CONFORMED COPY
U.S. TIMBERLANDS COMPANY, L.P.
7,458,684 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
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November 13, 1997
XXXXX XXXXXX INC.
DEUTSCHE XXXXXX XXXXXXXX INC.
X.X. XXXXXXX & SONS, INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
U.S. Timberlands Company, L.P., a Delaware limited partnership (the
"Partnership"), proposes to issue and sell (the "Offering") an aggregate of
7,458,684 common units (the "Firm Units") representing limited partner interests
in the Partnership (the "Common Units") to the several underwriters named in
Schedule I hereto (the "Underwriters"), upon the terms and conditions set forth
in Section 2 hereof. The Partnership also proposes to sell to the Underwriters,
upon the terms and conditions set forth in Section 2 hereof, up to an additional
1,118,803 Common Units (the "Additional Units"). The Firm Units and the
Additional Units are hereinafter collectively referred to as the "Units."
It is understood and agreed to by all parties that the Partnership was
formed to acquire, own and operate the business and assets of U.S. Timberlands
Services Company, L.L.C., a Delaware limited liability company (to be renamed
"U.S. Timberlands Management Company, L.L.C.") ("Old Services"), and to acquire
the equity interests in U.S. Timberlands Klamath Falls, L.L.C., a Delaware
limited liability company (the "Operating Company"). New Services, L.L.C., a
recently formed Delaware limited liability company (to be renamed "U.S.
Timberlands Services Company, L.L.C.") (the "General Partner" and, together with
the Partnership and the Operating Company, the
"U.S. Timberlands Parties"), will serve as the managing member of the Operating
Company and as the general partner of the Partnership.
The member interests of Old Services are held by Messrs. Xxxx Xxxxx
("Xxxxx"), Xxxx Xxxxxxxx ("Xxxxxxxx") and Xxxxxx Xxxxxx ("Xxxxxx") in the
amounts of 82.5%, 10% and 7.5%, respectively. The member interests of the
Operating Company are held 99% by U.S. Timberlands Holdings, L.L.C., a Delaware
limited liability company ("Holdings"), and 1% by Rudey Timber Company, L.L.C.,
a Delaware limited liability company ("Rudey Timber Company"). The membership
interests of Holdings are owned 1% by Rudey and 99% by Rudey Timber Company.
Rudey Timber Company is wholly owned by Rudey through a 99% directly held member
interest and a 1% member interest held by Xxxxxx Properties Holdings, Inc., a
New York corporation wholly owned by Rudey ("Xxxxxx Holdings").
Prior to or concurrently with the execution hereof, the Operating Company
and U.S. Timberlands Finance Corp., a recently formed Delaware corporation
("Finance Corp."), will enter into (a) an underwriting agreement (the "Note
Underwriting Agreement") with the several underwriters thereunder, providing for
the issuance and sale to such underwriters of $225 million aggregate principal
amount of unsecured senior notes (the "Notes") under an indenture relating to
the Notes (the "Indenture") and (b) will enter into a bank credit agreement (the
"Bank Credit Agreement") providing for a $25 million working capital facility
and a $75 million acquisition facility.
It is further understood and agreed by all parties that the following
transactions will occur on the Closing Date (as defined in Section 4): (i)
pursuant to a Contribution, Conveyance and Assumption Agreement (the
"Contribution Agreement"), Old Services will contribute substantially all of its
assets (the "Transferred Assets") to the General Partner in exchange for an
additional member interest in the General Partner; (ii the Operating Company
will assume certain indebtedness of Holdings, as described in the Registration
Statement (as defined in Section 1) (the "Holdings Debt"); (ii the General
Partner will contribute the portion of the Transferred Assets consisting of
working capital and timber operations to the Operating Company in exchange for
an additional member interest in the Operating Company; (iv Rudey Timber Company
will contribute its 1% member interest in the Operating Company to Holdings in
exchange for an additional member interest in Holdings; (v) the General Partner
will contribute all but 1.0101% of its member interest in the Operating Company
to the Partnership in exchange for (A) the continuation of its 1% general
partner interest in the Partnership, (B) the Incentive Distribution Rights (as
defined in the Agreement of Limited Partnership of the Partnership (as the same
may be amended or restated at or prior to the Closing Date, the "Partnership
Agreement") between the General Partner and Rudey, as organizational limited
partner (in such capacity, the "Organizational Limited Partner")), and (C)
1,387,963 subordinated limited partner interests in the Partnership
("Subordinated Units"); (vi Holdings will contribute all of its member interest
in the Operating Company to the Partnership
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in exchange for 2,894,157 Subordinated Units; (vi as a capital contribution, the
Partnership will contribute all of the issued and outstanding shares of capital
stock of Finance Corp. to the Operating Company; (viii) the public offering of
Firm Units contemplated hereby will be consummated; (ix) as a capital
contribution, the Partnership will contribute the net proceeds to the
Partnership of the Offering to the Operating Company; (x) the Operating Company
and Finance Corp. will issue the Notes pursuant to the Note Underwriting
Agreement and the Indenture; (xi) the closing under the Bank Credit Agreement
will occur; (xii) the Operating Company will use cash on hand, the proceeds to
it from the sale of the Notes, borrowings under the acquisition facility of the
Bank Credit Agreement and the net proceeds of the Offering contributed to it by
the Partnership to (A) repay the Holdings Debt, (B) repay all indebtedness of
the Operating Company under the Credit Agreement dated as of July 14, 1997 among
the Operating Company, Old Services and certain financial institutions party
thereto (the "Existing Credit Agreement") and (C) pay the expenses of each of
the Offering, the offering of the Notes and other expenses; (xiii) the General
Partner will distribute the 1,387,963 Subordinated Units held by it to Old
Services; and (xiv) Old Services will redeem Xxxxxxxx' interest in Old Services
in exchange for (A) 95,238 Subordinated Units and (B) $1 million (the latter
payable in January 1998) and will redeem Xxxxxx'x interest in Old Services in
exchange for 48,160 Subordinated Units.
The transactions described above in clauses (i) through (xiv) are
collectively referred to as the "Transactions." In connection with the
consummation of the Transactions, the Partnership, the Operating Company, the
General Partner, Old Services and Holdings will enter into various bills of
sale, conveyances, deeds and other assignments (collectively with the
Contribution Agreement, the "Conveyance Agreements").
The Partnership, the Operating Company, the General Partner, Old Services
and Holdings (the "U.S. Timberlands Entities") wish to confirm as follows their
agreement with you (the "Representatives") and the several other Underwriters on
whose behalf you are acting, in connection with the several purchases of the
Units by the Underwriters.
1. Registration Statement and Prospectus. The Partnership has prepared
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and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 under the Act (Commission File No.
333-32811) (the "registration statement"), including a prospectus subject to
completion relating to the Units. The term "Registration Statement" as used in
this Agreement means the registration statement (including all financial
schedules and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a post-
effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Units may commence, the term
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"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If it is contemplated,
at the time this Agreement is executed, that a registration statement or a post-
effective amendment will be filed pursuant to Rule 462(b) or Rule 462(d) under
the Act before the offering of the Units may commence, the term "Registration
Statement" as used in this Agreement includes such registration statement. The
term "Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement, or, if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under the Act
and such information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectus filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the preliminary
prospectus dated October 24, 1997 relating to the Common Units as such
preliminary prospectus shall have been amended from time to time prior to the
date of the Prospectus.
2. Agreements to Sell and Purchase. The Partnership hereby agrees,
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subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the U.S. Timberlands Entities herein contained and subject to all
the terms and conditions set forth herein, each Underwriter agrees, severally
and not jointly, to purchase from the Partnership, at a purchase price of $19.61
per Unit (the "purchase price per Unit"), the number of Firm Units set forth
opposite the name of such Underwriter in Schedule I hereto (or such number of
Firm Units increased as set forth in Section 10 hereof).
The Partnership also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the U.S. Timberlands Entities
herein contained and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right to purchase from the Partnership, at the
purchase price per Unit, pursuant to an option (the "over-allotment option")
which may be exercised at any time and from time to time prior to 7:00 P.M., New
York City time, on the 30th day after the date of the Prospectus (or, if such
30th day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the Nasdaq National Market is open for trading), up to an
aggregate of 1,118,803 Additional Units. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Units. Upon any
exercise of the over-allotment option, each Underwriter, severally and not
jointly, agrees to purchase from the Partnership the number of Additional Units
(subject to such adjustments as you may determine in order to avoid fractional
Units) which bears the same proportion to the number of Additional Units to be
purchased by the Underwriters as the number of Firm Units set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Units
increased as set forth in Section 10 hereof) bears to the aggregate number of
Firm Units.
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3. Terms of Public Offering. The Partnership has been advised by you
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that the Underwriters propose to make a public offering of their respective
portions of the Units as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Units upon the terms set forth in the Prospectus.
4. Delivery of the Units and Payment Therefor. Delivery to the
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Underwriters of and payment for the Firm Units shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
A.M., New York City time, on November 19, 1997 (the "Closing Date"). The place
of closing for the Firm Units and the Closing Date may be varied by agreement
between you and the Partnership.
Delivery to the Underwriters of and payment for any Additional Units to be
purchased by the Underwriters shall be made at the aforementioned office of
Xxxxx Xxxxxx Inc. at such time on such date (the "Option Closing Date"), which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Partnership of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Units. The place of closing for any Additional Units and the Option
Closing Date for such Units may be varied by agreement between you and the
Partnership.
Certificates for the Firm Units and for any Additional Units to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 5:00 P.M., New York City time, on the third
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 11:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Units and any Additional
Units to be purchased hereunder shall be delivered to you on the Closing Date or
the Option Closing Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.
5. Agreements of the U.S. Timberlands Entities. Each of the U.S.
-------------------------------------------
Timberlands Entities, jointly and severally, agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Units may commence, the
Partnership and the General Partner will endeavor to cause the Registration
Statement or such post-effective amendment to become effective as soon as
possible and will advise you promptly and, if requested by you, will confirm
such advice in writing, when the Registration Statement or such post-effective
amendment has become effective.
(b) The Partnership will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a
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supplement to the Registration Statement, any Prepricing Prospectus or the
Prospectus or for additional information; (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Units for offering or sale in any
jurisdiction or the initiation of any proceeding for such purpose; and (iii)
within the period of time referred to in paragraph (f) below, of any change in
the condition (financial or other), business, prospects, properties, net worth
or results of operations of the U.S. Timberlands Parties, taken as a whole, or
of the happening of any event which makes any statement of a material fact made
in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or any
other applicable law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Partnership and
the General Partner will make every reasonable effort to obtain the withdrawal
of such order at the earliest possible time.
(c) The Partnership will furnish to you, without charge, (i) two XXXXX
versions of the registration statement as originally filed with the Commission
and of each amendment thereto, including financial statements and all exhibits
to the registration statement, (ii) two manually signed copies of the
registration statement corresponding to the XXXXX version filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits to the registration statement, and (iii) such number of conformed
copies of the registration statement as originally filed and of each amendment
thereto, but without exhibits, as you or your counsel may reasonably
request.
