cash
hereunder) for the period in respect of which such distribution is being made.
SECTION 4.14. GUARANTIES. The Company will not and will not permit any
Restricted Subsidiary to become or be liable in respect of any Guaranty except
(i) Guaranties by the Company which are limited in amount to a stated maximum
dollar exposure, (ii) Guaranties of obligations incurred by any Restricted
Subsidiary in compliance with the provisions of this Agreement and (iii) bonds
posted by the Company or a Restricted Subsidiary in the ordinary course of
business in connection with timber harvest contracts, permits for road
construction or work in respect of environmental remediation.
SECTION 4.15. TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including without limitation, the
purchase from, sale to or exchange of Property with, or the rendering of any
service by or for, any Affiliate), except in the ordinary course of, and
pursuant to the reasonable requirements of, the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person other than an Affiliate; PROVIDED,
HOWEVER, the Company shall be entitled to reimburse the Managing General Partner
for Specified Expenses. The Managing General Partner shall determine the
Specified Expenses that are allocable to the Company in any reasonable manner
determined by the Managing General Partner.
SECTION 4.16. MULTIEMPLOYER PLAN LIABILITY AND TERMINATION OF PENSION
PLANS. The Company will not and will not permit any ERISA Affiliate to withdraw
from any Multiemployer Plan if such withdrawal would result in withdrawal
liability (as described in Part 1 of Subtitle E of Title IV of ERISA) that could
reasonably be expected to have a material adverse effect on the business,
profits or financial condition of the Company and its Restricted Subsidiaries,
taken as a whole. The Company will not and will not permit any ERISA Affiliate
to permit any employee benefit plan maintained by it to be terminated in a
manner which could result in the imposition of a Lien on any Property of the
Company or any Subsidiary pursuant to Section 4068 of ERISA.
SECTION 4.17. REPORTS AND RIGHTS OF INSPECTION. The Company will keep,
and will cause each Subsidiary to keep, proper books of record and account in
which full and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such Subsidiary, in
accordance with GAAP consistently applied (except for changes disclosed in the
financial statements furnished to the Holders pursuant to this SECTION 4.17 and
concurred in by the independent public accountants referred to in SECTION
4.17(b) hereof), and will furnish to each Holder of any Note (in duplicate if so
specified below or
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otherwise requested), and in the case of the financial statements delivered
pursuant to SECTION 4.17(b), to the Securities Valuation Office, National
Association of Insurance Commissioners, 000 Xxxxxxxx, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000:
(a) QUARTERLY STATEMENTS. As soon as available and in any event
within 60 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, duplicate copies of:
(1) consolidated balance sheets of the Company and its Restricted
Subsidiaries as of the close of such quarter setting forth in
comparative form the amount as of the close of the corresponding
period of the preceding fiscal year and the amount as of the close
of said preceding fiscal year, and
(2) consolidated statements of income and cash flows of the Company
and its Restricted Subsidiaries for such quarterly period and the
year to date period setting forth in comparative form the amount
for the corresponding periods of the preceding fiscal year,
all in reasonable detail and certified as complete and correct, by
an authorized financial officer of the Company;
(b) ANNUAL STATEMENTS. As soon as available and in any event
within 120 days after the close of each fiscal year of the Company,
duplicate copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and cash flows of the
Company and its Restricted Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated
figures for the preceding fiscal year, all in reasonable detail and
accompanied by an opinion thereon of a firm of independent public
accountants of recognized national standing selected by the Company
to the effect that the consolidated financial statements have been
prepared in accordance with GAAP consistently applied (except for
changes in application in which such accountants concur) and
present fairly the financial condition and results of operations of
the Company and its Restricted Subsidiaries and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards and accordingly, includes such tests of the
accounting records and such other auditing procedures as were
considered necessary in connection therewith;
(c) SEC AND OTHER REPORTS. Promptly upon their becoming available,
one copy of each financial statement, report, notice or proxy
statement sent by the Company to all holders of Equity Interests in
the Company generally and of each regular or periodic report, and
any registration statement or prospectus filed by the
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Company, any Subsidiary or the Partnership with any securities
exchange or the Securities and Exchange Commission or any successor
agency, and copies of any orders in any proceedings to which the
Company or any of its Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries, other than reports or licenses
granted by any such governmental agency with respect to the timber;
(d) REQUESTED INFORMATION. With reasonable promptness,
such other data and information as any Holder may reasonably
request including, without limitation, any information required to
be provided to such Holder or a prospective purchaser of the Notes
by Rule 144A(d)(4) under the Securities Act;
(e) OFFICER'S CERTIFICATES. Within the periods provided in
paragraphs (a) and (b) above, a certificate signed by the chief
financial officer of the Company stating that such officer has
reviewed the provisions of this Agreement and setting forth: (i)
the information and computations (in sufficient detail) required in
order to establish whether the Company was in compliance with the
requirements of SECTION 4.6 through SECTION 4.12, inclusive, and
SECTION 4.20 at the end of the period covered by the financial
statements then being furnished (including with respect to SECTION
4.10(a)(2) and SECTION 4.12, a certification as to the application
of any Net Proceeds during such period and the amount of Net
Proceeds remaining to be applied in accordance with each such
Section as of such date) and (ii) whether there existed as of the
date of such financial statements and whether, to the best of his
knowledge, there exists on the date of the certificate or existed
at any time during the period covered by such financial statements
any Default or Event of Default and, if any such condition or event
exists on the date of the certificate, specifying the nature and
period of existence thereof and the action the Company is taking
and proposes to take with respect thereto;
(f) ACCOUNTANT'S CERTIFICATES. Within the period provided
in paragraph (b) above, a letter, addressed to the Holders, of the
accountants who render an opinion with respect to such financial
statements, stating that they have reviewed this Agreement and
stating further that nothing came to their attention that caused
them to believe that the Company was not in compliance with any of
the provisions of SECTION 4.6 through SECTION 4.12, both inclusive,
or SECTION 4.20 insofar as said provisions relate to accounting
matters, and if any non-compliance has come to their attention
specifying the nature and period of existence thereof, PROVIDED
that such accountants may state that their audit was not directed
primarily toward obtaining knowledge of any noncompliance by the
Company with any of the terms or provisions of this Agreement;
(g) ERISA REPORTING. Prompt written notice, and in any
event within five Business Days upon learning of its occurrence, of
the following and the action the Company has taken, is taking or
proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, Department of
Labor or the Pension Benefit Guaranty Corporation ("PBGC") with
respect thereto: (i) a Reportable Event with respect to any
employee benefit plan; (ii) the institution
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of any steps by the Company, any ERISA Affiliate, the PBGC or any other
Person to terminate any employee benefit plan pursuant to Sections
4041(c) or 4042 of ERISA; (iii) the institution of any steps by the
Company or any ERISA Affiliate to withdraw from any Multiemployer Plan,
within the meaning of ERISA which would result in a material adverse
effect on the business, profits or financial condition of the Company
and its Restricted Subsidiaries taken as a whole; (iv) a "prohibited
transaction" within the meaning of Section 406 of ERISA in connection
with any employee benefit plan which would result in a material adverse
effect on the business, profits or financial condition of the Company
and its Restricted Subsidiaries, taken as a whole; or (v) any increase in
the liability of the Company or any Subsidiary with respect to any
post-retirement welfare benefits which would result in a material
adverse effect on the business, profits or financial condition of the
Company and its Restricted Subsidiaries, taken as a whole; and
(h) NOTICE OF LITIGATION. Prompt written notice, and in any
event within five Business Days after the Company first obtains
knowledge thereof, with respect to the institution of any suit or
proceeding against the Company or any Restricted Subsidiary which if
determined adversely could, individually or in the aggregate with other
suits and proceedings, reasonably be expected to have a material adverse
effect on the business, profits, Properties or financial condition of
the Company or any Restricted Subsidiary.
Without limiting the foregoing, the Company will permit each Holder (or such
Persons as such Holder may designate) to visit and inspect any of the Properties
of the Managing General Partner, the Company or any Subsidiary, to examine all
their books of account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective officers, employees, and independent public
accountants (and by this provision the Company authorizes said accountants to
discuss with such Holder or Person so designated the finances and affairs of the
Company and its Subsidiaries with or without an officer or employee of the
Company or any of its Subsidiaries being present) all at such reasonable times
and as often as may be reasonably requested; PROVIDED that unless a Default or
Event of Default shall have occurred and shall be continuing, such Holders shall
give the Company at least 10 days' prior written notice of any such visit. The
Company shall not be required to pay or reimburse any Holder for expenses which
it may incur in connection with any such visitation or inspection except in the
case of any such visitation or inspection which shall occur while a Default or
Event of Default shall have occurred and shall be continuing.
SECTION 4.18. CHANGES IN STATUS OF SUBSIDIARIES. So long as no Default or
Event of Default shall have occurred and be continuing, the Board of Control
may at any time and from time to time, upon not less than 30 days' prior written
notice given to each Holder, designate a previously Unrestricted Subsidiary as a
Restricted Subsidiary, PROVIDED that immediately after such designation and
after giving effect thereto (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the Company could incur at least $1.00 of
additional Funded Debt under the provisions of SECTION 4.6(a)(4).
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Any notice of designation pursuant to this SECTION 4.18 shall be
accompanied by certificate signed by the chief financial officer of the
Company stating that the provisions of this SECTION 4.18 have been complied
with in connection with such designation and setting forth the name of each
other Subsidiary (if any) which has or will become a Restricted Subsidiary,
as the case may be, as a result of such designation.
SECTION 4.19. REPURCHASE OF NOTES. Neither the Company nor any Restricted
Subsidiary, directly or indirectly or through any Affiliate, may repurchase or
make any offer to repurchase any Notes unless an offer has been made to
repurchase Notes, PRO RATA, from all Holders at the same time and upon the same
terms (without regard to the different maturities but taking into account the
interest rates applicable to each series of Notes). In case the Company
repurchases or otherwise acquires any Notes, such Notes shall immediately
thereafter be cancelled and no Notes shall be issued in substitution therefor.
Without limiting the foregoing, upon the repurchase or other acquisition of any
Notes by the Company, any Restricted Subsidiary or any Affiliate, such Notes
shall no longer be outstanding for purposes of any section of this Agreement
relating to the taking by the Holders of any actions with respect hereto,
including, without limitation, SECTIONS 6.3, 6.4 and 7.1.
