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Exhibit 4.2
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RAYONIER TIMBERLANDS
OPERATING COMPANY, L.P.
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NOTE PURCHASE AGREEMENT
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DATED AS OF OCTOBER 25, 1999
Re: $112,500,000 Series A Senior Notes due December 31, 2007
$147,500,000 Series B Senior Notes due December 31, 2009
$112,500,000 Series C Senior Notes due December 31, 2011
$112,500,000 Series D Senior Notes due December 31, 2014
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RAYONIER TIMBERLANDS OPERATING COMPANY, L.P.
$112,500,000 Series A Senior Notes due December 31, 2007
$147,500,000 Series B Senior Notes due December 31, 2009
$112,500,000 Series C Senior Notes due December 31, 2011
$112,500,000 Series D Senior Notes due December 31, 2014
Dated as of
October 25, 1999
Timber Capital Holdings LLC
c/o CT Corporation Systems
Corporation Trust Center
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
RAYONIER TIMBERLANDS OPERATING COMPANY, L.P., a Delaware limited
partnership (the "Company"), agrees with you as follows:
ARTICLE I
AUTHORIZATION OF NOTES; INTEREST
SECTION 1.1 Authorization of Notes.
The Company, acting pursuant to that certain Purchase and Sale Agreement
(the "Purchase Agreement") dated as of July 28, 1999, between Rayonier Inc., a
North Carolina corporation and an Affiliate of the Company, and Jefferson
Smurfit Corporation (U.S.), a Delaware corporation, will authorize the issue and
sale of (i) $112,500,000 aggregate principal amount of its Series A Senior Notes
due December 31, 2007 (the "Series A Notes"), (ii) $147,500,000 aggregate
principal amount of its Series B Senior Notes due December 31, 2009 (the "Series
B Notes"), (iii) $112,500,000 aggregate principal amount of its Series C Senior
Notes due December 31, 2011 (the "Series C Notes") and (iv) $112,500,000
aggregate principal amount of its Series D Senior Notes due December 31, 2014
(the "Series D Notes," and together with the Series A Notes, the Series B Notes,
and the Series C Notes, the "Notes," such term to include any such notes
delivered in substitution or exchange therefor, or in subsequent substitutions
or exchanges, pursuant to Article XIII of this Agreement). The Notes shall be
substantially in the respective forms set out in Exhibits 1(a), 1(b), 1(c) and
1(d), with such changes therefrom, if any, as may be approved by you and the
Company. Interest on the Notes will be as set forth in Section 1.2 below.
Certain capitalized terms used in this Agreement are defined in Schedule A;
references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.
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SECTION 1.2 Interest.
(a) Interest Rate. Except to the extent otherwise expressly
provided in Section 1.2(b) below and, with respect to overdue payments of
principal and interest, in the Notes of each series, the rate of interest borne
by the Notes of each series will be: with respect to the Series A Notes, 8.288%
per annum; with respect to the Series B Notes, 8.388% per annum; with respect to
the Series C Notes, 8.488% per annum; and with respect to the Series D Notes,
8.638% per annum. Interest will be payable semi-annually in arrears on each June
30 and December 31.
(b) Loan. You will use your best efforts to arrange, as soon as
reasonably possible thereafter, the making of a loan to you, or a placement of
debt securities by you, in either case having the attributes specified in the
next sentence (the "Loan"). The Loan will (w) bear interest on each of its
tranches (as specified in clause (z) below) at a then applicable market fixed
interest rate in respect of an investment of the term and credit quality of such
Loan tranche, (x) be secured only by the Notes and, at your option, by other
assets which do not have associated with them any liabilities, contingent or
otherwise, (y) generate loan proceeds equal to 80 percent of the aggregate
outstanding principal amount of the Notes of all series or (as shall be
determined by you in your sole discretion) more, and (z) be divided into
tranches maturing on the same dates as do the respective series of the Notes,
the aggregate principal amount of each such tranche to bear the same relation to
the aggregate principal amount of the entire Loan as the aggregate outstanding
principal amount of the series of the Notes maturing on the same date as such
Loan tranche bears to the aggregate principal amount of all outstanding Notes.
The Loan may be issued with original issue discount.
If and to the extent that the Yield to Maturity on a Loan tranche
is less than the Yield to Maturity on the series of Notes of like maturity
(calculated in each case as of the date of funding of the Loan), the interest
rate in respect of the Notes of such series shall be decreased (such decrease to
take effect on and as of the date of funding of the Loan) such that the Yield to
Maturity in respect of such series of Notes is equal to the Yield to Maturity on
such Loan tranche. For the purposes of this Section 1.2(b), "Yield to Maturity"
means, as of the determination date, that rate of interest which, if compounded
semi-annually and employed in discounting to present value from its respective
scheduled payment date each of the remaining payments of principal and interest
in respect of a series of Notes or Loan tranche, as the case may be, would
produce the original principal amount of such series of Notes or Loan tranche,
as the case may be.