(d) The Partnership will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which you shall not previously have been advised or to which you or your counsel
shall reasonably object in writing after being so advised or (ii) so long as, in
the opinion of counsel for the Underwriters, a Prospectus is required to be
delivered in connection with sales by any Underwriter or dealer, file any
information, documents or reports pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without delivering a copy of such
information, documents or reports to you, as Representatives of the
Underwriters, prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Partnership has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of the Prepricing Prospectus. The
Partnership consents to the use, in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the Units
are offered by the several Underwriters and by dealers, prior to the date of the
Prospectus, of each Prepricing Prospectus so furnished by the Partnership.
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(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer, the Partnership will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. At any time after nine months after the time of
issuance of the Prospectus, upon request, but at your expense, the Partnership
will deliver as many copies of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act as you may reasonably request, provided that a
prospectus is required by the Act to be delivered in connection with sales of
Units by any Underwriter or dealer. The Partnership consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Units are offered by the several Underwriters and by
all dealers to whom Units may be sold, both in connection with the offering and
sale of the Units and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by any Underwriter
or dealer. If during such period of time any event shall occur that in the
judgment of the Partnership or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus (as then amended or supplemented) or
should be set forth therein in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
is necessary to supplement or amend the Prospectus to comply with the Act or any
other law, the Partnership will forthwith prepare and, subject to the provisions
of paragraph (d) above, file with the Commission an appropriate supplement or
amendment thereto, and will expeditiously furnish to the Underwriters and
dealers a reasonable number of copies thereof; provided that if any such event
necessitating a supplement or amendment to the Prospectus occurs at any time
after nine months after the time of issuance of the Prospectus, such supplement
or amendment shall be prepared at your expense. In the event that the
Partnership and you, as Representatives of the several Underwriters, agree that
the Prospectus should be amended or supplemented, the Partnership, if requested
by you, will promptly issue a press release announcing or disclosing the matters
to be covered by the proposed amendment or supplement.
(g) The Partnership and the General Partner will cooperate with you
and with counsel for the Underwriters in connection with the registration or
qualification of the Units for offering and sale by the several Underwriters and
by dealers under the securities or Blue Sky laws of such jurisdictions as you
may designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Partnership or the General
Partner be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to service of
process in suits, other than those arising out of the offering or sale of the
Units, in any jurisdiction where it is not now so subject.
(h) The Partnership will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15
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months thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section 11(a) of
the Act.
(i) During the period of two years hereafter, the Partnership will
furnish to you (i) as soon as publicly available, a copy of each report of the
Partnership mailed to unitholders or filed with the Commission or the principal
national securities exchange or automated quotation system upon which the Units
may be listed, and (ii) from time to time such other information concerning the
Partnership as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of any of the U.S. Timberlands Entities to comply with the terms or fulfill
any of the conditions of this Agreement, the U.S. Timberlands Entities, jointly
and severally, agree to reimburse the Representatives for all reasonable out-of-
pocket expenses (including reasonable fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
(k) The Partnership will apply the net proceeds from the sale of the
Units, the Operating Company and Finance Corp. will apply the net proceeds from
the sale of the Notes and the Operating Company will apply any amount drawn
under the Bank Credit Agreement and all amounts contributed to it by the
Partnership from the sale of the Units, in accordance with the description set
forth under the caption "Use of Proceeds" in the Prospectus.
(l) If Rule 430A of the Act is employed, the Partnership will timely
file the Prospectus pursuant to Rule 424(b) under the Act and will advise you of
the time and manner of such filing.
(m) Except as provided in this Agreement, the U.S. Timberlands
Entities will not (i) offer, sell, contract to sell or otherwise dispose of any
Common Units or Subordinated Units, any securities that are convertible into or
exercisable or exchangeable for or that represent the right to receive Common
Units or Subordinated Units or any securities that are senior to or pari passu
with Common Units, or (ii) grant any options or warrants to purchase Common
Units or Subordinated Units (other than the grant of options to purchase Common
Units pursuant to the U.S. Timberlands 1997 Long-Term Incentive Plan), for a
period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxx Xxxxxx Inc., except for the issuance and transfer of Common
Units and Subordinated Units to occur upon the closing of the Offering described
in the Prospectus; provided however, that, notwithstanding the foregoing, each
of Old Services and Holdings may transfer any of the above-mentioned securities
held by them to Xxxx X. Xxxxx, any member of his immediate family or a trust,
family partnership or similar family-related or family controlled entity, all of
the interests of which are owned by Xxxx X. Xxxxx or members of his immediate
family, so long as such transferee shall execute a letter agreement in
substantially the form of Exhibit A hereto agreeing to the foregoing
restrictions.
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(n) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the U.S. Timberlands Entities have not taken, and
will not take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Units to facilitate the sale or resale of the Units.
(o) Each of the U.S. Timberlands Parties will take such steps as shall
be necessary to ensure that none of them shall become an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder.
(p) The Partnership shall timely complete all required filings and
otherwise fully comply in a timely manner with all provisions of the Exchange
Act, including the rules and regulations thereunder, in connection with the
registration of the Units thereunder.
(q) Each of the U.S. Timberlands Parties will cause to be accomplished
or obtained as soon as practicable all consents, recordings and filings
necessary to perfect, preserve and protect the title of the Operating Company to
the properties and assets owned by it as a result of the Transactions.
6. Representations and Warranties of the U.S. Timberlands Entities. The
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U.S. Timberlands Entities, jointly and severally (except that the
representations and warranties contained in Sections 6(k) and 6(l) are made
solely by Old Services and the representations and warranties contained in
Sections 6(m) and 6(n) are made solely by Holdings), represent and warrant to
each Underwriter that:
(a) Any Prepricing Prospectus, at the date of filing thereof with the
Commission, complied in all material respects with the requirements of the Act
and did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus. The Registration Statement in
the form in which it became or becomes effective and also in such form as it may
be when any post-effective amendment thereto shall become effective and the
Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act complied or will comply in all
material respects with the provisions of the Act and did not or will not at any
such times contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. Each of the statements made by the Partnership in such
documents within the coverage of Rule 175(b) of the rules and regulations under
the Act, including (but not limited to) any statements with respect to future
available cash or future cash distributions
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of the Partnership, the anticipated ratio of taxable income to distributions or
the size of the Partnership's expected harvest was made or will be made with a
reasonable basis and in good faith. Notwithstanding the foregoing, no
representation and warranty is made as to statements in or omissions from the
Registration Statement, the Prospectus or any Prepricing Prospectus made in
reliance upon and in conformity with information furnished to the Partnership in
writing by or on behalf of any Underwriter through you expressly for use
therein.
(b) The Partnership has been duly formed and is validly existing in
good standing as a limited partnership under the Delaware Revised Uniform
Limited Partnership Act (the "Delaware LP Act") with full partnership power and
authority to own or lease its properties to be owned or leased at the Closing
Date, to assume the liabilities being assumed by it pursuant to the Conveyance
Agreements and to conduct its business to be conducted at the Closing Date, in
each case in all material respects as described in the Registration Statement
and the Prospectus. The Partnership is, or at the Closing Date will be, duly
registered or qualified as a foreign limited partnership for the transaction of
business under the laws of each jurisdiction in which the character of the
business conducted by it or the nature or location of the properties owned or
leased by it makes such registration or qualification necessary, except where
the failure so to register or qualify would not (i) have a material adverse
effect on the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Partnership and the Operating
Company, taken as a whole, or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(c) The Operating Company has been duly formed and is validly existing
in good standing as a limited liability company under the Delaware Limited
Liability Company Act (the "Delaware LLC Act") with full limited liability
company power and authority to own or lease its properties to be owned or leased
at the Closing Date, to assume the liabilities being assumed by it pursuant to
the Conveyance Agreements and to conduct its business to be conducted at the
Closing Date, in each case in all material respects as described in the
Registration Statement and the Prospectus. The Operating Company is, or at the
Closing Date will be, duly registered or qualified as a foreign limited
liability company for the transaction of business under the laws of each
jurisdiction in which the character of the business conducted by it or the
nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure so to register
or qualify would not (i) have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Partnership and the Operating Company, taken as a whole, or
(ii) subject the limited partners of the Partnership to any material liability
or disability.
(d) The General Partner has been duly formed and is validly existing
in good standing as a limited liability company under the Delaware LLC Act with
full limited liability company power and authority to own or lease its
properties to be owned or leased at the Closing Date, to conduct its business to
be conducted at the Closing Date and to act as general partner of the
Partnership and as managing member of the Operating Company, in each case in all
material respects as described in the Registration Statement and the Prospectus.
The General Partner is duly registered or qualified as a foreign limited
liability company for the transaction of business
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under the laws of each jurisdiction in which the character of the business
conducted by it or the nature or location of the properties owned or leased by
it makes such registration or qualification necessary, except where the failure
so to register or qualify would not (i) have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the General Partner or (ii) subject the limited
partners of the Partnership to any material liability or disability.
(e) None of the U.S. Timberlands Parties or Finance Corp. has any
subsidiaries, other than the Partnership and Operating Company themselves and
Finance Corp.
(f) At the Closing Date and the Option Closing Date, after giving
effect to the Transactions, the General Partner will be the sole general partner
of the Partnership with a 1% general partner interest in the Partnership; such
general partner interest will be duly authorized and validly issued in
accordance with the Partnership Agreement; the General Partner will own all of
the Incentive Distribution Rights; such Incentive Distribution Rights will be
duly authorized and validly issued in accordance with the Partnership Agreement
and are fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters
described in the Prospectus under the caption "The Partnership Agreement--
Limited Liability") and the General Partner will own such general partner
interest and Incentive Distribution Rights free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(g) At the Closing Date, after giving effect to the Transactions,
Holdings, Old Services, Xxxxxxxx and Xxxxxx will own limited partner interests
in the Partnership represented by 2,894,157, 1,244,565, 95,238 and 48,160
Subordinated Units, respectively; all of such Subordinated Units and the limited
partner interests represented thereby will be duly authorized and validly issued
in accordance with the Partnership Agreement, and will be fully paid (to the
extent required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in the Prospectus
under the caption "The Partnership Agreement--Limited Liability"); and Holdings
and Old Services will hold their respective
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limited partner interests represented by their Subordinated Units free and clear
of all liens, encumbrances, security interests, equities, charges or claims,
except as provided in that certain Pledge Agreement by and among Xxxx X. Xxxxx,
Xxxxxx Xxxxx and Xxxxx Xxxxxx Holdings Inc. (the "Rudey Pledge Agreement").
(h) At the Closing Date, there will be issued to the Underwriters the
Firm Units (assuming no purchase by the Underwriters of Additional Units); at
the Closing Date or the Option Closing Date, as the case may be, the Firm Units
or the Additional Units, as the case may be, and the limited partner interests
represented thereby will be duly authorized by the Partnership Agreement and,
when issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid (to the
extent required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in the Prospectus
under the caption "The Partnership Agreement--Limited Liability"); and other
than the Subordinated Units owned by Holdings, Old Services, Xxxxxxxx and Xxxxxx
as set forth above and the Incentive Distribution Rights issued to the General
Partner, the Units will be the only limited partner interests of the Partnership
issued and outstanding at the Closing Date or the Option Closing Date.