SECTION 4.20. LIENS. The Company will not, and will not permit any
Restricted Subsidiary to, create or incur, or suffer to be incurred or to exist,
any Lien on its or their Property, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or transfer any Property for the purpose
of subjecting the same to the payment of obligations in priority to the payment
of its or their general creditors, or acquire or agree to acquire, or permit any
Restricted Subsidiary to acquire, any Property upon conditional sales agreements
or other title retention devices, except:
(a) Liens for property taxes and assessments or governmental
charges or levies and Xxxxx securing claims or demands of carriers,
loggers, mechanics and materialmen incurred in the ordinary course of
business, PROVIDED that payment thereof is not at the time required by
SECTION 4.3(a);
(b) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted Subsidiary
shall at any time in good faith be prosecuting an appeal or proceeding
for a review, and in respect of which a stay of execution pending such
appeal or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the ownership
of Properties (including Liens in connection with worker's compensation,
unemployment insurance and other like laws, warehousemen's and
attorneys' liens and statutory landlords' liens) and Liens to secure the
performance of bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Liens of like general
nature incurred in the ordinary course of business and not in connection
with the borrowing of money; PROVIDED in each case, the obligation
secured is not overdue or, if overdue, is being contested in good faith
by appropriate actions or proceedings
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which will prevent the forfeiture or sale of any Property of the Company
or such Restricted Subsidiary or any material interference with the use
thereof by the Company or such Restricted Subsidiary;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, rights of others for rights-of-way, utilities and other
similar purposes, zoning or other restrictions as to the use of real
properties, and leases and subleases thereof, in each case, which (i)
are necessary or appropriate for the conduct of the activities of the
Company and its Restricted Subsidiaries or customarily exist on
Properties of business entities engaged in similar activities and
similarly situated and (ii) do not in any event materially impair the
use of such real property in the operation of the business of the
Company and its Restricted Subsidiaries;
(e) Liens securing Indebtedness of a Restricted Subsidiary to
the Company or to a Wholly-owned Restricted Subsidiary;
(f) Liens on inventory and receivables securing Indebtedness
incurred pursuant to the Working Capital Facility, PROVIDED that the
aggregate outstanding principal amount so secured shall not exceed
$40,000,000 at any time;
(g) Liens incurred in connection with the acquisition of any
fixed asset useful and intended to be used in carrying on the business
of the Company or a Restricted Subsidiary, including Liens existing on
such fixed asset at the time of acquisition by the Company or a
Restricted Subsidiary of any business entity then owning such fixed
asset, whether or not such existing Liens were given to secure the
payment of the purchase price of the fixed asset to which they attach so
long as they were not incurred, extended or renewed in contemplation of
such acquisition, PROVIDED in any case that (i) the Lien shall attach
solely to the fixed asset acquired or purchased, (ii) at the time of
acquisition of such fixed asset, the amount remaining unpaid on all
Indebtedness secured by Liens on such fixed asset whether or not assumed
by the Company or a Restricted Subsidiary shall not exceed an amount
equal to 85% (or 100% in the case of Capitalized Leases) of the total
purchase price of such fixed asset, and the aggregate amount remaining
unpaid on all Indebtedness secured by Liens on fixed assets acquired or
purchased subsequent to the Closing Date (including such fixed asset)
shall not exceed the following amounts:
On or before November 30, 1999 $25,000,000
December 1, 1999 to November 30, 2004 $50,000,000
December 1, 2004 and thereafter $100,000,000,
(iii) all such Indebtedness shall have been incurred within the
applicable limitations provided in SECTION 4.6, and (iv) after
giving effect to such acquisition no Default or Event of Default
shall have occurred and be continuing; and
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(h) Liens existing on the Closing Date and described in Part II of
Annex C to Exhibit B-1.
In the event that any Property of the Company or its Restricted
Subsidiaries is subjected to a Lien in violation of this SECTION 4.20 (an
"EXCESS LIEN"), (1) the Company or such Restricted Subsidiary shall make or
cause to be made provision whereby the obligations of the Company under the
Notes and this Agreement will be secured equally and ratably with all other
obligations secured by such Excess Lien pursuant to security arrangements
reasonably satisfactory in form, scope and substance to the Holders holding
not less than 66-2/3% in aggregate principal amount of the outstanding Notes
and (2) the Company or such Restricted Subsidiary shall deliver an opinion of
counsel satisfactory to the Holders holding not less than 66-2/3% in
aggregate principal amount of the outstanding Notes regarding the validity of
such security interest and to the effect that the Notes are secured equally
and ratably with such other obligations; PROVIDED, HOWEVER, that satisfaction
of the conditions set forth in clauses (1) and (2) above does not remedy the
Event of Default resulting from such Excess Lien. In the case of any Excess
Lien, said obligations of the Company under the Notes and this Agreement
shall have the benefit, to the full extent that the Holders may be entitled
thereto under applicable law, of an equitable lien on such Property subject
to the Excess Lien.
SECTION 4.21. RATINGS. Upon receipt of a request from any Holder, the
Company will, and will cause its Subsidiaries to, provide such information as
shall be reasonably requested for the purpose of maintaining any rating
applicable to the Notes, whether by a governmental authority or private
association and, if requested, the Company shall make a presentation relevant
to the maintenance of any such rating to such authority or association,
PROVIDED that the Company shall not be obligated to maintain any specific
rating with respect to the Notes with any such authority or association.
SECTION 5. PREPAYMENT OF NOTES.
SECTION 5.1. REQUIRED PREPAYMENTS. The Company agrees that it will
prepay and apply and there shall become due and payable on the principal
indebtedness evidenced by the Series A Notes on each of the following dates
an amount equal to the lesser of (i) the amount set forth opposite such date
or (ii) the principal amount of the Series A Notes then outstanding:
August 1, 2003 $ 770,000
August 1, 2004 $1,320,000
August 1, 2005 $2,200,000
The entire remaining principal amount of the Series A Notes shall become due
and payable on August 1, 2006.
The Company agrees that it will prepay and apply and there shall become
due and payable on the principal indebtedness evidenced by the Series B Notes
on each of the
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following dates an amount equal to the lesser of (i) the amount set forth
opposite such date or (ii) the principal amount of the Series B Notes then
outstanding:
August 1, 2003 $ 1,750,000
August 1, 2004 $ 3,000,000
August 1, 2005 $ 5,000,000
August 1, 2006 $ 5,000,000
August 1, 2007 $ 5,000,000
August 1, 2008 $ 5,000,000
August 1, 2009 $ 5,000,000
August 1, 2010 $10,125,000
The entire remaining principal amount of the Series B Notes shall become due
and payable on August 1, 2011.
The Company agrees that it will prepay and apply and there shall become
due and payable on the principal indebtedness evidenced by the Series C Notes
on each of the following dates an amount equal to the lesser of (i) the
amount set forth opposite such date or (ii) the principal amount of the
Series C Notes then outstanding:
August 1, 2007 $2,767,375.89
August 1, 2008 $2,767,375.89
August 1, 2009 $2,767,375.89
August 1, 2010 $5,603,936.17
The entire remaining principal amount of the Series C Notes shall become due and
payable on August 1, 2011.
The Company agrees that it will prepay and apply and there shall become
due and payable on the principal indebtedness evidenced by the Series D Notes
on each of the following dates an amount equal to the lesser of (i) the
amount set forth opposite such date or (ii) the principal amount of the
Series D Notes then outstanding:
August 1, 2009 $3,000,000
August 1, 2010 $3,000,000
August 1, 2011 $3,000,000
August 1, 2012 $3,000,000
The entire remaining principal amount of the Series D Notes shall become due
and payable on August 1, 2013.
No premium shall be payable in connection with a required prepayment made
pursuant to this SECTION 5.1. For purposes of this SECTION 5.1, any
prepayment of less than all of the outstanding Notes of a series pursuant to
SECTION 5.2 shall reduce the principal amount of the Notes of such series
required to be prepaid on August 1 in each subsequent year to and including
the stated maturity of the Notes of such series in the same proportion as the
aggregate
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principal amount of the Notes of such series outstanding immediately prior to
such prepayment has been reduced by such prepayment.
SECTION 5.2. OPTIONAL PREPAYMENT WITH PREMIUM. In addition to the
payments required by SECTION 5.1, upon compliance with SECTION 5.3 the
Company shall have the privilege, at any time and from time to time, of
prepaying the outstanding Notes of all series, either in whole or in part
(but if in part then in an aggregate minimum principal amount of $1,000,000
or such lesser amount as permitted in connection with a sale of assets under
SECTION 4.10 or an Excess Harvest under SECTION 4.12) by payment of the
outstanding principal amount of the Notes or portion thereof to be prepaid,
and accrued interest thereon to the date of such prepayment, together with a
premium equal to the Make-Whole Amount, determined as of three Business Days
prior to the date of such prepayment pursuant to this SECTION 5.2.
SECTION 5.3. NOTICE OF OPTIONAL PREPAYMENTS. The Company will give
notice of any prepayment of the Notes pursuant to SECTION 5.2 to each Holder
thereof not less than 10 days nor more than 30 days before the date fixed for
such optional prepayment specifying (i) such date (which shall be a Business
Day), (ii) the outstanding principal amount of the Holder's Notes to be
prepaid on such date, (iii) that a premium may be payable, (iv) the date when
such premium will be calculated, (v) the estimated premium, and (vi) the
accrued interest applicable to the prepayment. Such notice of prepayment
shall also certify all facts, if any, which are conditions precedent to any
such prepayment. Notice of prepayment having been so given, the aggregate
principal amount of the Notes to be prepaid specified in such notice,
together with accrued interest thereon and the premium, if any, payable with
respect thereto shall become due and payable on the prepayment date specified
in said notice. Not later than two Business Days prior to the prepayment
date specified in such notice, the Company shall provide written notice by
facsimile communication followed by delivery on the next succeeding Business
Day by overnight air courier to each Holder of Notes to be prepaid of the
amount of premium, if any, payable in connection with such prepayment and,
whether or not any premium is payable, a reasonably detailed computation of
the Make-Whole Amount. In the event the Company shall incorrectly compute
the Make-Whole Amount payable in connection with any Note to be prepaid
pursuant to SECTION 5.2, or declared to be immediately due and payable
pursuant to SECTION 6.3, the Holder shall not be bound by such incorrect
computation, but instead shall be entitled to receive an amount equal to the
correct Make-Whole Amount, if any, computed in compliance with the terms of
this Agreement.