(c) Interest Rate Notices. Promptly following your obtaining a
preliminary commitment with respect to the Loan, you will advise the Company in
writing thereof, setting forth the fixed rate of interest to be applicable to
each Loan tranche and the material terms thereof. Promptly thereafter, the
Company will provide to you, subject to your reasonable verification, written
advice of any adjustment in the interest rates applicable to the several series
of the Notes, including (i) such rates, prior to and giving effect to such
adjustment, and (ii) computations demonstrating the appropriateness thereof.
ARTICLE II
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SALE AND PURCHASE OF NOTES
SECTION 2.1 Sale and Purchase of Notes.
Subject to the terms and conditions of this Agreement and the Purchase
Agreement, the Company will issue and sell to you and you will purchase from the
Company, at the Closing, all Notes of each series.
ARTICLE III
CLOSING
SECTION 3.1 Closing.
The sale and purchase of the Notes shall occur at the offices of
Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, XX, Xxxxxxx, Xxxxxxx
00000 (or at such other location in Atlanta acceptable to you and the Company)
at the Closing. At the Closing the Company will deliver to you the Notes in the
form of a single Note of each of Series A, Series B, Series C and Series D in a
principal amount equal to the entire principal amount of such series, in each
case dated the date of the Closing and registered in your name, against delivery
by you to the Company of evidence, in form and substance satisfactory to the
Company, of transfer to the Company of all your right, title and interest in and
to certain limited liability company member interests, as more particularly
provided in the Purchase Agreement.
ARTICLE IV
[RESERVED]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to you that:
SECTION 5.1 Formation; Power and Authority; Ownership.
The Company is a limited partnership duly formed and validly existing
under the laws of the State of Delaware, and is duly licensed or qualified as a
foreign limited partnership in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the failure to be so
qualified could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The Company has all requisite partnership power
and authority to enter into this Agreement, to issue the Notes and to perform
its obligations under this Agreement and the Notes.
SECTION 5.2 Authorization, Etc.
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This Agreement and the Notes have been duly authorized by all necessary
action on behalf of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer, fraudulent
conveyance or other similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
SECTION 5.3 Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this Agreement
and the Notes will not (i) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of the Company or any Restricted Subsidiary under, any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, corporate charter or by-laws, or
any other material agreement or instrument to which the Company or any
Restricted Subsidiary is a party or by which the Company or any Restricted
Subsidiary or any of their respective properties may be bound or affected, (ii)
result in a breach of any of the terms, conditions or provisions of any material
order, judgment, decree, or ruling of any court, arbitrator or State or Federal
Governmental Authority applicable to the Company or any Restricted Subsidiary or
(iii) violate any provision of any statute or other rule or regulation of any
State or Federal Governmental Authority applicable to the Company or any
Restricted Subsidiary.
SECTION 5.4 Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any State or Federal Governmental Authority is required in
connection with the execution, delivery of performance by the Company of this
Agreement or the Notes.
SECTION 5.5 No Event of Default.
No event has occurred and is continuing or would result from the
transactions contemplated hereby that constitutes an Event of Default or
Default.
SECTION 5.6 Compliance with ERISA.
The execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is subject to the
prohibitions of Section 406 of ERISA or in connection with which a tax could be
imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the sources
of the consideration used to pay the purchase price of the Notes to be purchased
by you.
ARTICLE VI
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REPRESENTATIONS OF THE PURCHASER
SECTION 6.1 Purchase for Investment.
You represent that you are purchasing the Notes for your own account and
not with a view to the distribution thereof, provided that the disposition of
your property shall at all times be within your control. You understand that the
Notes have not been registered under the Securities Act by reason of specific
exemptions under the provisions thereof and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to so register the Notes or to qualify an indenture in respect
thereof under the Trust Indenture Act of 1939.
SECTION 6.2 Source of Consideration.
You represent that the limited liability company member interests
referred to in Section 3.1 do not constitute assets of any employee benefit plan
(as defined in Section 3 of ERISA).
ARTICLE VII
INFORMATION AS TO COMPANY; STATUS OF SUBSIDIARIES
SECTION 7.1 Financial and Business Information.