(i) At the Closing Date and the Option Closing Date, after giving
effect to the Transactions, the General Partner will own a 1.0101% member
interest in the Operating Company and the Partnership will own a 98.9899% member
interest in the Operating Company; such member interests will have been duly
authorized and validly issued in accordance with the Operating Agreement of the
Operating Company (as the same may be amended and restated at or prior to the
Closing Date, the "Operating Company Agreement") and will be fully paid (to the
extent required under the Operating Company Agreement) and nonassessable (except
as such nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); and the General Partner and the Partnership will own such member interests
free and clear of all liens, encumbrances, security interests, equities, charges
or claims.
(j) At the Closing Date and the Option Closing Date, after giving
effect to the Transactions, Old Services, Xxxxxxxx and Xxxxxx will own member
interests of 70%, 10%, and 7.5%, respectively, in the General Partner; such
member interests will have been duly authorized and validly issued in accordance
with the Operating Agreement of the General Partner (as the same may be amended
and restated at or prior to the Closing Date, the "General Partner Agreement"
and together with the Partnership Agreement and the Operating Company Agreement,
the "Organization Agreements") and will be fully paid (to the extent required
under the General Partner Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the
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Delaware LLC Act); and Old Services will own its member interest free and clear
of all liens, encumbrances, security interests, equities, charges or
claims.
(k) Old Services has been duly formed and is validly existing in good
standing as a limited liability company under the Delaware LLC Act with full
limited liability company power and authority to own or lease its properties to
be owned or leased at the Closing Date, to conduct its business to be conducted
at the Closing Date and to execute and deliver this Agreement and the Operative
Agreements (as defined in Section 6(q)) to which it is a party and perform its
obligations hereunder and thereunder, in each case in all material respects as
described in the Registration Statement and the Prospectus. Old Services is
duly registered or qualified as a foreign limited liability company for the
transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the U.S.
Timberlands Parties, taken as a whole.
(l) At the Closing Date, after giving effect to the Transactions,
Rudey will own a 100% member interest in Old Services; such member interest will
have been duly authorized and validly issued in accordance with the Operating
Agreement of Old Services (as the same may be amended and restated at or prior
to the Closing Date, the "Old Services Agreement") and will be fully paid (to
the extent required under the Old Services Agreement) and nonassessable (except
as such assessability may be affected by Section 18-607 of the Delaware LLC
Act); and Rudey will own such member interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(m) Holdings has been duly formed and is validly existing in good
standing as a limited liability company under the Delaware LLC Act with full
limited liability company power and authority to own or lease its properties to
be owned or leased at the Closing Date, to conduct its business to be conducted
at the Closing Date and to execute and deliver this Agreement and the Operative
Agreements to which it is a party and perform its obligations hereunder and
thereunder, in each case, in all material respects as described in the
Registration Statement and the Prospectus.
-13-
(n) At the Closing Date, Rudey will own a 1% member interest in
Holdings and Rudey Timber Company will own a 99% member interest in Holdings;
such member interests will have been duly authorized and validly issued in
accordance with the Operating Agreement of Holdings (as the same may be amended
and restated at or prior to the Closing Date, the "Holdings Agreement") and will
be fully paid (to the extent required under the Holdings Agreement) and
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act); and Rudey and Rudey Timber Company will own such
member interests free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(o) Except as described in the Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, nor any restriction upon
the voting or transfer of, any limited partner interests in the Partnership or
any member interests in the Operating Company pursuant to either the Partnership
Agreement or the Operating Company Agreement, respectively, or any agreement or
other instrument to which the Partnership or the Operating Company is a party or
by which either of them may be bound. Neither the filing of the Registration
Statement nor the offering or sale of the Units as contemplated by this
Agreement gives rise to any rights for or relating to the registration of any
Units or other securities of the Partnership or the Operating Company. Except
as described in the Prospectus, there are no outstanding options or warrants to
purchase any Common Units or Subordinated Units or other partnership interests
in the Partnership or member interests in the
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Operating Company. The Units, when issued and delivered against payment therefor
as provided herein, and the Subordinated Units, when issued and delivered in
accordance with the terms of the Partnership Agreement and the Contribution
Agreement, will conform in all material respects to the description thereof
contained in the Prospectus. The Partnership has all requisite power and
authority to issue, sell and deliver (i) the Units, in accordance with and upon
the terms and conditions set forth in this Agreement, the Partnership Agreement
and the Registration Statement and Prospectus, and (ii) the Subordinated Units
and Incentive Distribution Rights, in accordance with the terms and conditions
set forth in the Partnership Agreement and the Contribution Agreement. At the
Closing Date and the Option Closing Date, all corporate, partnership and limited
liability company action, as the case may be, required to be taken by the U.S.
Timberlands Entities and Finance Corp. or any of their shareholders, partners or
members for the authorization, issuance, sale and delivery of the Units and the
Subordinated Units and the consummation of the transactions (including the
Transactions) contemplated by this Agreement, the Notes and the Operative
Agreements shall have been validly taken.
(p) The execution and delivery of, and the performance, by each of the
U.S. Timberlands Entities of their respective obligations under, this Agreement
have been duly and validly authorized by each of the U.S. Timberlands Entities,
and this Agreement has been duly executed and delivered by each of the U.S.
Timberlands Entities, and constitutes the valid and legally binding agreement of
each of the U.S. Timberlands Entities, enforceable against each of the U.S.
Timberlands Entities in accordance with its terms, provided that the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws.
(q) At or before the Closing Date, the Partnership Agreement will have
been duly authorized, executed and delivered by the General Partner and will be
a valid and legally binding agreement of the General Partner and the
Organizational Limited Partner, enforceable against the General Partner and the
Organizational Limited Partner in accordance with its terms; at or before the
Closing Date, the Operating Company Agreement will have been duly authorized,
executed and delivered by each of the General Partner and the Partnership and
will be a valid and legally binding agreement of the General Partner and the
Partnership, enforceable against each of them in accordance with its terms; at
or before the Closing Date, the General Partner Agreement will have been duly
authorized, executed and delivered by the parties thereto and will be a valid
and legally binding agreement of each of them enforceable against each of them
in accordance with its terms; at or before the Closing Date, each of the
Conveyance Agreements will have been duly authorized, executed and delivered by
the parties thereto and will be a valid and legally binding agreement of the
parties thereto enforceable against such parties in accordance with its terms;
at or before the Closing Date, a non-competition agreement (the "Non-Competition
Agreement") will have been duly authorized, executed and delivered by each of
the Partnership, the Operating Company, Old Services, Rudey, Stephens,
Holdings, Rudey Timber
-15-
Company and Xxxxxx Properties and will be a valid and legally binding agreement
of each of them enforceable against each of them in accordance with its terms;
at or before the Closing Date, the Bank Credit Agreement will have been duly
authorized, executed and delivered by the Operating Company and will be a valid
and legally binding agreement of the Operating Company enforceable against the
Operating Company in accordance with its terms; at or before the Closing Date,
the Indenture will have been duly authorized, executed and delivered by the
Operating Company and Finance Corp. and the Trustee and will be a valid and
legally binding agreement of the Operating Company and Finance Corp. enforceable
against the Operating Company and Finance Corp. in accordance with its terms and
will be duly qualified under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"); at or before the Closing Date, the Notes will have been
duly authorized for issuance and sale to the underwriters with respect to the
Notes by each of the Operating Company and Finance Corp. and, when issued and
authenticated in accordance with the terms of the Indenture and delivered
against payment therefor in accordance with the terms of the Note Underwriting
Agreement, will constitute valid and binding obligations of the Operating
Company and Finance Corp. enforceable against the Operating Company and Finance
Corp. in accordance with their terms and entitled to the benefits of the
Indenture; provided that, with respect to each agreement described in this
Section 6(q), the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and provided, further, that the indemnity,
contribution and exoneration provisions contained in any of such agreements may
be limited by applicable laws and public policy. The Organization Agreements,
the Conveyance Agreements, the Non-Competition Agreement, the Bank Credit
Agreement, the Indenture and the Notes are herein collectively referred to as
the "Operative Agreements."
(r) None of the offering, issuance and sale by the Partnership of the
Units, the offering, issuance and sale by the Operating Company and Finance
Corp. of the Notes, the execution, delivery and performance of this Agreement,
the Note Underwriting Agreement or the Operative Agreements (other than the
General Partner Agreement) by the U.S. Timberlands Entities which are parties
thereto, or the consummation of the transactions contemplated hereby and thereby
(including the Transactions) (i) conflicts or will conflict with or constitutes
or will constitute a violation of the agreement of limited partnership, limited
liability company operating agreement (other than the General Partner
Agreement), certificate or articles of incorporation or bylaws or other
organizational documents of any of the U.S. Timberlands Entities, (ii) conflicts
or will conflict with or constitutes or will constitute a breach or violation
of, or a default under (or an event which, with notice or lapse of time or both,
would constitute such an event), any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument (other than the General
Partner Agreement) to which any of the U.S. Timberlands Entities is a party or
by which any of them or any of their respective properties may be bound, (iii)
violates or will violate any statute, law or regulation or any order, judgment,
decree or injunction of any court or governmental agency or body directed to any
of the U.S. Timberlands
-16-
Entities or any of their properties in a proceeding to which any of them or
their property is a party, (iv) will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of any of the U.S.
Timberlands Entities, in the case of clauses (ii), (iii) or (iv) which
conflicts, breaches, violations or defaults would have a material adverse effect
upon the condition (financial or other), business, prospects, properties, net
worth or results of operations of the U.S. Timberlands Parties, taken as a
whole.
(s) No permit, consent, approval, authorization or order of any court,
governmental agency or body is required in connection with the execution and
delivery of, or the consummation by the U.S. Timberlands Entities of the
transactions contemplated by, this Agreement, the Note Underwriting Agreement or
the Operative Agreements, except (i) for such permits, consents, approvals and
similar authorizations required under the Securities Act, the Exchange Act, the
Trust Indenture Act and state securities or "Blue Sky" laws, (ii) for such
permits, consents, approvals and similar authorizations which have been, or
prior to the Closing Date will be, obtained, and (iii) for such permits,
consents, approvals and similar authorizations which, if not obtained, would
not, individually or in the aggregate, have a material adverse effect upon the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the U.S. Timberlands Parties, taken as a whole.
(t) None of the U.S. Timberlands Entities is in (i) violation of its
agreement of limited partnership, limited liability company operating agreement,
certificate or articles of incorporation or bylaws or other organizational
documents, or of any law, statute, ordinance, administrative or governmental
rule or regulation applicable to it or of any decree of any court or
governmental agency or body having jurisdiction over it, or (ii) breach, default
(or an event which, with notice or lapse of time or both, would constitute such
an event) or violation in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any agreement, indenture, lease or other instrument to which
it is a party or by which it or any of its properties may be bound, which
breach, default or violation would, if continued, have a material adverse effect
on the condition (financial or other), business, prospects, properties, net
worth or results of operations of the U.S. Timberlands Parties, taken as a
whole, or could materially impair the ability of any of the U.S. Timberlands
Parties to perform its obligations under this Agreement, the Note Underwriting
Agreement, or the Operative Agreements. To the knowledge of the U.S.
Timberlands Entities, no third party to any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which any of the U.S.
Timberlands Parties is a party or by which any of them is bound or to which any
of their properties are subject, is in default under any such agreement, which
breach, default or violation would, if continued, have a material adverse effect
on the condition (financial or other), business, prospects, properties, net
worth or results of operations of the U.S. Timberlands Parties, taken as a
whole.