SECTION 5.4. APPLICATION OF PREPAYMENTS. All partial prepayments of the
Notes of a series pursuant to SECTION 5.1 shall be applied on all outstanding
Notes of such series ratably in accordance with the unpaid principal amounts
thereof. All partial prepayments of the Notes pursuant to SECTION 5.2 shall
be applied on all outstanding Notes ratably in accordance with the unpaid
principal amounts thereof.
SECTION 5.5. DIRECT PAYMENT. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned by a
Purchaser or any Purchaser's nominee or owned by any subsequent Holder which
has given written notice to the Company requesting that the provisions of
this SECTION 5.5 shall apply, the Company will punctually pay when due the
principal thereof, interest thereon and premium, if any, due
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with respect to said principal, without any presentment thereof, directly to
such Purchaser, to its nominee or to such subsequent Holder at its address or
such nominee's address set forth herein or such other address as such
Purchaser, its nominee or such subsequent Holder may from time to time
designate in writing to the Company or, if a bank account with a United
States bank is so designated for such Holder, the Company will make such
payments in immediately available funds to such bank account no later than
10:00 A.M. Portland, Oregon time on the date due, marked for attention as
indicated, or in such other manner or to such other account in any United
States bank as such Purchaser, its nominee or any such subsequent Holder may
from time to time direct in writing. Such payments will be made without
notations being made on such Note, except that (a) any such Note so paid or
prepaid in full (including the payment of all interest accrued to the date of
such payment or prepayment and premium, if any) shall be surrendered to the
Company within a reasonable time after such payment or prepayment in full,
and (b) before any sale or other transfer by any Holder of any Note in
respect of which any principal payments have been made in the manner provided
in this Agreement, such Holder will make appropriate notation of such
payments on such Note.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
SECTION 6.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for
more than five Business Days or
(b) Default shall occur in the making of any required prepayment
on any of the Notes as provided in SECTION 5.1 or
(c) Default shall occur in the making of any other payment of
the principal of any Note or premium, if any, thereon at the expressed
or any accelerated maturity date or at any date fixed for prepayment or
(d) Default continuing beyond the period of grace, if any,
allowed with respect thereto shall be made in the payment when due
(whether by lapse of time, by declaration, by call for redemption or
otherwise) of the principal of or interest on any Funded Debt (other
than the Notes) or Current Debt of the Company or any Restricted
Subsidiary, and, individually or in the aggregate, the principal amount
of such Funded Debt and Current Debt shall be in excess of $5,000,000 or
(e) Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which any Funded Debt or
Current Debt of the Company or any Restricted Subsidiary may be or has
been issued and, individually or in the aggregate, the aggregate
principal amount of such Funded Debt and Current Debt which has been
issued or may be issued thereunder shall be in excess of
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$5,000,000, and such default or event shall continue for a period of
time sufficient to permit the acceleration of the maturity of such
Funded Debt or Current Debt or
(f) Default shall occur in the observance or performance of any
covenant or agreement contained in SECTION 4.6 through SECTION 4.12,
both inclusive or
(g) Default shall occur in the observance or performance of the
covenant contained in SECTION 4.20 which is not remedied within ten days
after the earlier of (i) the day on which the Company first obtains
knowledge of such default, or (ii) the day on which written notice
thereof is given to the Company by any Holder or
(h) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 30 days
after the earlier of (i) the day on which the Company first obtains
knowledge of such default, or (ii) the day on which written notice
thereof is given to the Company by any Holder or
(i) Any representation or warranty made by the Company or the
Managing General Partner herein, or by the Company or the Managing
General Partner in any statement or certificate furnished by the Company
or the Managing General Partner in connection with the consummation of
the issuance and delivery of the Notes or furnished by the Company or
the Managing General Partner pursuant hereto, is untrue in any material
respect as of the date of the issuance or making thereof or
(j) Final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any Property of either
and such judgment or judgments have remained unpaid, unvacated, unbonded
or unstayed by appeal or otherwise for a period of 60 consecutive days
from the date of its entry or
(k) The Company, or any Person on behalf of the Company, shall
contest or deny the validity or enforceability of this Agreement or the
Notes or its obligations hereunder and thereunder or
(l) An order or decree requiring a split-up or divestiture of
the Company is outstanding against the Company and such order or decree
remains unstayed and in effect for more than 30 consecutive days or
(m) A custodian, liquidator, trustee, receiver or similar
official is appointed for the Company or any Restricted Subsidiary or
for the major part of the Property of either and is not discharged
within 60 days after such appointment or
(n) The Company, any Restricted Subsidiary or the Managing
General Partner becomes insolvent or bankrupt, is generally not paying
its debts as they become due or makes an assignment for the benefit of
creditors, or the Company or any Restricted Subsidiary or the Managing
General Partner applies for or consents to the appointment of a
custodian, liquidator, trustee, receiver or similar official for the
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Company, such Restricted Subsidiary or the Managing General Partner or
for the major part of the Property of any of them or
(o) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company, any Restricted Subsidiary or the Managing General
Partner and, if instituted against the Company, any Restricted
Subsidiary or the Managing General Partner, are consented to or are not
dismissed within 60 days after such institution.
SECTION 6.2. NOTICE TO HOLDERS. When any Default or Event of Default
described in the foregoing SECTION 6.1 has occurred, or if the holder of any
Note or of any other evidence of Indebtedness of the Company or any
Restricted Subsidiary gives any notice or takes any other action with respect
to a claimed default, the Company agrees to give notice within three Business
Days of such event to all Holders.
SECTION 6.3. ACCELERATION OF MATURITIES. When any Event of Default
described in paragraph (a), (b) or (c) of SECTION 6.1 has happened and is
continuing, any Holder may, by notice to the Company, declare the entire
principal, premium, if any, and all interest accrued on the Note or Notes
held by such Holder to be, and such Note or Notes shall thereupon become
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event
of Default described in paragraphs (a) through (l), inclusive, of SECTION 6.1
has happened and is continuing, the Holders holding not less than 50% of the
principal amount of the outstanding Notes may, by notice to the Company,
declare the entire principal, premium, if any, and all interest accrued on
all Notes to be, and all Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived. When any Event of Default
described in paragraph (m), (n) or (o) of SECTION 6.1 has occurred, then all
outstanding Notes shall immediately become due and payable without
presentment, demand or notice of any kind, all of which are hereby expressly
waived. Upon any Notes becoming due and payable as a result of any Event of
Default as aforesaid, the Company will forthwith pay to the Holders of such
Notes the entire principal and interest accrued on the Notes so accelerated
and, in the case of an Event of Default specified in paragraphs (a) through
(l), inclusive of SECTION 6.1, to the extent not prohibited by applicable
law, the Company will pay an amount as liquidated damages for the loss of the
bargain evidenced hereby (and not as a penalty) equal to the Make-Whole
Amount, determined as of the date on which such Notes shall so become due and
payable. No course of dealing on the part of the Holders nor any delay or
failure on the part of any Holder to exercise any right shall operate as a
waiver of such right or otherwise prejudice such Holder's rights, powers and
remedies. The Company further agrees, to the extent permitted by law, to pay
to the Holders all costs and expenses incurred by them in the collection of
any Notes upon any default hereunder or thereon, including reasonable
compensation to such Holders' attorneys and financial advisors for all
services rendered in connection therewith.
SECTION 6.4. RESCISSION OF ACCELERATION. The provisions of SECTION 6.3
are subject to the condition that if the principal of, premium, if any, and
accrued interest on all or any
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outstanding Notes have been declared immediately due and payable by reason of
the occurrence of any Event of Default described in paragraphs (a) through
(l), inclusive, of SECTION 6.1, the Holders holding 66-2/3% in aggregate
principal amount of the Notes then outstanding may, by written instrument
filed with the Company, rescind and annul such declaration and the
consequences thereof, PROVIDED that at the time such declaration is annulled
and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under SECTION 6.3)
shall have been duly paid and
(c) each and every other Default and Event of Default shall have
been made good, cured or waived pursuant to SECTION 7.1
and PROVIDED FURTHER, that no such rescission and annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
SECTION 7.1. CONSENT REQUIRED. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended
or compliance therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively) if the Company shall have
obtained the consent in writing of the Holders holding at least 55% in
aggregate principal amount of outstanding Notes, PROVIDED that without the
written consent of the Holders holding all of the Notes then outstanding, no
such amendment or waiver shall be effective (i) which will change the time of
payment (including any prepayment required by SECTION 5.1) of the principal
of or the interest on any Note or change the principal amount thereof or
change the rate of interest thereon, (ii) which will change any of the
provisions with respect to optional prepayments, (iii) which will change the
percentage of Holders required to consent to any such amendment or waiver of
any of the provisions of SECTION 6 or this SECTION 7 or (iv) which will
change any provision of SECTION 4.19 or SECTION 7.2.
SECTION 7.2. SOLICITATION OF HOLDERS. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes unless each Holder (irrespective of the amount of
Notes then owned by it) shall be informed thereof by the Company and shall be
afforded the opportunity of considering the same and shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto. The Company will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any Holder as consideration for or
as an inducement to entering into by any Holder of any
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waiver or amendment of any of the terms and provisions of this Agreement or
the Notes unless such remuneration is concurrently paid, on the same terms,
ratably to the Holders.
SECTION 7.3. EFFECT OF AMENDMENT OR WAIVER. Any such amendment or
waiver shall apply equally to all of the Holders and shall be binding upon
them, upon each future Holder and upon the Company, whether or not such Note
shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT DEFINITIONS.
SECTION 8.1. DEFINITIONS. Unless the context shall otherwise require,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both
the singular and plural forms of any of the terms herein defined:
"ACQUISITION" means any transaction in which the Company or any
Restricted Subsidiary acquires (through an asset acquisition, merger, stock
acquisition or other form of investment) control over all or a portion of the
Properties or business of another Person for the purpose of increasing the
operating capacity of the Company and its Restricted Subsidiaries, taken as a
whole, from the operating capacity of the Company and its Restricted
Subsidiaries, taken as a whole, existing immediately prior to such
transaction.
"ACQUISITION CREDIT AGREEMENT" and "ACQUISITION FACILITY" are defined in
SECTION 3.9.
"AFFILIATE" shall mean any Person (other than a Wholly-owned Restricted
Subsidiary) (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control
with, the Company, (ii) which beneficially owns or holds 5% or more of the
Voting Equity Interest of the Company or (iii) 5% or more of the Voting
Equity Interest of which is beneficially owned or held by the Company or a
Subsidiary. The term "CONTROL" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of Voting Equity Interest, by
contract or otherwise.
"APPLICATION PERIOD" shall mean, with respect to any sale of assets
pursuant to SECTION 4.10(a)(2), the 180-day period following the date of such
sale and, with respect to any sale of harvested timber subject to SECTION
4.12, the 180-day period following the last day of the fiscal year of the
Company in which such Excess Harvest occurred.
"AVAILABLE CASH" shall mean, with respect to any fiscal quarter of the
Company and without duplication,
(a) the sum of:
(i) all cash receipts of the Company during such
quarter from all sources,
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(ii) any reduction with respect to such quarter in a
cash reserve previously established pursuant to clause (b)(ii)
below (either by reversal or utilization) from the level of such
reserve at the end of the prior quarter, and
(iii) any utilization with respect to such quarter of
the Working Capital Reserve; LESS
(b) the sum of:
(i) all cash disbursements of the Company during
such quarter and
(ii) any cash reserves established with respect to
such quarter, and any increase with respect to such quarter in a
cash reserve established pursuant to this clause (b)(ii) from the
level of such reserve at the end of the prior quarter, in such
amounts as the Managing General Partner determines in its
reasonable discretion to be necessary or appropriate (A) to provide
for the proper conduct of the business of the Company, (B) to
comply with the provisions of the Partnership Agreement, (C) to
provide funds for distributions to Partners in respect of any one
or more of the next four quarters or (D) because the distribution
of such amounts would be prohibited by applicable law or by any
loan agreement, security agreement, mortgage, debt instrument or
other agreement or obligation to which the Company is a party or by
which any of its assets are subject, PROVIDED that Available Cash
shall reflect (x) in each fiscal quarter a reserve equal to at
least 50% of the aggregate amount of all interest to be paid in
respect of the Notes, the 1994 Notes and the 1995 Notes on the next
interest payment date, and (y) in the third fiscal quarter
immediately preceding each fiscal quarter in which any scheduled
principal payment is due with respect to the Notes, the 1994 Notes
and/or the 1995 Notes (a "PRINCIPAL PAYMENT QUARTER"), a reserve
equal to at least 25% of the aggregate amount of all principal to
be paid in respect of such Notes, 1994 Notes and 1995 Notes in such
principal payment quarter in the second calendar quarter
immediately preceding a principal payment quarter, a reserve equal
to at least 50% of the aggregate amount of all principal to be paid
in respect of such Notes, 1994 Notes and 1995 Notes in such
principal payment quarter and in the calendar quarter immediately
preceding a principal payment quarter, a reserve equal to at least
75% of the aggregate amount of all principal to be paid in respect
of such Notes, 1994 Notes and 1995 Notes in such principal payment
quarter.
So long as the Company is not a taxpaying entity, taxes paid by the
Company on behalf of, or amounts withheld with respect to, all or less than
all of the Partners shall not be considered cash disbursements of the Company
that reduce Available Cash, but the payment or withholding thereof shall be
deemed to be a distribution of Available Cash to such Partners.
Alternatively, in the discretion of the Managing General Partner, so long as
the Company is not a taxpaying entity, such taxes (if pertaining to all
Partners) may be considered to be cash disbursements of the Company which
reduce Available Cash, but the
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payment or withholding thereof shall not be deemed to be a distribution of
Available Cash to such Partners.
"BOARD OF CONTROL" shall mean the Board of Control of the Managing
General Partner.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day
on which banks in the States of New York, California or Oregon are authorized
or permitted to be closed in the observance of a legal holiday.
"CAPITAL ADDITIONS AND IMPROVEMENTS" means (i) additions or improvements
to the capital assets owned by the Company or any Restricted Subsidiary or
(ii) the acquisition of existing or the construction of new capital assets
(including, without limitation, timberlands and timber processing and
manufacturing facilities and related assets) made to increase the operating
capacity of the Company and its Restricted Subsidiaries, taken as a whole,
from the operating capacity of the Company and its Restricted Subsidiaries,
taken as a whole, existing immediately prior to such addition, improvement,
acquisition or construction.
"CAPITALIZED LEASE" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"CAPITALIZED RENTALS" of any Person shall mean as of the date of any
determination the amount at which the aggregate Rentals due and to become due
under all Capitalized Leases under which such Person is a lessee would be
reflected as a liability on a consolidated balance sheet of such Person in
accordance with GAAP.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. SECTIONS 9601 ET SEQ.,
and any future amendments.
"CLOSING DATE" is defined in SECTION 1.2.
"COMPANY" is defined in the introductory paragraph of this Agreement.
"CONSOLIDATED CASH FLOW" for any period shall mean Operations Cash for
such period adjusted to include (a) in the case of any acquisition of timber
or timberland by the Company or a Restricted Subsidiary during such period,
an amount equal to the projected cash flow of the timber or timberland so
acquired, based on the harvest plan for the first harvest year, PROVIDED that
such harvest plan shall not include more than 15% of the total volume of
merchantable timber so acquired, and PROVIDED, FURTHER, that in determining
projected cash flow from acquired timber or timberlands, prices shall be
assumed to equal the average price realized by the Company for comparable
timber sold during such period, and (b) in the case of any acquisition of any
other productive asset by the Company or a Restricted Subsidiary during such
period, an amount equal to 80% of the average annual cash flow of the
productive asset so acquired for the preceding two years, which amount will
be increased if and to the extent a Responsible Officer of the Company shall
certify in writing to the Holders (x) specified cost savings that can be
effected by the Company in the operation of
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such productive asset or (y) the net additional resources to be allocated to
increase productivity of such asset, PLUS (to the extent deducted in
determining Operations Cash) (i) all cash debt service payments of the
Company and its Restricted Subsidiaries during such period, (ii) all cash
capital expenditures (except capital expenditures relating to Acquisitions
and Capital Additions and Improvements) of the Company and its Restricted
Subsidiaries during such period, and (iii) the amount deducted from
Operations Cash as a result of the increase in any reserve for the future
cash payment of items of the type referred to in the foregoing clauses (i) or
(ii).
"CONSOLIDATED NET WORTH" of any Person shall mean, as of the date of any
determination, the amount by which the total assets of such Person and its
subsidiaries appearing on a balance sheet of such Person and its subsidiaries
prepared in accordance with GAAP on a consolidated basis exceeds the total
liabilities of such Person and its subsidiaries appearing on a balance sheet
of such Person and its subsidiaries prepared in accordance with GAAP on a
consolidated basis, in each case after eliminating all intercompany
transactions.
"CONSUMER PRICE INDEX" shall mean the consumer price index for goods and
services for the United States, as published by the U. S. Bureau of Labor
Statistics, or if such index is no longer printed, its successor publications.
"CONTROLLING GENERAL PARTNERSHIP INTEREST" shall mean a General
Partnership Interest which permits the owner of such General Partnership
Interest to direct the management of a general partnership or a limited
partnership.
"CP INLAND" shall mean Crown Pacific Inland Limited Partnership, an
Oregon limited partnership, previously merged into the Company.
"CP INLAND LUMBER" is defined in Exhibit C.
"CPLP" shall mean Crown Pacific Limited Partnership, an Oregon limited
partnership, previously merged into the Company.
"CREDIT AGREEMENTS" means the Acquisition Credit Agreement and the
Working Capital Credit Agreement.
"CURRENT DEBT" of any Person shall mean, as of the date of any
determination thereof, (i) all Indebtedness of such Person for borrowed money
or for the acquisition of assets, other than Funded Debt of such Person and
(ii) Guaranties by such Person of Current Debt of others.
"DAW" is defined in Exhibit B.
"DEFAULT" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"DISTRIBUTION" in respect of the Company shall mean:
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(a) dividends, distributions or other payments of any kind
whatsoever on or in respect of the Partnership Interests (except
distributions payable solely in Partnership Interests or in rights or
options to acquire Partnership Interests)
(b) the redemption or acquisition of Partnership Interests or
of rights or other options to purchase Partnership Interests and
(c) any payment of or on account of Subordinated Funded Debt
owed to the Managing General Partner or any payment on account of the
purchase, redemption or other retirement thereof.
"ENVIRONMENTAL AND NATURAL RESOURCE CLAIM" shall mean any administrative,
regulatory or judicial action, judgment, order, consent decree, suit, demand,
demand letter, claim, Lien, notice of non-compliance or violation,
investigation or other proceeding arising (a) pursuant to any Environmental
and Natural Resource Law or Governmental Approval issued under any such
Environmental and Natural Resource Law, (b) from the presence, use,
generation, storage, treatment, Release, threatened Release, disposal,
remediation or other existence of any Hazardous Material, (c) from any
removal, remedial, corrective or other response action pursuant to an
Environmental and Natural Resource Law or the order of a Governmental
Authority, (d) from any third party seeking damages, contribution,
indemnification, cost recovery, compensation, injunctive or other relief in
connection with a Hazardous Material or arising from alleged injury or threat
of injury to health, safety, natural resources or the environment, or (e)
from any Lien against the Properties of the Company or any Subsidiary in
favor of a Governmental Authority in connection with a Release, threatened
Release or disposal of a Hazardous Material.
"ENVIRONMENTAL AND NATURAL RESOURCE LAW" shall mean any statute, law,
regulation, ordinance, order, consent decree, judgment, permit, license,
code, common law, treaty, convention or other requirement of a Governmental
Authority, pertaining to protection of the environment, health or safety of
persons, natural resources, forestry, conservation, wildlife, waste
management, hazardous substances or wastes, and pollution (including, without
limitation, regulation of releases and disposals to air, land, water and
groundwater), now or hereafter enacted, and includes, without limitation, the
Idaho Reforestation Law, Idaho Code SECTIONS 38-201, ET SEQ., Idaho Forest
Practices Act, Idaho Code SECTIONS 38-1301 ET SEQ., Idaho Hazardous
Substances Emergency Response Act, Idaho Code SECTIONS 39-7101 ET SEQ.,
Montana Timber Resources Code, Mont. Code Xxx. SECTIONS 00-00-000 ET SEQ.,
Montana Environmental Protection Code, Mont. Code Xxx. SECTIONS 75-1-101 ET
SEQ., Oregon Forest Practices Act, Or. Rev. Stat. SECTIONS 527.610 ET SEQ.,
Oregon Hazardous Waste and Hazardous Materials Code, Or. Rev. Stat. SECTIONS
465.003 ET SEQ., Washington Forest Practice Code, Wash. Rev. Code SECTIONS
76.09.010 ET SEQ., Washington Model Toxic Control Act, Wash. Rev. Code
SECTIONS 70.105D.010 ET SEQ., Endangered Species Act of 1973, 16 U.S.C.