(u) The accountants, Xxxxxx Xxxxxxxx LLP, who have certified or shall
certify the audited financial statements included in the Registration Statement,
any Prepricing Prospectus and the Prospectus (or any amendment or supplement
thereto) are independent public accountants
-17-
with respect to the U.S. Timberlands Entities as required by the Act and the
applicable published rules and regulations thereunder.
(v) At September 30, 1997, the Partnership would have had, on the
consolidated pro forma basis indicated in the Prospectus (and any amendment or
supplement thereto), a capitalization as set forth therein. The financial
statements (including the related notes and supporting schedules) included in
the Registration Statement, the Prepricing Prospectus dated October 24, 1997 and
the Prospectus (and any amendment or supplement thereto) present fairly in all
material respects the financial position, results of operations and cash flows
of the entities purported to be shown thereby on the basis stated therein at the
respective dates or for the respective periods which have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except to the extent disclosed therein. The
selected historical and pro forma information set forth in the Registration
Statement, the Prepricing Prospectus dated October 24, 1997 and the Prospectus
(and any amendment or supplement thereto) under the caption "Selected Historical
and Pro Forma Financial and Operating Data" is accurately presented in all
material respects and prepared on a basis consistent with the audited and
unaudited historical consolidated financial statements and pro forma financial
statements from which it has been derived. The pro forma financial statements
of the Partnership included in the Registration Statement, the Prepricing
Prospectus dated October 24, 1997 and the Prospectus (and any amendment or
supplement thereto) have been prepared in all material respects in accordance
with the applicable accounting requirements of Article 11 of Regulation S-X of
the Commission; the assumptions used in the preparation of such pro forma
financial statements are, in the opinion of the management of the U.S.
Timberlands Entities, reasonable; and the pro forma adjustments reflected in
such pro forma financial statements have been properly applied to the historical
amounts in compilation of such pro forma financial statements.
(w) Except as disclosed in the Registration Statement, the Prepricing
Prospectus dated October 24, 1997 and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as of which such
information is given in the Registration Statement, the Prepricing Prospectus
dated October 24, 1997 and the Prospectus (or any amendment or supplement
thereto), (i) none of the U.S. Timberlands Entities has incurred any liability
or obligation, indirect, direct or contingent, or entered into any transactions,
not in the ordinary course of business, that, singly or in the aggregate, is
material to the U.S. Timberlands Parties, taken as a whole, (ii) there has not
been any change in the capitalization, or material increase in the short-term
debt or long-term debt, of the U.S. Timberlands Entities and (iii) there has not
been any material adverse change, or any development involving or which may
reasonably be expected to involve, singly or in the aggregate, a prospective
material adverse change, in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the U.S.
Timberlands Parties taken as a whole.
(x) There are no legal or governmental proceedings pending or, to the
knowledge of the U.S. Timberlands Entities, threatened, against any of the U.S.
Timberlands Entities, or to which any of the U.S. Timberlands Entities is a
party, or to which any of their
-18-
respective properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required, and
there are no agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that are not described
or filed as required by the Act.
(y) Old Services and the Operating Company have, and upon
consummation of the Transactions on the Closing Date, the Operating Company will
have, good and marketable title in fee simple to all real property and good
title to all personal property described in the Prospectus to be owned by the
Operating Company, free and clear of all liens, claims, security interests or
other encumbrances except (i) as described in the Prospectus and (ii) such as do
not materially interfere with the use of such properties taken as a whole as
they have been used in the past and are proposed to be used in the future as
described in the Prospectus; and all real property and buildings held under
lease by Old Services and the Operating Company are held by Old Services and the
Operating Company, and upon consummation of the Transactions on the Closing
Date, will be held by the Operating Company, under valid and subsisting and
enforceable leases with such exceptions as do not materially interfere with the
use of such properties taken as a whole as they have been used in the past and
are proposed to be used in the future as described in the Prospectus. The
Conveyance Agreements will be, as of the Closing Date, legally sufficient to
transfer or convey to the Operating Company all properties not already held by
it that are, individually or in the aggregate, required to enable the Operating
Company to conduct its operations (in all material respects as contemplated by
the Prospectus), subject to the conditions, reservations and limitations
contained in the Conveyance Agreements and those set forth in the Prospectus.
The Operating Company will, upon execution and delivery of the Conveyance
Agreements, succeed in all material respects to the business, assets,
properties, liabilities and operations reflected by the pro forma financial
statements of the Partnership, except as disclosed in the Prospectus.
(z) The Partnership has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Units, will not distribute, any prospectus (as defined under the Act) in
connection with the offering and sale of the Units other than the Registration
Statement, any Prepricing Prospectus, the Prospectus or other materials, if any,
permitted by the Act, including Rule 134 of the general rules and regulations
thereunder.
(aa) Each of the U.S. Timberlands Parties has, or at the Closing Date
will have, such permits, consents, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own its
properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the Prospectus
and except for such permits which, if not obtained, would not have, individually
or in the aggregate, a material adverse effect upon the ability of the U.S.
Timberlands Parties considered as a whole to conduct their businesses in all
material respects as currently conducted and as contemplated by the Prospectus
to be conducted; each of the U.S. Timberlands Parties has, or at the Closing
Date will have, fulfilled and performed all its material obligations with
respect to such permits and no event has occurred which allows, or after notice
or lapse of time would allow,
-19-
revocation or termination thereof or results in any impairment of the rights of
the holder of any such permit, except for such revocations, terminations and
impairments that would not have a material adverse effect upon the ability of
the U.S. Timberlands Parties considered as a whole to conduct their businesses
in all material respects as currently conducted and as contemplated by the
Prospectus to be conducted, subject in each case to such qualification as may be
set forth in the Prospectus; and, except as described in the Prospectus, none of
such permits contains any restriction that is materially burdensome to the U.S.
Timberlands Parties considered as a whole.
(bb) Each of the U.S. Timberlands Parties (i) makes and keeps books,
records and accounts, which, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of assets and (ii) maintains systems of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(cc) To the knowledge of the U.S. Timberlands Entities, none of the
U.S. Timberlands Entities nor any employee or agent of any of the U.S.
Timberlands Entities has made any payment of funds of a U.S. Timberlands Entity
or received or retained any funds in either case in violation of any law, rule
or regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(dd) Each of the U.S. Timberlands Entities has filed (or has obtained
extensions with respect to) all material tax returns required to be filed
through the date hereof, which returns are complete and correct in all material
respects, and has timely paid all taxes shown to be due pursuant to such
returns, other than those (i) which, if not paid, would not have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the U.S. Timberlands Entities,
taken as a whole, or (ii) which are being contested in good faith.
(ee) The U.S. Timberlands Entities own or possess, and at the Closing
Date the U.S. Timberlands Parties will own or possess, all patents, trademarks,
trademark registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights owned by them or
necessary for the conduct of their respective businesses, and the U.S.
Timberlands Entities are not aware of any claim to the contrary or any challenge
by any other person to the rights of the U.S. Timberlands Entities with respect
to the foregoing.
-20-
(ff) None of the U.S. Timberlands Parties is now, and after sale of
the Units to be sold by the Partnership hereunder and application of the net
proceeds from such sale as described in the Prospectus under the caption "Use of
Proceeds" will be, (i) an "investment company" or a company "controlled by" an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or (ii) a "public utility company," "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" thereof, under the
Public Utility Holding Company Act of 1935, as amended.
(gg) None of the U.S. Timberlands Entities has sustained since the
date of the latest audited financial statements included in the Prospectus any
material loss or interference with its business from fire, explosion, flood or
other calamity whether or not covered by insurance, or from any labor dispute or
court or governmental action, investigation, order or decree, otherwise than as
set forth or contemplated in the Prospectus.
(hh) None of the U.S. Timberlands Entities has violated any
environmental, safety, health or similar law or regulation applicable to its
business relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), or lacks any permits, licenses or other approvals
required of them under applicable Environmental Laws to own, lease or operate
their properties and conduct their business as described in the Prospectus or is
violating any terms and conditions of any such permit, license or approval,
which in each case would have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the U.S. Timberlands Parties, taken as a whole.
(ii) Except as described in or contemplated by the Prospectus, no
material labor dispute with the employees of any of the U.S. Timberlands
Entities exists or, to the knowledge of any of the U.S. Timberlands Entities, is
imminent.
(jj) The U.S. Timberlands Entities maintain insurance covering their
properties, operations, personnel and businesses against such losses and risks
as are reasonably adequate to protect them and their businesses in a manner
consistent with other businesses similarly situated. None of the U.S.
Timberlands Entities has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will have to
be made in order to continue such insurance; and all such insurance is
outstanding and duly in force on the date hereof and will be outstanding and
duly in force on the Closing Date.
-21-
(kk) Except as described in the Prospectus, there is (i) no action,
suit or proceeding before or by any court, arbitrator or governmental agency,
body or official, domestic or foreign, now pending or, to the knowledge of the
U.S. Timberlands Entities, threatened, to which any of the U.S. Timberlands
Entities, or any of their respective subsidiaries, is or may be a party or to
which the business or property of any of the U.S. Timberlands Entities, or any
of their respective subsidiaries, is or may be subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any governmental
agency or that has been proposed by any governmental body and (iii) no
injunction, restraining order or order of any nature issued by a federal or
state court or foreign court of competent jurisdiction to which any of the U.S.
Timberlands Entities, or any of their respective subsidiaries, is or may be
subject, that, in the case of clauses (i), (ii) and (iii) above, is reasonably
expected to (A) singly or in the aggregate have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the U.S. Timberlands Parties, taken as a whole, (B)
prevent or result in the suspension of the offering and issuance of the Units or
the Notes or (C) in any manner draw into question the validity of this
Agreement, the Note Underwriting Agreement or any Operative Agreement.
(ll) The issuance of the Subordinated Units to each of the General
Partner and Holdings pursuant to the Contribution Agreement and the Partnership
Agreement, the distribution of Subordinated Units by the General Partner to Old
Services and the distribution by Old Services of certain of such Subordinated
Units to each of Messrs. Xxxxxxxx and Xxxxxx is exempt from the registration
requirements of the Act and the securities laws of any state having jurisdiction
with respect thereto, and none of the U.S. Timberlands Entities has taken or
will take any action that would cause the loss of such exemption.
(mm) The Units have been approved for listing on the Nasdaq National
Market, subject only to official notice of issuance.