SECTIONS 1531 ET SEQ., Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. SECTIONS 9601 ET SEQ., Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. SECTIONS
6901 ET SEQ., Federal Water Pollution Control Act, as amended by the Clean
Water Act of 1977, 33
-37-
U.S.C. SECTIONS 1251 ET SEQ., Clean Air Act of 1966, as amended, 42 U.S.C.
SECTIONS 7401 ET SEQ., Toxic Substances Control Act of 1976, 15 U.S.C.
SECTIONS 2601 ET SEQ., Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C SECTIONS 651 ET SEQ., Oil Pollution Act of 1990, 33 U.S.C
SECTIONS 2701 ET SEQ., Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. SECTIONS 11001 ET SEQ., National Environmental Policy Act of
1975, 42 U.S.C. SECTIONS 4321 ET SEQ., Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. SECTIONS 300(f) ET SEQ., and all similar or implementing
laws, rules, regulations, approvals, guidance documents and amendments
promulgated thereunder.
"EQUITY INTEREST" shall mean, in the case of a corporation, stock of any
class, and in the case of a partnership or a limited partnership, a General
Partnership Interest or Limited Partnership Interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA AFFILIATE" shall mean any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Internal Revenue Code of 1986, as amended, or
Section 4001 of ERISA.
"EVENT OF DEFAULT" is defined in SECTION 6.1.
"EXCESS HARVEST" is defined in SECTION 4.12.
"EXCESS LIEN" is defined in SECTION 4.20.
"FOUR QUARTER PERIOD" shall mean a period of four full consecutive
quarterly fiscal periods of the Company, taken together as one accounting
period.
"FUNDED DEBT" of any Person shall mean (i) all Indebtedness of such
Person for borrowed money or which has been incurred in connection with the
acquisition of assets in each case having a final maturity of one or more
than one year from the date of origin thereof (or which is renewable or
extendible at the option of the obligor for a period or periods more than one
year from the date of origin), including all payments in respect thereof that
are required to be made within one year from the date of any determination of
Funded Debt, (ii) all Capitalized Rentals of such Person, and (iii) all
Guaranties by such Person of Funded Debt of others.
"FUNDING AGENT" is defined in SECTION 1.6.
"GAAP" shall mean generally accepted accounting principles at the time in
the United States.
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"GENERAL PARTNERSHIP INTEREST" shall mean the interest of a general
partner in a general partnership and the interest of a general partner in a
limited partnership.
"GOVERNMENTAL APPROVAL" shall mean any written permit, license, variance,
certification, consent, no-action letter, clearance, exemption or other
approval granted by a Governmental Authority.
"GOVERNMENTAL AUTHORITY" shall mean any international, foreign, federal,
state, regional, county, local or other body or authority of a governmental
entity.
"GUARANTIES" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any Indebtedness, dividend or other obligation, of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent
or otherwise (including, without limitation, such obligations that arise as a
matter of law including obligations of a joint venturer in connection with a
joint venture and of a partner in connection with a partnership), by such
Person: (i) to purchase such Indebtedness or obligation or any Property
constituting security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of such Indebtedness or obligation or (y) to maintain
working capital or other balance sheet condition or otherwise to advance or
make available funds for the purchase or payment of such Indebtedness or
obligation, (iii) to lease Property or to purchase Securities or other
Property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation, or (iv) otherwise to assure the
owner of the Indebtedness or obligation of the primary obligor against loss
in respect thereof. For the purposes of all computations made under this
Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall
be deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed, and a Guaranty in
respect of any other obligation or liability or any dividend shall be deemed
to be Indebtedness equal to the maximum aggregate amount of such obligation,
liability or dividend.
"HARVEST/YIELD RESTRICTION" shall mean any restriction, limitation,
prohibition, constraint, event, occurrence or condition which materially
impairs the cultivation, harvest or yield of timber at a property, including
but not limited to the following conditions or an Environmental and Natural
Resource Law concerning such following conditions:
(1) natural phenomena, including fire, drought, disease or pests;
(2) threatened or endangered species of wildlife, fish or flora;
(3) protected or sensitive habitats (including brooding,
nesting, feeding and sheltering areas) of sensitive, threatened,
endangered or other species of wildlife or fish;
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(4) critical natural resources (including soil, water,
wetlands, riparian areas, forestland and visually sensitive areas);
(5) cultural resource sites (including Properties of historic,
archaeological or tribal significance);
(6) condemnation or other regulation of forestland for public
uses (such as for recreation, wilderness or park purposes);
(7) timber export;
(8) agrichemicals (including fertilizers and pesticides);
(9) environmental quality standards (including non-point source
best management practices);
(10) access and transportation factors (including road
construction and improvement and riparian logging crossings); and
(11) forest practices (including harvest rates, clear cuts and
reforestation).
"HAZARDOUS MATERIAL" shall mean any hazardous or toxic chemical, waste,
byproduct, pollutant, contaminant, compound, product or substance, including,
without limitation, asbestos, polychlorinated biphenyls, petroleum (including
crude oil or any fraction thereof), and any material the exposure to, or
manufacture, possession, presence, use, generation, storage, transportation,
treatment, release, disposal, abatement, cleanup, removal, remediation or
handling of which, is prohibited, controlled or regulated by any
Environmental and Natural Resource Law.
"HOLDER "shall mean any Person which is, at the time of reference, the
registered holder of any outstanding Note.
"HS Corp." is defined in Exhibit C.
"INDEBTEDNESS" of any Person shall mean and include all obligations of
such Person which in accordance with GAAP shall be classified upon a balance
sheet of such Person as liabilities of such Person and in any event shall
include all (i) obligations of such Person for borrowed money, (ii)
obligations secured by any Lien or other charge upon Property owned by such
Person, even though such Person has not assumed or become liable for the
payment of such obligations, (iii) obligations created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person, notwithstanding the fact that the rights and
remedies of the seller, lender or lessor under such agreement in the event of
default are limited to repossession or sale of Property, PROVIDED that the
preceding provisions of this clause (iii) shall not include obligations of
such Person in respect of Operating Leases, (iv) Capitalized Rentals of such
Person, and (v) Guaranties by such Person of Indebtedness of others.
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"INDEMNIFIED MATTERS" is defined in SECTION 4.3(b)(6)(A).
"INDEMNITEES" is defined in SECTION 4.3(b)(6)(A).
"INSTITUTIONAL HOLDER" shall mean any insurance company, bank, savings
and loan association, trust company, investment company, charitable
foundation, broker or dealer registered under the Securities Exchange Act of
1934, as amended, employee benefit plan (as defined in ERISA) or other
institutional investor or financial institution, including, without
limitation, each Purchaser.
"INTEREST EXPENSE" for any period shall mean all interest (including the
interest component of Rentals payable by the Company and its Restricted
Subsidiaries on Capitalized Leases) and all amortization of debt discount and
expense expensed during such period in accordance with GAAP on any
Indebtedness of the Company and its Restricted Subsidiaries for which such
calculations are being made.
"INTERIM CAPITAL TRANSACTIONS" means (i) borrowings, refinancings or
refundings of Current Debt and Funded Debt of the Company or any Restricted
Subsidiary and sales of debt securities (other than for working capital
purposes and other than for items purchased on open account in the ordinary
course of business) by the Company or any Restricted Subsidiary, (ii) sales
of Equity Interests by the Company and (iii) sales or other voluntary or
involuntary dispositions of any assets of the Company or any Restricted
Subsidiary (other than (x) sales or other dispositions of inventory, accounts
receivable and other assets in the ordinary course of business, including the
exchange of timber or real property for other timber or real property, to the
extent that the timber or real property received in exchange is of equal or
greater value, or the sale of timber or real property, to the extent the
proceeds from which are invested within 180 days in other timber or real
property, and (y) sales or other dispositions of assets as a part of normal
retirements or replacements), other than in the context of the commencement
of the dissolution and liquidation of the Company.
"INVESTMENTS" shall mean all investments, in cash or by delivery of
Property made, directly or indirectly in any Person, whether by acquisition
of shares of capital stock, indebtedness or other obligations or Securities
or by loan, advance, capital contribution or otherwise.
"LIEN" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on the common law, statute or contract, and including
but not limited to the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances (including, with respect to stock, stockholder agreements,
voting trust agreements, buy-back agreements and all similar arrangements)
affecting Property. For the purposes of this Agreement, the Company or a
Restricted Subsidiary shall be deemed to be the owner of any Property which
it has acquired or holds subject to a conditional sale agreement, Capitalized
Lease or other arrangement
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pursuant to which title to the Property has been retained by or vested in
some other Person for security purposes, and such retention or vesting shall
constitute a Lien.
"LIMITED PARTNERSHIP INTEREST" shall mean the interest of a limited
partner in a limited partnership.
"MAKE-WHOLE AMOUNT" shall mean in connection with any prepayment or
acceleration of the Notes of a series the excess, if any, of (i) the
aggregate present value as of the date of such prepayment or acceleration of
each dollar of principal being prepaid or accelerated of the Notes of such
series (taking into account the application of such prepayment required by
SECTION 5.1) and the amount of interest (exclusive of interest accrued to the
date of prepayment or acceleration) that would have been payable in respect
of such dollar if such prepayment or acceleration had not been made,
determined by discounting on a semiannually compounded basis such amounts at
the Reinvestment Rate from the respective dates on which they would have been
payable, over (ii) 100% of the principal amount of the outstanding Notes of
the series being prepaid. The Make-Whole Amount shall not be less than zero.
For purposes of any determination of the Make-Whole Amount:
"REINVESTMENT RATE" shall mean (a) the sum of 0.50%, plus the
yield reported at 10:00 A.M. (New York time) on the date of
determination of the Make-Whole Amount by the Telerate Access Service on
the display designated "Page 5" for United States government Securities
having a maturity (rounded to the nearest month) corresponding to the
remaining Weighted Average Life to Maturity of the principal of such
series being prepaid or accelerated (taking into account the application
of such prepayment required by SECTION 5.1), or (b) in the event that
such Telerate Access Service is no longer available or such yield is not
reported as of such time, "REINVESTMENT RATE" shall mean the sum of
0.50%, plus the arithmetic mean of the two yields under the heading
"WEEK ENDING" published in the Statistical Release under the caption
"TREASURY CONSTANT MATURITIES" for the maturity (rounded to the nearest
month) corresponding to the Weighted Average Life to Maturity of the
principal of such series being prepaid or accelerated (taking into
account the application of such prepayment required by SECTION 5.1). If
no maturity exactly corresponds to such Weighted Average Life to
Maturity, yields for the maturity next longer than the Weighted Average
Life to Maturity and for the maturity next shorter than the Weighted
Average Life to Maturity shall be calculated and the Reinvestment Rate
shall be interpolated from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month. For the
purposes of calculating the Reinvestment Rate pursuant to clause (b),
the most recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"STATISTICAL RELEASE" shall mean the statistical release
designated "H.15(519)" or any successor publication which is published
weekly by the Federal Reserve System and which establishes yields on
actively traded United States government Securities adjusted to constant
maturities or, if such statistical release is not published at the time
of any determination hereunder, then such other reasonably comparable
index which
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shall be designated by the Holders holding 66-2/3% in aggregate
principal amount of the outstanding Notes.
"WEIGHTED AVERAGE LIFE TO MATURITY" of the principal amount of
the Notes of a series being prepaid or accelerated shall mean, as of the
time of any determination thereof, the number of years obtained by
dividing the then Remaining Dollar-Years of such principal by the
aggregate amount of such principal. The term "REMAINING DOLLAR-YEARS"
of such principal shall mean the amount obtained by (i) multiplying (x)
the remainder of (1) the amount of principal of such series that would
have become due on each scheduled payment date if such prepayment or
acceleration and the application thereof in accordance with the
provisions of SECTION 5.1 had not been made, less (2) the amount of
principal on the Notes of such series being prepaid or accelerated
scheduled to become due on such date after giving effect to such
prepayment or acceleration, by (y) the number of years (calculated to
the nearest one-twelfth) which will elapse between the date of
determination and such scheduled payment date, and (ii) totaling the
products obtained in (i).
"MANAGING GENERAL PARTNER" is defined in SECTION 2.2.
"MULTIEMPLOYER PLAN" shall have the same meaning as in ERISA.
"NET PROCEEDS" shall mean the gross proceeds of the disposition or sale
of Property, less (i) all reasonable expenses incurred in connection with
such disposition or sale of such Property and (ii) with respect to any Excess
Harvest, all reasonable expenses properly allocable to the harvesting of the
timber constituting the Excess Harvest and other costs incidental thereto.
"1994 NOTES" shall mean the $275,000,000 9.78% Senior Notes due December
1, 2009 of the Company issued under and pursuant to the Note Purchase
Agreement dated as of December 1, 1994 among the Company and the purchasers
listed in Schedule I thereto.
"1995 NOTES" shall mean the $25,000,000 9.60% Senior Notes due December
1, 2009 of the Company issued under and pursuant to the Note Purchase
Agreement dated as of March 15, 1995 among the Company and the purchasers
listed in Schedule I thereto.
"NOTE" shall mean each Series A Note, Series B Note, Series C Note and
Series D Note.
"OPERATING LEASE" shall mean, with respect to any Person, any lease which
is not a Capitalized Lease pursuant to which such Person shall lease real or
personal Property.
"OPERATIONS CASH" for any period shall mean the sum of all cash receipts
of the Company and its Restricted Subsidiaries during such period, on a
cumulative basis and without duplication (including cash receipts from
operations of Restricted Subsidiaries prior to the acquisition thereof by the
Company but excluding (a) cash proceeds from Interim
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Capital Transactions, and (b) net cash receipts from operations in respect of
assets sold during such period), LESS the sum of:
(1) all cash operating expenditures of the Company and its
Restricted Subsidiaries during such period (including, without
limitation, (x) cash operating expenditures of Restricted Subsidiaries
prior to the acquisition thereof by the Company, (y) taxes, if any,
paid by the Company as an entity and by its Restricted Subsidiaries, and
(z) amounts owed to the Managing General Partner as reimbursement for
Specified Expenses)
(2) all cash debt service payments of the Company and its
Restricted Subsidiaries during such period (other than payments or
prepayments of principal and premium (x) required by reason of loan
agreements (including, without limitation, covenants and default
provisions therein) or by lenders, in each case, in connection with
sales or other dispositions of assets or (y) made in connection with
refinancings or refundings of Indebtedness with the proceeds from new
Indebtedness or from the sale of Equity Interests, PROVIDED, that any
payment or prepayment of principal and premium, whether or not then due,
shall be deemed, at the election and in the discretion of the Managing
General Partner, to be refunded or refinanced by any Indebtedness
incurred or to be incurred by the Company simultaneously with or within
180 days prior to or after such payment or prepayment to the extent of
the principal amount of such Indebtedness so incurred)
(3) all cash capital expenditures of the Company and its
Restricted Subsidiaries during such period, except capital expenditures
(including associated transaction costs) relating to (x) Acquisitions,
(y) Capital Additions and Improvements and (z) Interim Capital
Transactions
(4) the amount, if any, by which cash reserves outstanding as
of the end of such period that the Managing General Partner has
determined in its reasonable discretion to be necessary or appropriate
in order to provide funds for the future cash payment of items of the
type referred to in clauses (1) through (3) above exceeds such cash
reserves outstanding at the beginning of such period
(5) the amount, if any, by which any cash reserves outstanding
at the end of such period that the Managing General Partner has
determined in its reasonable discretion to be necessary or appropriate
in order to provide funds for Distributions in respect of any one or
more of the four consecutive fiscal quarters following the end of such
period exceeds such cash reserves outstanding at the beginning of the
such period and
(6) any cash receipts of any Restricted Subsidiary which for
any reason (including pursuant to its organizational documents) is
unavailable for distribution to the Company or any other Restricted
Subsidiary,
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all determined on a consolidated basis. Where cash capital expenditures are
made in part in respect of Acquisitions or Capital Additions and Improvements
and in part for other purposes, the Managing General Partner's good faith
allocation thereof between the portion made for Acquisitions or Capital
Additions and Improvements and the portion made for other purposes shall be
conclusive.
So long as the Company is not a taxpaying entity, taxes paid by the
Company on behalf of, or amounts withheld with respect to, all or less than
all of the Partners shall not be considered cash operating expenditures of
the Company that reduce Operations Cash, but the payment or withholding
thereof shall be deemed to be a distribution of Available Cash to such
Partners. Alternatively, in the discretion of the Managing General Partner,
so long as the Company is not a taxpaying entity, such taxes (if pertaining
to all Partners) may be considered to be cash operating expenditures of the
Company which reduce Operations Cash, but the payment or withholding thereof
shall not be deemed to be a distribution of Available Cash to such Partners.
"OVERDUE RATE" with respect to each series of Notes shall mean a rate per
annum equal to the lesser of (i) the maximum rate of interest allowable by
law and (ii) the rate of interest then borne by the Notes of such series plus
2%.
"PARTNERS" shall mean the Managing General Partner and each other Person
owning a Partnership Interest in the Company.
"PARTNERSHIP" shall mean Crown Pacific Partners, L.P., a Delaware limited
partnership, together with any Person who succeeds to all, or substantially
all Crown Pacific Partners, L.P.'s assets and business.
"PARTNERSHIP AGREEMENT" shall mean the Amended and Restated Agreement of
Limited Partnership of the Company dated as of December 22, 1994 between the
Managing General Partner and the Partnership, as the same may from time to
time be supplemented, amended, or restated as permitted thereby.
"PARTNERSHIP INTEREST" shall mean Limited Partnership Interests and
General Partnership Interests.
"PBGC" is defined in SECTION 4.17(g).
"PERSON" shall mean an individual, partnership, corporation, trust or
limited liability company or other unincorporated organization, and a
government or agency or political subdivision thereof.
"PLAN" shall mean a "pension plan," as such term is defined in ERISA and
which is covered by Title IV of ERISA, other than a Multiemployer Plan,
established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributed or is a member or
otherwise may have any liability.
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"PLANNED VOLUME" shall mean as of the Closing Date 250,000,000 board feet
per annum of timber, and shall be adjusted for any Annual Timber Increase, as
of the Effective Date for such Annual Timber Increase, by increasing such per
annum amount by an amount equal to 15% of such Annual Timber Increase per
annum for a period of 6-2/3 years from such Effective Date. In addition,
such per annum amount shall, if there shall be an Annual Timber Decrease in
any Determination Period, be permanently (with respect to such Annual Timber
Decrease) adjusted, effective as of the Effective Date for such Annual Timber
Decrease, by decreasing such per annum amount in the same proportion that the
Predisposition Timber Amount in respect of such Annual Timber Decrease is
reduced by such Annual Timber Decrease; PROVIDED that such adjustment shall
not be made if the percentage decrease represented by such adjustment would
be less than 5% and if the Asset Coverage Ratio as of the last day of such
Determination Period is at least 2:1. For purposes of the foregoing:
"ANNUAL TIMBER INCREASE" shall mean, for any Determination
Period, the amount, in board feet, by which the number of board feet of
timber acquired by the Company and its Restricted Subsidiaries during
such Determination Period shall exceed the number of board feet of
timber sold or otherwise disposed of by the Company and its Restricted
Subsidiaries during such Determination Period; and "ANNUAL TIMBER
DECREASE" shall mean, for any Determination Period, the amount, in board
feet, by which the number of board feet of timber sold or otherwise
disposed of by the Company and its Restricted Subsidiaries during such
Determination Period shall exceed the number of board feet of timber
acquired by the Company and its Restricted Subsidiaries during such
Determination Period; PROVIDED that, neither such calculation shall
include timber acquired with the Net Proceeds of an Excess Harvest
pursuant to SECTION 4.12.
"ASSET COVERAGE RATIO" shall mean, as of the date of
determination, the ratio of (a) the fair market value (determined in
good faith by a Responsible Officer, but excluding any value based on a
higher and better use thereof) of the timberlands owned by the Company
and its Restricted Subsidiaries on such determination date to (b) Funded
Debt of the Company and its Restricted Subsidiaries on a consolidated
basis on such determination date.
"DETERMINATION PERIOD" shall mean the period from and including
the Closing Date to and including December 31, 1997 and each calendar
year thereafter.
"EFFECTIVE DATE" for any Annual Timber Increase or Annual Timber
Decrease shall be July 1 of the Determination Period for which such
Annual Timber Increase or Annual Timber Decrease, as the case may be,
occurs.
"PREDISPOSITION TIMBER AMOUNT" with respect to any Annual Timber
Decrease shall mean the amount of timber owned by the Company and its
Restricted Subsidiaries as of the first day of the Determination Period
for which such Annual Timber Decrease occurred.