7. Indemnification and Contribution. (a) Each of the U.S. Timberlands
--------------------------------
Entities, jointly and severally, agree to indemnify and hold harmless each of
you and each other Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or
-22-
omitted therefrom in reliance upon and in conformity with the information
furnished in writing to the Partnership or the General Partner by or on behalf
of any Underwriter through you expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a) with
respect to any Prepricing Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Units by such Underwriter to any person if a copy of the Prospectus
shall not have been delivered or sent to such person within the time required by
the Act and the regulations thereunder, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
such Prepricing Prospectus was corrected in the Prospectus, provided that the
Partnership has delivered the Prospectus to the several Underwriters in
requisite quantity and on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability which any
U.S. Timberlands Entity may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against a U.S. Timberlands Entity, such Underwriter or
such controlling person shall promptly notify the U.S. Timberlands Entities in
writing, and the Partnership shall assume the defense thereof, including the
employment of counsel and payment of all reasonable fees and expenses. The
failure to notify the indemnifying party shall not relieve it from liability
which it may have to an indemnified party unless the indemnifying party is
foreclosed by reason of such delay from asserting a defense otherwise available
to it. Such Underwriter or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding and to
participate in (but not control) the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) a U.S. Timberlands Entity has agreed in writing to pay such
fees and expenses, (ii) the U.S. Timberlands Entities have failed to assume the
defense and employ counsel or (iii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include both such Underwriter or
such controlling person and a U.S. Timberlands Entity, and such Underwriter or
such controlling person shall have been advised by its counsel that
representation of such indemnified party and such U.S. Timberlands Entity by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the U.S. Timberlands Entities shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the U.S. Timberlands
Entities shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Underwriters and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. None of the U.S. Timberlands Entities shall be
liable for any settlement of any such action, suit or proceeding effected
without its written consent, but if settled with such written consent, or if
there be a final
-23-
judgment for the plaintiff in any such action, suit or proceeding, the U.S.
Timberlands Entities agree, jointly and severally, to indemnify and hold
harmless any Underwriter, to the extent provided in the preceding paragraph, and
any such controlling person from and against any loss, claim, damage, liability
or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the U.S. Timberlands Entities, their respective directors and
officers who sign the Registration Statement, and any person who controls the
U.S. Timberlands Entities within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, to the same extent as the foregoing indemnity from the
U.S. Timberlands Entities to each Underwriter, but only with respect to
information furnished in writing by or on behalf of such Underwriter through you
expressly for use in the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto. If any action,
suit or proceeding shall be brought against a U.S. Timberlands Entity, any of
such directors and officers or any such controlling person based on the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph (c), such Underwriter shall
have the rights and duties given to the U.S. Timberlands Entities by paragraph
(b) above (except that if a U.S. Timberlands Entity shall have assumed the
defense thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in (but not control) the defense
thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense), and the U.S. Timberlands Entities, any of such directors
and officers and any such controlling person shall have the rights and duties
given to the Underwriters by paragraph (b) above. The foregoing indemnity
agreement shall be in addition to any liability which the Underwriters may
otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraph (a) or (c) hereof in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then an indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
U.S. Timberlands Entities on the one hand and the Underwriters on the other hand
from the offering of the Units, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the U.S. Timberlands Entities on the one hand and the
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the U.S. Timberlands Entities on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the U.S. Timberlands Entities
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the U.S. Timberlands Entities on the one
hand, and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue
-24-
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the U.S. Timberlands Entities
or any other affiliate of the U.S. Timberlands Entities on the one hand, or by
the Underwriters on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The U.S. Timberlands Entities and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by a pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Units underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective numbers of Firm Units set forth opposite their
names in Schedule I hereto (or such numbers of Firm Units increased as set forth
in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the U.S. Timberlands Entities set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the U.S. Timberlands Entities or any of their
respective directors or officers or any person controlling the U.S. Timberlands
Entities, (ii) acceptance of any Units and payment therefor in accordance with
the terms of this Agreement, and (iii) any termination of this Agreement. A
successor to any Underwriter or any person controlling any Underwriter, or to
the U.S. Timberlands Entities or any of their respective directors or officers
-25-
or any person controlling a U.S. Timberlands Entity shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 7.
8. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters to purchase the Firm Units hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Units may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall be or have
been timely made, as the case may be; no stop order suspending the effectiveness
of the registration statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the U.S. Timberlands
Entities or any Underwriter, threatened by the Commission and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to your
reasonable satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business, prospects,
properties, net worth or results of operations of any of the U.S. Timberlands
Entities not contemplated by the Prospectus, which in your opinion, as
Representatives of the several Underwriters, would materially adversely affect
the market for the Units, or (ii) any event or development relating to or
involving any of the U.S. Timberlands Entities or any executive officer or
director of any of such entities which makes any statement made in the
Prospectus untrue or which, in the opinion of the Partnership and its counsel or
the Underwriters and their counsel, requires the making of any addition to or
change in the Prospectus in order to state a material fact required by the Act
or any other law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the Prospectus
to reflect such event or development would, in your opinion, as Representatives
of the several Underwriters, materially adversely affect the market for the
Units.
(c) You shall have received on the Closing Date, an opinion of Xxxxxxx
& Xxxxx L.L.P., special counsel for the U.S. Timberlands Entities, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) The Partnership has been duly formed and is validly
existing in good standing as a limited partnership under the Delaware LP
Act with all necessary partnership power and authority to own or lease its
properties, assume the liabilities being assumed by it pursuant to the
Conveyance Agreements and conduct its business, in each case in all
material respects as described in the Registration Statement and the
Prospectus;
-26-
(ii) The Partnership is duly registered or qualified as a
foreign limited partnership for the transaction of business under the laws
of the State of Oregon; and, to such counsel's knowledge, such jurisdiction
is the only jurisdiction in which the character of the business conducted
by the Partnership or the nature or location of the properties owned or
leased by it make such registration or qualification necessary (except
where the failure to so register or so qualify would not (A) have a
material adverse effect on the condition (financial or other), business or
results of operations of the Partnership and the Operating Company, taken
as a whole, or (B) subject the limited partners of the Partnership to any
material liability or disability);
(iii) The Operating Company has been duly formed and is validly
existing in good standing as a limited liability company under the Delaware
LLC Act with all necessary limited liability company power and authority to
own or lease its properties, assume the liabilities being assumed by it
pursuant to the Conveyance Agreements and conduct its business, in each
case in all material respects as described in the Registration Statement
and the Prospectus;
(iv) The Operating Company is duly registered or qualified as a
foreign limited liability company for the transaction of business under the
laws of the State of Oregon; and, to such counsel's knowledge, such
jurisdiction is the only jurisdiction in which the character of the
business conducted by the Operating Company or the nature or location of
the properties owned or leased by it make such registration or
qualification necessary (except where the failure to so register or so
qualify would not (A) have a material adverse effect on the condition
(financial or other), business or results of operations of the Partnership
and the Operating Company, taken as a whole, or (B) subject the limited
partners of the Partnership to any material liability or disability);
(v) The General Partner has been duly formed and is validly
existing in good standing as a limited liability company under the Delaware
LLC Act, with all necessary limited liability company power and authority
to own or lease its properties, to conduct its business and to act as
general partner of the Partnership and as managing member of the Operating
Company, in each case in all material respects as described in the
Prospectus;
(vi) The General Partner is duly registered or qualified as a
foreign limited liability company for the transaction of business under the
laws of the States of New York and Oregon; and to such counsel's knowledge,
such jurisdictions are the only jurisdictions in which the character of the
business conducted by the General Partner or the nature or location of the
properties owned or leased by it make such registration or qualification
necessary (except where the failure to so register or so qualify would not
(A) have a material adverse effect on the condition (financial or other),
business or results of operations of the U.S. Timberlands Parties, taken as
a whole, or (B) subject the limited partners of the Partnership to any
material liability or disability);
-27-
(vii) The General Partner is the sole general partner of the
Partnership, with a 1% general partner interest in the Partnership; such
general partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement; the General Partner owns all of
the Incentive Distribution Rights; such Incentive Distribution Rights have
been duly authorized and validly issued in accordance with the Partnership
Agreement and are fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in the Prospectus under the caption "The
Partnership Agreement--Limited Liability"); and the General Partner owns
such general partner interest and Incentive Distribution Rights free and
clear of all liens, encumbrances, security interests, charges or claims (A)
in respect of which a financing statement under the Uniform Commercial Code
of the State of New York or the State of Oregon naming the General Partner
as debtor is on file in the office of the Secretary of State of the
applicable jurisdiction or (B) otherwise known to such counsel, without
independent investigation, other than those created by or arising under the
Delaware LP Act;
-28-
(viii) The 1,387,963 and 2,894,157 Subordinated Units issued to
the General Partner and Holdings, respectively, pursuant to the Contribution
Agreement and the Partnership Agreement and the limited partner interests
represented thereby have been duly authorized and validly issued in accordance
with the Partnership Agreement and are fully paid (to the extent required under
the Partnership Agreement) and nonassessable (except as such nonassessability
may be affected by matters described in the Prospectus under "The Partnership
Agreement--Limited Liability"); after giving effect to the Transactions,
Holdings, Old Services, Xx. Xxxxxxxx and Xx. Xxxxxx will own 2,894,157,
1,244,565, 95,238 and 48,160 Subordinated Units, respectively; and Holdings and
Old Services will own their respective Subordinated Units free and clear of all
liens, encumbrances, security interests, charges or claims (A) in respect of
which a financing statement under the Uniform Commercial Code of, in the case of
Old Services, the State of Oregon, and in the case of Holdings, the State of New
York, naming any such owner as debtor is on file in the office of the Secretary
of State of the applicable jurisdiction or (B) otherwise known to such counsel,
without independent investigation, other than (1) those created by or arising
under the Delaware LP Act and (2) as provided in the Rudey Pledge Agreement;
(ix) The 7,458,684 Common Units to be issued and sold to the
Underwriters by the Partnership pursuant to the Underwriting Agreement
and the limited partner interests represented thereby have been duly
authorized by the Partnership Agreement and, when issued and delivered
against payment therefor as provided in the Underwriting Agreement,
will be validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the
Prospectus under the caption "The Partnership Agreement--Limited
Liability"); other than the Subordinated Units that will be owned by
Holdings, Old Services, Xx. Xxxxxxxx and Xx. Xxxxxx and the Incentive
Distribution Rights that will be owned by the General Partner, the
Units will be the only limited partner interests of the Partnership
issued and outstanding at the Closing Date;
(x) The General Partner owns a 1.0101% member interest in the
Operating Company and the Partnership owns a 98.9899% member interest
in the Operating Company; such member interests have been duly
authorized and validly issued in accordance with the Operating Company
Agreement and
-29-
are fully paid (to the extent required under the Operating Company
Agreement) and nonassessable (except as such nonassessability may be
affected by Section 18-607 of the Delaware LLC Act); and the General
Partner and the Partnership own such member interests free and clear of all
liens, encumbrances, security interests, charges or claims (A) in respect
of which a financing statement under the Uniform Commercial Code of, in the
case of the General Partner, the State of New York or the State of Oregon,
naming the General Partner and in the case of the Partnership, the State of
Oregon, naming the Partnership, as debtor is on file in the office of the
Secretary of State of the applicable jurisdiction or (B) otherwise known to
such counsel, without independent investigation, other than those created
by or arising under the
DELAWARE LLC ACT;
(xi) Old Services, Xxxxxxxx and Xxxxxx own member interests of
70%, 10% and 7.5%, respectively, in the General Partner; such member
interests have been duly authorized and validly issued in accordance with
the General Partner Agreement and are fully paid (to the extent required
under the General Partner Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); and the member interests of Old Services are owned free and clear of
all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial Code of
the State of Oregon naming Old Services as debtor is on file in the office
of the Secretary of State of the State of Oregon, or (B) otherwise known to
such counsel, without independent investigation, other than those created
by or arising under the Delaware LLC Act;
(xii) Each of Old Services, Holdings and Rudey Timber Company
has been duly formed and is validly existing in good standing as a limited
liability company under the Delaware LLC Act with all necessary limited
liability company power and authority to own or lease its properties, to
conduct its business and to execute and deliver this Agreement and the
Operative Agreements to which it is a party and perform its obligations
hereunder and thereunder, in each case in all material respects as
described in the Registration Statement and the Prospectus;
(xiii) Old Services is duly registered or qualified as a foreign
limited liability company under the laws of the State of Oregon; and to
such counsel's knowledge, Oregon is the only jurisdiction in which the
character of the business conducted by Old Services or the nature or
location of the properties owned or leased by it make such registration or
qualification necessary (except where the failure to so register or so
qualify would not have a material adverse effect on the condition
(financial or other), business or results of operations of the U.S.