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"PREDECESSOR PARTNERSHIPS" shall mean CPLP and CP Inland.
"PRIVATE PLACEMENT MEMORANDUM" shall mean the Placement Memorandum, dated
June, 1996, prepared by the Company with the assistance of BA Securities, Inc.
"PRO FORMA INTEREST EXPENSE" for any Four Quarter Period shall mean the
Interest Expense payable by the Company and its Restricted Subsidiaries
during such Four Quarter Period on all Current Debt and Funded Debt of the
Company and its Restricted Subsidiaries on a consolidated basis, PLUS the
Interest Expense which would have been payable during such Four Quarter
Period in respect of (i) any Current Debt and Funded Debt to be issued on the
date of determination of Pro Forma Interest Expense and (ii) the Current Debt
or Funded Debt issued after the end of such Four Quarter Period and prior to
such date of determination, in each case, giving effect as of the beginning
of such Four Quarter Period (y) to the incurrence of all such Current Debt
and Funded Debt described in clauses (i) and (ii), and (z) to the application
of any such Funded Debt or Current Debt to the substantially concurrent
repayment of any other Current Debt or Funded Debt outstanding during such
Four Quarter Period. Computations of Pro Forma Interest Expense for Current
Debt and Funded Debt having a variable interest rate shall be calculated at
the rate in effect on the date of such determination.
"PRO FORMA MAXIMUM DEBT SERVICE" shall mean, as of any date of
determination, the highest total amount payable by the Company and its
Restricted Subsidiaries on a consolidated basis, during any Four Quarter
Period, commencing with the fiscal quarter in which such date of
determination occurs and ending on December 31, 2011, in respect of scheduled
principal payments and all Interest Expense with respect to all Current Debt
and Funded Debt of the Company and its Restricted Subsidiaries outstanding on
such date of determination, after giving effect to any Current Debt and
Funded Debt proposed to be incurred on such date and to the substantially
concurrent repayment of any other Current Debt and Funded Debt (i) assuming,
in the case of Current Debt or Funded Debt having a variable interest rate,
that the rate in effect on the date of determination will remain in effect
throughout such period, (ii) including only actual interest payments with
respect to the Current Debt and Funded Debt incurred pursuant to the Working
Capital Facility during the most recent Four Quarter Period and (iii)
treating the principal amount of all Current Debt and Funded Debt outstanding
as of such date of determination under a revolving credit or similar
agreement (other than the Working Capital Facility) as maturing and becoming
due and payable on the scheduled maturity date or dates thereof (including
the maturity of any payment required by any commitment reduction or similar
amortization provision), without regard to any provision permitting such
maturity date to be extended; PROVIDED, HOWEVER, that for purposes of the
foregoing clause (iii), the Company shall be deemed to have elected to have
any amount outstanding under the Acquisition Facility to be amortized in the
manner and over the period provided for therein commencing at the expiration
of the period during which the Acquisition Facility is revolving in nature.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
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"PTE" is defined in SECTION 2.3(a).
"PURCHASERS" is defined in the introductory paragraph to this Agreement.
"RCRA" shall mean the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. SECTIONS 6901 ET SEQ., and any future
amendments.
"RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing
into the environment, including, without limitation, the abandonment or
discarding of barrels, drums, containers, tanks and other receptacles
containing or previously containing any Hazardous Material.
"RENTALS" of any Person shall mean and include as of the date of
determination thereof all fixed payments (including as such all payments
which the lessee is obligated to make to the lessor on termination of the
lease or surrender of the Property) payable by such Person, as lessee or
sublessee under a lease of real or personal Property, but shall be exclusive
of any amounts required to be paid by such Person (whether or not designated
as rents or additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called "percentage
leases" shall be computed solely on the basis of the minimum rents, if any,
required to be paid by the lessee regardless of sales volume or gross
revenues.
"REPORTABLE EVENT" shall mean a "reportable event" as described in
Section 4043 of ERISA for which the notice requirement to the PBGC has not
been waived, PROVIDED that the loss of qualification of a Plan and the
failure to meet the minimum funding standard of Section 412 of the Internal
Revenue Code of 1986, as amended, or Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any waiver of the reporting
requirement by the PBGC.
"RESPONSIBLE OFFICER" shall mean any of the Chief Executive Officer,
President, Chief Financial Officer, General Counsel and any Executive Vice
President of the Managing General Partner.
"RESTRICTED SUBSIDIARY" shall mean any Subsidiary (i) which is organized
under the laws of the United States or Canada or any state or province
thereof; (ii) which conducts substantially all of its business and has
substantially all of its assets within the United States or Canada; (iii) of
which (A) in the case of any corporation, more than 50% of the Voting Stock
is beneficially owned, directly or indirectly by the Company, or (B) in the
case of any partnership, more than 50% of each of the Limited Partnership
Interest and the General Partnership Interest is beneficially owned, directly
or indirectly by the Company; and (iv) which is designated as a Restricted
Subsidiary in the most recent written notice with respect to such Subsidiary
given by the Company pursuant to SECTION 4.18.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
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"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act.
"SENIOR FUNDED DEBT" shall mean all Funded Debt other than Subordinated
Funded Debt.
"SERIES A NOTE" shall mean each 8.01% Senior Note, Series A, due August
1, 2006 issued under and pursuant to this Agreement, including any Note
issued in substitution therefor or replacement thereof pursuant to SECTION
9.1, SECTION 9.2, or SECTION 9.3.
"SERIES B NOTE" shall mean each 8.16% Senior Note, Series B, due August
1, 2011 issued under and pursuant to this Agreement, including any Note
issued in substitution therefor or replacement thereof pursuant to SECTION
9.1, SECTION 9.2, or SECTION 9.3.
"SERIES C NOTE "shall mean each 8.21% Senior Note, Series C, due August
1, 2011 issued under and pursuant to this Agreement, including any Note
issued in substitution therefor or replacement thereof pursuant to SECTION
9.1, SECTION 9.2, or SECTION 9.3.
"SERIES D NOTE" shall mean each 8.25% Senior Note, Series D, due August
1, 2013 issued under and pursuant to this Agreement, including any Note
issued in substitution therefor or replacement thereof pursuant to SECTION
9.1, SECTION 9.2, or SECTION 9.3.
"SOURCE" is defined in SECTION 2.3.
"SPECIFIED EXPENSES" shall mean (i) all reasonable direct and indirect
expenses the Managing General Partner incurs or payments it makes on behalf
of the Company (including, without limitation, salary, bonus, incentive
compensation, and other amounts paid to any Person to perform services for
the Company or for the Managing General Partner in the discharge of its
duties to the Company), and (ii) all other necessary or appropriate
reasonable expenses allocable to the Company or otherwise reasonably incurred
by the Managing General Partner in connection with operating the Company's
business (including without limitation reasonable expenses allocated to the
Managing General Partner by its affiliates and, for so long as Fremont Group,
Inc. owns an interest in the Managing General Partner, an annual fee of
$100,000, payable semi-annually in arrears in consideration of management
services).
"SUBORDINATED FUNDED DEBT" shall mean all unsecured Funded Debt of the
Company which shall contain or have applicable thereto subordination
provisions substantially in the form set forth in Exhibit G attached hereto
providing for the subordination thereof to other Funded Debt of the Company,
including, without limitation, the Notes.
"SUBSIDIARY" shall mean, as to any particular parent business entity, any
business entity of which such parent business entity and/or one or more
business entities which are themselves subsidiaries of such parent business
entity, (i) in the case of any corporation, own more than 50% of the Voting
Stock, or (ii) in the case of any partnership, own more than 50% of the
Limited Partnership Interest, or own a Controlling General Partnership
Interest.
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"SUBSIDIARY" shall mean a subsidiary of the Company.
"SURVIVING ENTITY" is defined in SECTION 4.9(2)(i).
"UNRESTRICTED SUBSIDIARY" shall mean any Subsidiary other than a
Restricted Subsidiary.
"VOTING EQUITY INTEREST" shall mean Voting Stock and General Partnership
Interests.
"VOTING STOCK" of any Person shall mean Securities of any class or
classes, the holders of which are entitled at such time to elect a majority
of the corporate directors of such Person (or Persons performing similar
functions).
"W-I" is defined in Exhibit B.
"WHOLLY-OWNED" when used in connection with any Subsidiary shall mean (i)
in the case of a corporation, a Subsidiary of which all the issued and
outstanding shares of stock (except shares required as directors' qualifying
shares) and all Indebtedness shall be owned by the Company and/or one or more
of its Wholly-owned Subsidiaries, and (ii) in the case of any partnership
shall mean a Subsidiary of which all of the outstanding General Partnership
Interests are owned by the Managing General Partner and all of the Limited
Partnership Interests and all Indebtedness shall be owned by the Company
and/or one or more of its Wholly-owned Subsidiaries.
"WORKING CAPITAL CREDIT AGREEMENT" is defined in SECTION 3.9.
"WORKING CAPITAL FACILITY" shall mean the facility made available to the
Company for working capital and general partnership purposes pursuant to the
Working Capital Credit Agreement, as from time to time renewed, extended,
amended and supplemented and any other credit agreement from time to time
entered into by the Company for purposes of obtaining working capital
financing, PROVIDED that such facility or facilities shall not be for an
amount in excess of $40,000,000 in the aggregate.
"WORKING CAPITAL RESERVE" shall mean the amount, if any, available to be
borrowed at the time of determination under the Working Capital Facility, up
to a maximum of $40,000,000.
SECTION 8.2. ACCOUNTING PRINCIPLES. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required
to be made for the purposes of this Agreement the same shall be done in
accordance with GAAP, to the extent applicable, except (i) that audit
adjustments shall be effective as of the related period and not as of the
period made, and (ii) where such principles are inconsistent with the
requirements of this Agreement.
SECTION 8.3. DIRECTLY OR INDIRECTLY. Where any provision of this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such
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provision shall be applicable whether such action is taken directly or
indirectly by such Person.
SECTION 9. MISCELLANEOUS.
SECTION 9.1. REGISTERED NOTES. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the
Notes and the Company will register or transfer or cause to be registered or
transferred as hereinafter provided any Note issued pursuant to this
Agreement, PROVIDED that nothing in this SECTION 9.1 shall be construed to
require the Company to register the Notes under the Securities Act or the
United States Securities Exchange Act of 1934, as amended.
At any time and from time to time the registered Holder holding any Note
which has been duly registered as hereinabove provided may transfer such Note
upon surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered Holder or its attorney duly authorized in writing. Any transferee
of a Note shall, by its acceptance of such Note, be deemed to have made the
same representations to the Company regarding the purchase of the Note as the
original Purchaser made pursuant to SECTION 2.3; PROVIDED, HOWEVER, that with
respect to the representation made in the third sentence of SECTION 2.3, such
transferee will not be deemed to have chosen the options set forth in
SECTION 2.3(b), (c), (d) or (f) unless such transferee shall have made the
disclosures referred to therein at least ten Business Days prior to its
acceptance of such Note and shall have received prior to its acceptance of
such Note written confirmation from the Company to the effect set forth in
the first sentence of Paragraph 20 of Exhibit B-1 hereto. The Company shall
exercise such reasonable due diligence as is necessary to respond to any such
disclosure, PROVIDED THAT, if the Company shall not respond within 10
Business Days following receipt of any such disclosure, it shall be deemed to
have made such confirmation.
The Person in whose name any registered Note shall be registered shall be
deemed and treated as the owner and Holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered Holder.
SECTION 9.2. EXCHANGE OF NOTES. At any time and from time to time, upon
not less than ten days' notice to that effect given by the Holder holding any
Note initially delivered or of any Note substituted therefor pursuant to
SECTION 9.1, this SECTION 9.2 or SECTION 9.3, and, upon surrender of such
Note at its office, the Company will deliver in exchange therefor, without
expense to such Holder, except as set forth below, a Note of the same series
and for the same aggregate principal amount as the then unpaid principal
amount of the Note so surrendered, or Notes of the same series in the
denomination of $1,000,000 or any amount in excess thereof as such Holder
shall specify, dated as of the date to which interest has been paid on the
Note so surrendered or, if such surrender is prior to the payment of any
interest thereon, then dated as of the date of issue, registered in the name
of such Person or Persons as may be designated by such Holder, and otherwise
of the same form and tenor as the Notes so
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surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
SECTION 9.3. LOSS, THEFT, ETC. OF NOTES. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
any Note, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of the Note, the Company will make and
deliver without expense to the Holder thereof, a new Note, of the same series
and of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note.
If the Purchaser or any subsequent Institutional Holder is the owner of any
such lost, stolen or destroyed Note, then the affidavit of an authorized
officer of such owner, setting forth the fact of loss, theft or destruction
and of its ownership of such Note at the time of such loss, theft or
destruction shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the
Company.
SECTION 9.4. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE. No
delay or failure on the part of any Holder in the exercise of any power or
right shall operate as a waiver thereof nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of any
Holder are cumulative to, and are not exclusive of, any rights or remedies
any such Holder would otherwise have, and no waiver or consent shall extend
to or affect any obligation or right not expressly waived or consented to.
SECTION 9.5. NOTICES. (a) All communications under this Agreement shall
be in writing and shall be mailed by registered or certified mail, postage
prepaid or shall be sent by overnight courier:
(1) If to any Purchaser, at such Purchaser's address appearing
on Schedule I hereto, marked for attention as there indicated, or at
such other address as such Purchaser or any subsequent Holder may have
furnished to the Company in writing or
(2) If to the Company, at its address beneath its signature at
the foot of this Agreement, or at such other address as it may have
furnished in writing to each Holder.
(b) Any notice so addressed and mailed by registered or certified mail
to any Holder shall be deemed to be given when delivered to such Holder and
any notice so addressed and sent by overnight courier to any Holder shall be
deemed to be given when delivered to such Holder.
SECTION 9.6. REPRODUCTION OF DOCUMENTS. This Agreement and all
documents relating thereto including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by each Purchaser at the closing of its
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purchase of the Notes (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter
furnished to such Purchaser, may be reproduced by such Purchaser by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and such Purchaser may destroy any original document so
reproduced. The Company agrees and stipulates that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by such Purchaser in the regular
course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 9.7. SURVIVAL. All warranties, representations and covenants
made by the Company herein or on any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered to
have been relied upon by each Purchaser and shall survive the delivery to
such Purchaser of the Notes regardless of any investigation made by such
Purchaser or on its behalf. All representations made by the Purchasers in
SECTION 2.3 shall be considered to have been relied upon by the Company and
shall survive the delivery to the Company of the purchase price of the Notes
regardless of any investigation made by the Company or on its behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Company hereunder.
SECTION 9.8. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties. The provisions of this Agreement are intended to be for the benefit
of all Holders, from time to time, and shall be enforceable by any such
Holder, whether or not an express assignment to such Holder of rights under
this Agreement has been made by any Purchaser or its successor or assign.
SECTION 9.9. GOVERNING LAW. This Agreement and the Notes shall be
governed by and construed in accordance with the laws of the State of New
York.
SECTION 9.10. SUBMISSION TO JURISDICTION. The Company hereby
irrevocably submits to the jurisdiction of the courts of the State of New
York and of the courts of the United States of America having jurisdiction in
the State of New York for the purpose of any legal action or proceeding in
any such court with respect to, or arising out of, this Agreement. The
Company designates and appoints Prentice Hall Legal & Financial Services, 00
Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and its successors as the
Company's lawful agent in the United States of America upon which may be
served and which may accept and acknowledge, for and on behalf of the Company
all process in any action, suit or proceedings that may be brought against
the Company in any of the courts referred to in this SECTION 9.10, and agrees
that such service of process, or the acceptance or acknowledgment thereof by
said agent, shall be valid, effective and binding in every respect PROVIDED,
HOWEVER, that if said agency shall cease for any reason whatsoever, the
Company hereby designates and appoints, without power or revocation, the
Secretary of State of the State of New York to serve as its agent for service
of process. If any Holder shall cause process to be served upon the Company
by being served upon such agent, a copy of such process shall also be mailed
to the Company by registered mail, first class postage prepaid, at the
Company's address set
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forth at the foot of this Agreement. Nothing contained in this SECTION 9.10
shall limit the right of any Holders to take proceedings against the Company
in any other court of competent jurisdiction nor, by virtue of anything
contained herein, shall the taking of proceedings in one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction
whether concurrently or not.
SECTION 9.11. LIMITATIONS OF LIABILITY. Anything in this Agreement to
the contrary notwithstanding, neither the Holders nor the successors or
assigns thereof shall have any claim, remedy or right to proceed against (i)
the Managing General Partner or (ii) any past, present or future partner,
employee, director, officer, stockholder or incorporator of the Managing
General Partner, the Partnership or any subsidiary thereof (other than the
Company) for the payment of any deficiency or any other sum owing on account
of the Indebtedness evidenced by the Notes or for the payment of any
liability resulting from the breach of any covenant, agreement, warranty or
representation of any nature whatsoever in this Agreement or in any
certificate delivered pursuant hereto. Nothing herein contained shall limit,
restrict or impair the rights of the Holders to accelerate the maturity of
the Notes upon an Event of Default, to bring suit and obtain a judgment
against the Company on the Notes, to execute any such judgment on the
Company's Properties or to exercise all other rights and remedies against the
Company provided under this Agreement.
SECTION 9.12. SEVERABILITY. Should any part of this Agreement for any
reason be declared invalid, such decision shall not affect the validity of
any remaining portion, which remaining portion shall remain in force and
effect as if this Agreement had been executed with the invalid portion
thereof eliminated.
SECTION 9.13. CAPTIONS. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
SECTION 9.14. DUPLICATE ORIGINALS. Two or more counterparts of this
Agreement may be signed by the parties, each of which shall be an original
but all of which together shall constitute one and the same instrument.
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The execution hereof by the Purchasers shall constitute a contract among
the Company and the Purchasers for the uses and purposes hereinabove set
forth.
CROWN PACIFIC LIMITED PARTNERSHIP, a
Delaware limited partnership
By: CROWN PACIFIC MANAGEMENT
LIMITED PARTNERSHIP, a Delaware
limited partnership
Its General Partner
By: HS Corp. of Oregon, an Oregon
corporation
Its General Partner
By: /s/ XXXXXXX X. XXXXXX
Its Treasurer
Crown Pacific Limited Partnership
000 X.X. Morrison Street
Portland, Oregon 97204
Attention: Xxxxx X. Xxxxx
Telefacsimile number: (000) 000-0000
Confirmation number: (000) 000-0000
Acknowledged (as to representations made
pursuant to SECTION 2.2) by:
CROWN PACIFIC MANAGEMENT
LIMITED PARTNERSHIP, a
Delaware limited partnership
As Managing General Partner
By: HS Corp. of Oregon, an Oregon
corporation
Its General Partner
By: /s/ XXXXXXX X. XXXXXX
Its Treasurer
Crown Pacific Management Limited
Partnership
000 X.X. Morrison Street
Portland, Oregon 97204
Attention: Xxxxx X. Xxxxx
Telefacsimile number: (000) 000-0000
Confirmation number: (000) 000-0000
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Accepted as of August 1, 1996:
XXXX XXXXXXX MUTUAL LIFE INSURANCE
COMPANY
By: /s/ XXX XXXXX, XX.
Its Senior Investment Officer
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Accepted as of August 1, 1996:
COMMONWEALTH OF PENNSYLVANIA
STATE EMPLOYEES' RETIREMENT SYSTEM
By: Xxxx Xxxxxxx Mutual Life Insurance
Company, as Investment Adviser
By /s/ XXXXXXX X. XXXXXXX
[authorized Xxxx Xxxxxxx Officer]
Senior Investment Officer
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Accepted as of August 1, 1996:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ XXXXXX XXXXX-XXXX
Its Associate Director-Private
Placements
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Accepted as of August 1, 1996:
ALLSTATE LIFE INSURANCE COMPANY
By /s/ XXXXXXXX X. XXXXXX
Name:
By /s/ XXXXXX X. XXXXX
Name:
Authorized Signatories
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Accepted as of August 1, 1996:
ALLSTATE INSURANCE COMPANY
By /s/ XXXXXXXX X. XXXXXX
Name:
By /s/ XXXXXX X. XXXXX
Name:
Authorized Signatories
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Accepted as of August 1, 1996:
ALLSTATE LIFE INSURANCE COMPANY OF
NEW YORK
By /s/ XXXXXXXX X. XXXXXX
Name:
By /s/ XXXXXX X. XXXXX
Name:
Authorized Signatories
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Accepted as of August 1, 1996:
PROVIDENT LIFE AND ACCIDENT INSURANCE
COMPANY
By /s/ XXXXX X. XXXXXX
Its Vice President
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