Timberlands Parties taken as a whole;
-30-
(xiv) Upon the redemption of Xxxxxxxx' and Xxxxxx'x member
interests in Old Services, Rudey will own a 100% member interest in Old
Services; such member interest has been duly authorized and validly issued
in accordance with the Old Services Agreement and is fully paid (to the
extent required under the Old Services Agreement) and nonassessable (except
as such nonassessability may be affected by Section 18-607 of the Delaware
LLC Act); Rudey owns his member interest free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which
a financing statement under the Uniform Commercial Code of the State of New
York naming him as debtor is on file in the office of the Secretary of
State of the State of New York or (B) otherwise known to such counsel,
without independent investigation, other than those created by or arising
under the Delaware LLC Act;
(xv) Rudey and Rudey Timber Company own 1% and 99% member
interests, respectively, in Holdings; such member interests have been duly
authorized and validly issued in accordance with the Holdings Agreement and
are fully paid (to the extent required under the Holdings Agreement) and
nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and each of Rudey and Rudey Timber Company
owns such respective member interests free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which
a financing statement under the Uniform Commercial Code of, in the case of
Rudey, the State of New York, and in the case of Rudey Timber Company, the
State of Delaware, naming Rudey or Rudey Timber Company, as applicable, as
debtor is on file in the office of the Secretary of State of the applicable
jurisdiction or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the Delaware
LLC Act;
(xvi) Rudey and Xxxxxx Holdings own 99% and 1% member interests,
respectively, in Rudey Timber Company; such member interests have been duly
authorized and validly issued in accordance with the Operating Agreement of
Rudey Timber Company (the "Rudey Timber Company Agreement") and are fully
paid (to the extent required under the Rudey Timber Company Agreement) and
nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and each of Rudey and Xxxxxx Holdings owns
such respective member interests free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the State of New York,
naming Rudey or Xxxxxx Holdings as debtor is on file in the office of the
Secretary of State of the State of New York or (B) otherwise known to such
counsel, without independent investigation, other than (1) those created by
or arising under the Delaware LLC Act or (2) as provided in the Rudey
Pledge Agreement;
(xvii) Except as described in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any limited partner interests
in the Partnership or member interests in the Operating
-31-
Company pursuant to the Partnership Agreement, the Operating Company
Agreement or any other agreement or instrument known to such counsel to
which the Partnership or the Operating Company is a party or by which
either of them may be bound. To such counsel's knowledge, neither the
filing of the Registration Statement nor the offering or sale of the Units
as contemplated by this Agreement gives rise to any rights for or relating
to the registration of any Units or other securities of the Partnership or
the Operating Company. To such counsel's knowledge, except as described in
the Prospectus, there are no outstanding options or warrants to purchase
any Common Units or Subordinated Units or other partnership interests in
the Partnership or member interests in the Operating Company. The
Partnership has all requisite power and authority to issue, sell and
deliver (A) the Units, in accordance with and upon the terms and conditions
set forth in this Agreement, the Partnership Agreement and the Registration
Statement and Prospectus, and (B) the Subordinated Units and Incentive
Distribution Rights, in accordance with the terms and conditions set forth
in the Partnership Agreement and the Contribution Agreement;
(xviii) This Agreement has been duly authorized and validly
executed and delivered by each of the U.S. Timberlands Entities;
(xix) Each of the Operative Agreements (excluding the General
Partner Agreement) to which any of the U.S. Timberlands Entities is a party
have been duly authorized and validly executed and delivered by the U.S.
Timberlands Entities parties thereto and constitutes a valid and binding
obligation of the U.S. Timberlands Entities parties thereto, enforceable
against each such party in accordance with its respective terms, subject to
(A) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws from time to time in effect affecting creditors'
rights and remedies generally and general principles of equity (regardless
of whether such principles are considered in a proceeding at law or in
equity) and (B) public policy, applicable law relating to fiduciary duties
and an implied covenant of good faith and fair dealing;
(xx) None of the offering, issuance and sale by the Partnership
of the Units, the offering, issuance and sale by the Operating Company and
Finance Corp. of the Notes, the execution, delivery and performance of this
Agreement, the Note Underwriting Agreement or the Operative Agreements
(other than the General Partner Agreement) by the U.S. Timberlands Entities
party thereto, or the consummation of the transactions contemplated hereby
and thereby (including the Transactions) (A) constitutes or will constitute
a violation of the agreement of limited partnership, limited liability
company operating agreement (other than the General Partner Agreement),
certificate or articles of incorporation or bylaws or other organizational
documents of any of the U.S. Timberlands Entities, Rudey Timber Company or
Finance Corp., (B) constitutes or will constitute a breach or violation of,
or a default under (or an event which, with notice or lapse of time or
both, would constitute such
-32-
an event), any Operative Agreement (other than the General Partner
Agreement) or any other agreement filed as an exhibit to the Registration
Statement, (C) results or will result in any violation of the Delaware LP
Act, the Delaware LLC Act or the Delaware General Corporation Law ("DGCL"),
or (D) results or will result in the creation of imposition of any lien,
charge or encumbrance upon any property or assets of any of the U.S.
Timberlands Entities, Rudey Timber Company or Finance Corp., which in the
case of clauses (B), (C) or (D) would reasonably be expected to have a
material adverse effect on the financial condition, business or results of
operations of the U.S. Timberlands Parties and Finance Corp., taken as a
whole;
(xxi) No permit, consent, approval, authorization or order of
any Federal or Delaware court, governmental agency or body is required in
connection with the execution and delivery of, or the consummation by the
U.S. Timberlands Entities and Finance Corp. of the transactions
contemplated by, this Agreement, the Note Underwriting Agreement or the
Operative Agreements, except (A) for such permits, consents, approvals and
similar authorizations required under the Securities Act, the Exchange Act,
and the Trust Indenture Act, (B) for such permits consents, approvals and
similar authorizations required under state securities or "Blue Sky" laws,
as to which such counsel need not express any opinion and (C) as described
in the Prospectus;
(XXII) To the knowledge of such counsel, none of the Operating
Company, Old Services, Holdings or Rudey Timber Company is in (A) breach or
violation of the provisions of its limited liability company operating
agreement or other organizational documents or (B) default (and no event
has occurred which, with notice or lapse of time or both, would constitute
such a default) in the due performance of any term, covenant or condition
contained in the Existing Credit Agreement which would reasonably be
expected to have a material adverse effect on the financial condition,
business or results of operations of the U.S. Timberland Parties taken as a
whole, or could impair the ability of the Operating Company, Old Services,
Holdings or Rudey Timber Company to perform their obligations under the
Operative Agreements;
(xxiii) The statements in the Registration Statement and
Prospectus under the captions "The Transactions," "Cash Distribution
Policy," "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Description of Indebtedness," "Business and
Properties--Federal and State Regulation," "Certain Relationships and
Related Transactions--Contribution, Conveyance and Assumption Agreement,"
"Conflicts of Interest and Fiduciary Responsibilities," "Description of the
Common Units" and "The Partnership Agreement," insofar as they constitute
descriptions of the Operative Agreements or refer to statements of law or
legal conclusions, are accurate and complete in all material respects, and
the Units, the Subordinated Units and the Incentive Distribution Rights
conform in all material respects to the descriptions thereof contained in
the Registration Statement and Prospectus under the captions
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"Prospectus Summary--The Offering," "Cash Distribution Policy,"
"Description of the Common Units" and "The Partnership Agreement";
(xxiv) The opinion of Xxxxxxx & Xxxxx L.L.P. that is filed as
Exhibit 8.1 to the Registration Statement is confirmed and the Underwriters
may rely upon such opinion as if it were addressed to them;
(xxv) The Registration Statement was declared effective under
the Act on November 12, 1997; to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
threatened by the Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in the manner and within the time
period required by such Rule;
(xxvi) The Registration Statement and the Prospectus (except for
the financial statements and the notes and the schedules thereto and the
other financial, statistical and accounting data included in the
Registration Statement or the Prospectus, as to which such counsel need not
express any opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations promulgated
thereunder;
(xxvii) To the knowledge of such counsel, (A) there is no legal
or governmental proceeding pending or threatened to which any of the U.S.
Timberlands Entities is a party or to which any of their respective
properties is subject that is required to be disclosed in the Prospectus
and is not so disclosed and (B) there are no agreements, contracts or other
documents to which any of the U.S. Timberlands Entities is a party that are
required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are not
described or filed as required;
(xxviii) None of the U.S. Timberlands Parties is an "investment
company" or a company "controlled by" an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended;
(xxix) Upon delivery to the Underwriters of certificates
evidencing the Units issued in the name of the Underwriters and payment by
the Underwriters of the purchase price for the Units, the Underwriters will
acquire the Units free of any adverse claim (as such term is defined in
Section 8-302 of the New York Uniform Commercial Code), assuming that the
Underwriters are acting in good faith and without notice of any adverse
claim;
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(xxx) The Common Units have been approved for listing on the
Nasdaq National Market, subject only to official notice of issuance;
and
(xxxi) The offer, sale and issuance of the Subordinated Units
to each of the General Partner and Holdings pursuant to the Contribution
Agreement and the Partnership Agreement, the distribution of Subordinated
Units by the General Partner to Old Services and the distribution by Old
Services of certain of such Subordinated Units to each of Messrs. Xxxxxxxx
and Xxxxxx is exempt from the registration requirements of the Act and the
securities laws of any state having jurisdiction with respect thereto.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the U.S. Timberlands
Entities and the independent public accountants of the Partnership and your
representatives, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although such counsel has not
independently verified, is not passing on, and is not assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Registration Statement and the Prospectus (except to the
extent specified in the foregoing opinion), no facts have come to such counsel's
attention that lead such counsel to believe that the Registration Statement
(other than (i) the financial statements included therein, including the notes
and schedules thereto and the auditors' reports thereon, (ii) the other
historical, pro forma and projected financial information and the statistical
and accounting information included therein and (iii) the exhibits thereto, as
to which such counsel need not comment), as of its effective date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus (other than (i) the financial statements included
therein, including the notes and schedules thereto and the auditors' reports
thereon, and (ii) the other historical, pro forma and projected financial
information and the statistical and accounting information included therein, as
to which such counsel need not comment), as of its issue date and the Closing
Date contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the U.S.
Timberlands Entities and upon information obtained from public officials, (B)
assume that all documents submitted to them as originals are authentic, that all
copies submitted to them conform to the originals thereof, and that the
signatures on all documents examined by them are genuine, (C) state that their
opinion is limited to federal laws, the Delaware LP Act, the Delaware LLC Act,
the DGCL and the laws of the State of New York, (D) with respect to the opinions
expressed in paragraphs (ii), (iv) (vi) and (xiii) above as to the due
qualification or registration as a foreign limited partnership or limited
liability company, as the case may be, of each of the U.S. Timberlands Entities,
state that such opinions are based upon the opinion of Lindsay, Xxxx, Xxxx &
Xxxxxxx, LLP provided pursuant to (e) below and upon certificates of foreign
qualification or registration provided by the Secretary of State of the State of
Oregon (each of which shall be dated as of a date not more than fourteen days
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prior to the Closing Date and shall be provided to you), (E) with respect to the
opinion expressed in paragraph (xxiii) above as to the section of the
Registration Statement and the Prospectus captioned "Business and Properties--
Federal and State Regulation" as to the laws of the State of Oregon, state that
such opinion is based upon the opinion of Xxxxxx X. Xxxxxxxxx & Associates,
P.C., provided pursuant to (f) below, (F) state that they express no opinion
with respect to the title of any of the U.S. Timberlands Entities to any of
their respective real or personal property and (G) state that they express no
opinion with respect to state or local taxes or tax statutes to which any of the
limited partners of the Partnership or any of the U.S. Timberlands Parties may
be subject.
(d) You shall have received on the Closing Date, a copy of the
opinion of Xxxxxxx & Xxxxx L.L.P. delivered pursuant to the Note Underwriting
Agreement, substantially in the form provided for therein, accompanied by a
letter dated the Closing Date and addressed to you from such counsel stating
that you are entitled to rely on such opinion as if it were addressed to you.
(e) You shall have received on the Closing Date, an opinion of
Lindsay, Xxxx, Xxxx & Xxxxxxx, LLP, counsel for the U.S. Timberlands Entities,
dated the Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) Each of the U.S. Timberlands Entities
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foreign limited partnership, as applicable, under the laws of the State of
Oregon;
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(ii) None of the offering, issuance and sale by the Partnership of
the Units, the offering, issuance and sale by the Operating Company and Finance
Corp. of the Notes, the execution, delivery and performance of this Agreement,
the Note Underwriting Agreement or the Operative Agreements by the U.S.
Timberlands Entities which are parties thereto, nor the consummation of the
transactions contemplated hereby and thereby (including the Transactions) (A)
constitutes or will constitute a breach or violation of, or a default under (or
an event which, with notice or lapse of time or both, would constitute such an
event), any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel (other than the Operative
Agreements and any other agreement filed as an exhibit to the Registration
Statement) to which any of the U.S. Timberlands Entities is a party or by which
any of them or any of their properties may be bound or (B) results or will
result in any violation of any statute, law or regulation of the State of Oregon
or any order, judgment, decree or injunction of any court or governmental agency
or body, in each case, known to such counsel and directed to any of the U.S.
Timberlands Entities or Rudey Timber Company or any of their properties in a
proceeding to which any of them or their property is subject, which in either
case would reasonably be expected to have a material adverse effect on the
financial condition, business or results of operations of the U.S. Timberlands
Parties, take as a whole;
(iii) No permit, consent, approval or authorization or order of any
Oregon court, governmental agency or body is required in connection with
the execution and
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delivery of, or the consummation by the U.S. Timberlands Entities of the
transactions contemplated by, this Agreement, the Note Underwriting
Agreement or the Operative Agreements, except (A) as may be required under
state securities or "Blue Sky" laws, as to which such counsel need not
express any opinion, (B) for such permits, consents, approvals and similar
authorizations which have been obtained, and (C) for such permits,
consents, approvals and similar authorizations which, if not obtained,
would not, individually or in the aggregate, have a material adverse effect
upon the condition (financial or other), business, prospects, properties,
net worth or results of operations of the U.S. Timberlands Parties, taken
as a whole.
(iv) To the knowledge of such counsel, none of the Operating
Company, Old Services, Holdings or Rudey Timber Company is in default (and
no event has occurred which, with notice or lapse of time or both, would
constitute such a default) in the due performance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties are subject (other than
the Existing Credit Agreement, with respect to which such counsel need not
express an opinion), which would reasonably be expected to have a material
adverse effect on the financial condition, business or results of
operations of the U.S. Timberlands Parties, taken as a whole, or could
impair the ability of the Operating Company, Old Services, Holdings or
Rudey Timber Company to perform their obligations under the Operative
Agreements; and
(v) To the knowledge of such counsel after due inquiry, other
than as described or contemplated in the Prospectus (or any supplement
thereto), there is no litigation, proceeding or governmental investigation
pending or threatened against any of the U.S. Timberlands Entities or to
which any of the U.S. Timberlands Entities is a party or to which any of
their respective properties is subject, that relates to any of the
Transactions or which, if adversely determined, would reasonably be
expected to have a material adverse effect on the condition (financial or
other), business or results of operations of the U.S. Timberlands Parties,
taken as a whole, or would impair or call into question the validity of
this Agreement, the performance by any of the U.S. Timberlands Entities or
Finance Corp. of their obligations under this Agreement, the Note
Underwriting Agreement or the Operative Agreements;
(vi) Except as described in the Prospectus, to the knowledge of
such counsel, each of the U.S. Timberlands Parties possess all permits,
consents, licenses, franchises and authorizations issued by the appropriate
local, state or federal regulatory agencies or bodies necessary to conduct
the business currently (or, as described or contemplated in the Prospectus,
to be) operated by them, except for such permits, consents, licenses,
franchises and authorizations which, if not obtained, would not reasonably
be expected to have, individually or in the aggregate, a material adverse
effect upon the
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financial condition, business or results of operations of the U.S.
Timberlands Parties, taken as a whole; and, to the knowledge of such
counsel, none of the U.S. Timberlands Parties has received any notice of
proceedings relating to the revocation or modification of any such permits,
consents, licenses, franchises and authorizations which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to have a material adverse effect
upon the financial condition, business or results of operations of the U.S.
Timberlands Parties, taken as a whole.
(vii) The Operating Company has all requisite power and
authority as a limited liability company under the laws of the State of
Oregon to own or lease its properties and to conduct its business in the
State of Oregon; and upon the consummation of the Transactions, assuming
that the Partnership will not be liable under the laws of the State of
Delaware for the liabilities of the Operating Company and that the
Unitholders will not be liable under the laws of the State of Delaware for
liabilities of the Partnership or the Operating Company, the Partnership
will not be liable under the laws of the State of Oregon for the
liabilities of the Operating Company, and the Unitholders will not be
liable under the laws of the State of Oregon for the liabilities of the
Partnership or the Operating Company, except in each case to the same
extent as under the laws of the State of Delaware;
(viii) Each of the Conveyance Agreements, assuming the due
authorization, execution and delivery thereof by the parties thereto, to
the extent it is a valid and legally binding agreement under the applicable
law as stated therein and that such law applies thereto, is a valid and
legally binding agreement of the parties thereto under the laws of the
State of Oregon, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general application relating to or affecting creditors'
rights generally and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law);
each of the Conveyance Agreements is in a form legally sufficient as
between the parties thereto to convey to the transferee thereunder all of
the right, title and interest of the transferor stated therein in and to
the properties located in the State of Oregon, as described in the
Conveyance Agreements, subject to the conditions, reservations and
limitations contained in the Conveyance Agreements, except motor vehicles
or other property requiring conveyance of certificated title as to which
the Conveyance Agreements are legally sufficient to compel delivery of such
certificated title; and
(ix) Each of the deeds and assignments (including, without
limitation, the form of the exhibits and schedules thereto) is in a form
legally sufficient for recordation in the appropriate public offices of the
State of Oregon, to the extent such recordation is required, and, upon
proper recordation of any of such deeds and assignments in the State of
Oregon, will constitute notice to all third parties under the recordation
statutes of the State of Oregon concerning record title to the assets
transferred thereby; recordation in the office of the County Clerk for each
county in which the Operating Company owns
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property is the appropriate public office in the State of Oregon for the
recordation of deeds and assignments of interests in real property located
in such county.
In rendering such opinion, such counsel may (A) rely in respect of matters
of fact upon certificates of officers and employees of the U.S. Timberlands
Entities and upon information obtained from public officials, (B) assume that
all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures on
all documents examined by them are genuine, (C) state that such opinions are
limited to federal laws and the laws of the State of Oregon, excepting therefrom
municipal and local ordinances and regulations, (D) state that they express no
opinion with respect to state or local taxes or tax statutes, and (E) state that
they (1) express no opinion with respect to the title of any of the real or
personal property purported to be transferred by the Conveyance Agreements, (2)
have not made any review of specific properties or facilities or title files
relating to any such properties and (3) express no opinion regarding the
accuracy of the description or references to any real or personal property.
(f) You shall have received on the Closing Date an opinion of
Xxxxxx X. Xxxxxxxxx & Associates, P.C., counsel for the U.S. Timberland
Entities, dated the Closing Date and addressed to you, as Representatives of the
several Underwriters, to the effect that the statements in the Registration
Statement and Prospectus under the caption "Business and Properties--Federal and
State Regulation," insofar as they refer to statements of law or legal
conclusions, are accurate and complete in all material respects.
In rendering such opinion, such counsel may state that their opinion is
limited to federal laws and the laws of the State of Oregon, excepting therefrom
municipal and local ordinances and regulations.
(g) You shall have received on the Closing Date an opinion of Xxxxx &
Xxxxx, L.L.P., counsel for the Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, with respect
to the issuance and sale of the Common Units, the Registration Statement and the
Prospectus (together with any supplement or amendment thereto).
(h) You shall have received a letter addressed to you and dated on or
prior to the date hereof from Xxxxx, Xxxxx & Xxxxxx, Inc. substantially in the
form heretofore approved by you.
(i) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Xxxxxx Xxxxxxxx LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.
(j) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or taken or, to
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the knowledge of the Partnership and the General Partner, shall be threatened by
the Commission at or prior to the Closing Date; (ii) there shall not have been
any change in the partners' capital or member's equity of the Partnership, the
Operating Company or the General Partner, as the case may be, nor any material
increase in the short-term or the long-term debt of the Partnership, the
Operating Company, the General Partner or Old Services (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), any material adverse change in or affecting the condition (financial
or other), business, prospects, properties, net worth or results of operations
of the U.S. Timberlands Parties and Old Services, taken as a whole; (iv) the
U.S. Timberlands Parties and Old Services shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the U.S. Timberlands Parties taken as a whole
other than those reflected in the Registration Statement or the Prospectus (or
any amendment or supplement thereto); and (v) all the representations and
warranties of the U.S. Timberlands Entities contained in this Agreement shall be
true and correct on and as of the date hereof and on and as of the Closing Date
as if made on and as of the Closing Date.
(k) The U.S. Timberlands Entities shall not have failed at or
prior to the Closing Date to have performed or complied in all material respects
with any of their agreements herein contained and required to be performed or
complied with by them hereunder at or prior to the Closing Date.
(l) The Units shall have been approved for listing upon notice
of issuance on the Nasdaq National Market.
(m) The Partnership shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
reasonably requested.
(n) Prior to or simultaneously with the sale of the Units on
the Closing Date, (i) the conveyance of the Transferred Assets to the Operating
Company shall have been consummated, (ii) the closing of the offering of the
Notes shall have occurred on the basis set forth in the Prospectus and the Note
Underwriting Agreement and (iii) the Bank Credit Agreement shall have been
executed and delivered and become effective in substantially the form filed as
an exhibit to the Registration Statement.
(o) On or prior to the date hereof, the Partnership shall have
furnished to you a letter substantially in the form of Exhibit A hereto from
each officer and each director of each U.S. Timberland Entity.
(p) There shall have been furnished to you at the Closing Date
a certificate satisfactory to you, signed on behalf of the General Partner by
the President or the Executive Vice
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President and the Chief Financial Officer thereof to the effect that: (A) the
representations and warranties of each of the U.S. Timberlands Parties contained
in this Agreement are true and correct at and as of the Closing Date as though
made at and as of the Closing Date; (B) each of the U.S. Timberlands Parties has
in all material respects performed all obligations required to be performed by
it pursuant to the terms of this Agreement at or prior to the Closing Date; (C)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been instituted or taken or,
to the knowledge of any of the U.S. Timberlands Parties, threatened by the
Commission, and all requests for additional information on the part of the
Commission have been complied with or otherwise satisfied; (D) the Common Units
have been duly approved for listing, subject to official notice of issuance, on
the Nasdaq National Market; and (E) no event contemplated by subsection (j) of
this Section 8 in respect of the Partnership, the Operating Company or the
General Partner shall have occurred.
(q) There shall have been furnished to you at the Closing
Date, certificates reasonably satisfactory to you, signed on behalf of each of
Old Services and Holdings, respectively, by the President or a Vice President
thereof, respectively, to the effect that (A) the representations and warranties
of such party contained in this Agreement are true and correct at and as of the
Closing Date as though made at and as of the Closing Date and (B) such party has
in all material respects performed all obligations required to be performed by
it pursuant to the terms of this Agreement at or prior to the Closing Date;
All such opinions, certificates, letters and other documents referred
to in this Section 8 will be in compliance with the provisions hereof only if
they are reasonably satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the General
Partner, Old Services or Holdings and delivered to you, as Representatives of
the Underwriters, or to counsel for the Underwriters, shall be deemed a
representation and warranty by the General Partner, Old Services or Holdings,
respectively to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Additional
Units hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 8, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c), (e) through (i), (m), (p) and (q) shall
be dated the Option Closing Date in question and the opinions called for by
paragraphs (c) through (i), as applicable, shall be revised to reflect the sale
of Additional Units.
9. Expenses. The Partnership agrees to pay the following costs and
--------
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction)
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and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, each Prepricing
Prospectus, the Prospectus, and all amendments or supplements to any of them as
may be reasonably requested for use in connection with the offering and sale of
the Units; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Units, including any stamp taxes in connection
with the original issuance and sale of the Units; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda, and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Units; (v) the
registration of the Common Units under the Exchange Act and the listing of the
Common Units on the Nasdaq National Market; (vi) the registration or
qualification of the Units for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the reasonable fees and expenses of
counsel for the Underwriters in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.; (viii) the
transportation and other expenses incurred by or on behalf of officers and
employees of the Partnership in connection with presentations to prospective
purchasers of the Units; and (ix) the fees and expenses of the Partnership's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Partnership.
It is understood, however, that except as otherwise provided in this
Section 9 and Section 5(j) hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on any
resale of the Units by any Underwriter, any advertising expenses connected with
any offers they may make and the transportation and other expenses incurred by
the Underwriters on their own behalf in connection with presentations to
prospective purchasers of the Units.
10. Effective Date of Agreement. This Agreement shall become
---------------------------
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement or a post-effective amendment thereto to be
declared effective before the offering of the Units may commence, when
notification of the effectiveness of the Registration Statement or such post-
effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the
Partnership by notifying you, or by you, as Representatives of the several
Underwriters, by notifying the Partnership.
If any one or more of the Underwriters shall fail or refuse to
purchase Units which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Units which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of the Units which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm Units
set forth opposite its name in Schedule I
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hereto bears to the aggregate number of Firm Units set forth opposite the names
of all non-defaulting Underwriters or in such other proportion as you may
specify in accordance with Section 20 of the Master Agreement Among Underwriters
of Xxxxx Xxxxxx Inc., to purchase the Units which such defaulting Underwriter or
Underwriters are obligated, but fail or refuse, to purchase. If any one or more
of the Underwriters shall fail or refuse to purchase Units which it or they are
obligated to purchase on the Closing Date and the aggregate number of Units with
respect to which such default occurs is more than one-tenth of the aggregate
number of Units which the Underwriters are obligated to purchase on the Closing
Date and arrangements satisfactory to you and the Partnership for the purchase
of such Units by one or more non-defaulting Underwriters or other party or
parties approved by you and the Partnership are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
party hereto (other than the defaulting Underwriter). In any such case which
does not result in termination of this Agreement, either you or the Partnership
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. If any one or more of the Underwriters shall fail or refuse to
purchase Additional Units which it or they are obligated to purchase hereunder
on the Option Closing Date, each non-defaulting Underwriter shall be obligated,
severally, in the proportion which the number of Firm Units set forth opposite
its name in Schedule I hereto bears to the aggregate number of Firm Units set
forth opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to purchase the Additional
Units which such defaulting Underwriter or Underwriters are obligated, but fail
or refuse, to purchase. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Partnership,
purchases Units which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
------------------------
termination in your absolute discretion, without liability on the part of any
Underwriter to any U.S. Timberlands Entity, by notice to the Partnership, if
prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Units), as the case may be, (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York or Oregon shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Units
at the offering price to the public set forth on the cover page of the
Prospectus or to enforce
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contracts for the resale of the Units by the Underwriters. Notice of such
termination may be given to the Partnership by telegram, telecopy or telephone
and shall be subsequently confirmed by letter.
12. Information Furnished by the Underwriters. The statements set
-----------------------------------------
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first, third, fifth and ninth
paragraphs and the third sentence of the seventh paragraph under the caption
"Underwriting" in any Prepricing Prospectus and in the Prospectus, constitute
the only information furnished by or on behalf of the Underwriters through you
as such information is referred to in Sections 6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10
-------------
and 11 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to any of the U.S. Timberlands
Entities, at the office of the Partnership at X.X. Xxx 00, 0000 Xxxxxxx 00,
Xxxxxxx Xxxxx, Xxxxxx 00000, Attention: Xxxx Xxxxxxxx, with a copy to Xxxx
Xxxxx, U.S. Timberlands Services Company, L.L.C., Xxxxx 00-X, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or (ii) if to you, as Representatives of the
several Underwriters, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the U.S. Timberlands Entities, their directors and
officers, and the other controlling persons referred to in Section 7 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any Underwriter of any
of the Units in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed
----------------------------
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
-46-
Please confirm that the foregoing correctly sets forth the agreement
among the Partnership, the Operating Company, the General Partner, Old Services
and Holdings and the several Underwriters.
Very truly yours,
U.S. TIMBERLANDS COMPANY, L.P.
By: NEW SERVICES, L.L.C.
By: /s/ Xxxx X. Xxxxx
-------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
U.S. TIMBERLANDS KLAMATH FALLS,
L.L.C.
By: /s/ Xxxx X. Xxxxx
-------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
NEW SERVICES, L.L.C.
By: /s/ Xxxx X. Xxxxx
-------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
U.S. TIMBERLANDS SERVICES
COMPANY, L.L.C.
By: /s/ Xxxx X. Xxxxx
-------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
U.S. TIMBERLANDS HOLDINGS, L.L.C.
By: /s/ Xxxx X. Xxxxx
-------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
XXXXX XXXXXX INC.
DEUTSCHE XXXXXX XXXXXXXX INC.
X.X. XXXXXXX & SONS, INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By: /s/ Xxxxxx Xxxxxx
-------------------
Managing Director
SCHEDULE I
U.S. Timberlands Company, L.P.
Number of Firm Units
Underwriter to be Purchased
----------- --------------------
Xxxxx Xxxxxx Inc.................................... 1,197,740
Deutsche Xxxxxx Xxxxxxxx Inc........................ 1,197,736
X.X. Xxxxxxx & Sons, Inc............................ 1,197,736
PaineWebber Incorporated............................ 1,197,736
Prudential Securities Incorporated.................. 1,197,736
Xxxxx X. Xxxxx & Co................................. 95,000
CIBC Xxxxxxxxxxx Corp............................... 130,000
Credit Suisse First Boston Corporation.............. 130,000
X.X. Xxxxxxxx & Co. Incorporated.................... 95,000
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation. 130,000
Xxxxxxxxxx & Co. Inc................................ 95,000
Xxxxxx Securities Co................................ 95,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.. 130,000
Pacific Crest Securities............................ 95,000
Xxxxx Xxxxxxx Inc................................... 95,000
Xxxxx XxxXxxxxx Incorporated........................ 95,000
Sands Brothers & Co., Ltd........................... 95,000
Xxxxxx, Xxxxxxxx & Company, Incorporated............ 95,000
Wedbush Xxxxxx Securities........................... 95,000
---------
TOTAL 7,458,684
=========
EXHIBIT A
[Letterhead of officer, director or holder of Common Units]
U.S. Timberlands Company, L.P.
Public Offering of Common Units
-------------------------------
November 13, 1997
Xxxxx Xxxxxx Inc.
Deutsche xxxxxx xxxxxxxx inc.
X.X. Xxxxxxx & Sons, Inc.
PaineWebber Incorporated
prudential securities incorporated
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") among U.S. Timberlands
Company, L.P., a Delaware limited partnership (the "Partnership"), U.S.
Timberlands Klamath Falls, L.L.C., New Services, L.L.C., U.S. Timberlands
Services Company, L.L.C., U.S. Timberlands Holdings, L.L.C., Xxxxx Xxxxxx Inc.,
Deutsche Xxxxxx Xxxxxxxx Inc., X.X. Xxxxxxx & Sons, Inc., PaineWebber
Incorporated and Prudential Securities Incorporated as representatives of the
underwriters, relating to an underwritten public offering of common units
representing limited partner interests (the "Common Units"), of the Partnership.
To induce you to enter into the Underwriting Agreement, the undersigned
agrees that it will not offer, sell, contract to sell or otherwise dispose of
any Common Units or Subordinated Units (as defined in the Underwriting
Agreement), any securities that are convertible into, or exercisable or
exchangeable for, or that represent the right to receive, Common Units or
Subordinated Units or any securities that are senior to or pari passu with
Common Units for a period of 180 days after the date of the Prospectus (as
defined in the Underwriting Agreement) without the prior written consent of
Xxxxx Xxxxxx Inc. Notwithstanding the foregoing, this letter agreement shall
not prohibit any transfer by the undersigned of any of the above-mentioned
securities to a member of his immediate family or a trust, family partnership or
similar family-related or family controlled entity, all of the interests of
which are owned by the undersigned or members of the immediate family of the
undersigned, so long as such transferee shall execute a letter agreement in
substantially the form hereof agreeing to the restrictions set forth
herein.
If for any reason the Underwriting Agreement is terminated before the
Closing Date (as defined in the Underwriting Agreement), the agreement set forth
above shall likewise be terminated.
Yours very truly,
[Signature of officer, director or common Unitholder]
[Name and address of officer, director or common
Unitholder]