The Company shall deliver to you, and to each other holder of Notes that
is an Institutional Investor:
(a) Quarterly Statements. Within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) an unaudited consolidated balance sheet of the Company and
its Restricted Subsidiaries as at the end of such quarter, and
(ii) unaudited consolidated statements of income, changes in
partners' equity and cash flows of the Company and its Restricted
Subsidiaries, for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such quarter,
setting forth, in each case in comparative form, the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial statements
generally, and certified by a Senior Financial Officer as fairly presenting, in
all material respects, the financial position of the entities being reported on
and their results of operations and cash flows, subject to changes resulting
from normal, recurring year-end adjustments;
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(b) Annual Statements. Within 120 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in partners'
equity and cash flows of the Company and its Restricted Subsidiaries,
for such year,
setting forth, in each case in comparative form, the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by
(A) a report thereon of independent certified public
accountants of recognized national standing, which report shall
state that such financial statements present fairly, in all
material respects, the financial position of the entities being
reported upon and their results of operations and cash flows and
have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable
basis for such report in the circumstances, and
(B) a certificate of such accountants stating that they
have reviewed this Agreement and stating further whether, in
making their audit, they have become aware of any financial
condition or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or event
then exists, specifying the nature and period of the existence
thereof (it being understood that such accountants shall not be
liable, directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making an
audit in accordance with generally accepted auditing standards or
did not make such an audit);
(c) Interest Rate Adjustments. The Company will provide the
notices required by Section 1.2(d); and
(d) Requested Information. With reasonable promptness, such other
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries
relating to the ability of the Company to perform its obligations hereunder and
under the Notes, or the ability of any Subsidiary Guarantor to perform its
obligations under a Subsidiary Guarantee, as from time to time may be reasonably
requested by any such holder of Notes.
SECTION 7.2 Officer's Certificate.
Each set of financial statements delivered pursuant to Section 7.1(a) or
Section 7.1(b) hereof shall be accompanied by a certificate of a Senior
Financial Officer setting forth:
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(a) Covenant Compliance. Any information (including detailed
calculations where applicable) required in order to establish whether the
Company was in compliance with the requirements of Sections 10.1 - 10.3, 10.6,
10.10 and 10.11 hereof, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such Section,
where applicable, the calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms of such Sections,
and the calculation of the amount, ratio or percentage then in existence and
specifying those adjustments in any items abstracted from such financial
statements necessary to reflect the adjustments to GAAP provided for in this
Agreement); and
(b) Event of Default. A statement that such Senior Financial
Officer has reviewed the relevant terms hereof and has made, or caused to be
made, under his or her supervision, a review of the transactions and conditions
of the Company and its Restricted Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then being furnished to the
date of the certificate and that such review has not disclosed the existence
during such period of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action, if any,
shall have been taken or is proposed to be taken with respect thereto.
SECTION 7.3 Inspection.
The Company shall permit your representatives and designees, and the
representatives and designees of each other holder of Notes that is an
Institutional Investor, at your expense, or at the expense of such holder, and
upon reasonable prior notice to the Company, to visit the principal executive
office of the Company, to discuss the affairs, finances and accounts of the
Company and its Restricted Subsidiaries with the officers of the General
Partner, and (with the consent of the Company, which consent will not be
unreasonably withheld and with an opportunity for one or more Responsible
Officers to be present, it being understood that the failure of such Responsible
Officers to be present shall not preclude the representatives of such holder
from proceeding with such meeting) its independent public accountants, and (with
the consent of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each Restricted
Subsidiary, all at such reasonable times and as often as may be reasonably
requested in writing.
ARTICLE VIII
PREPAYMENT OF THE NOTES
SECTION 8.1 Required Prepayments.
The Company is not required to make any prepayments in respect of the
Notes except to the extent specified in sections 8.3, 8.8, 10.10(b) and 10.11.
SECTION 8.2 Optional Prepayments with Make-Whole Amount.
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The Company may, at its option, on any Business Day upon notice as
provided below, prepay the Notes in whole, or from time to time in part (in
multiples of $5,000,000); provided that, if the Company shall so prepay the
Notes in part, such prepayment may be of any one or more series as the Company
shall elect, at 100% of the principal amount so prepaid, together with interest
accrued thereon to the date of such prepayment, plus any applicable Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
With respect to any optional prepayment under this Section 8.2, the Company will
give each holder of Notes written notice of its intention to make such
prepayment not less than 20 Business Days prior to the date fixed for such
prepayment. Each such notice shall specify the proposed prepayment date, the
aggregate principal amount of the Notes of each series to be prepaid on such
date, the principal amount of each Note of each such series held by such holder
so to be prepaid, and the interest to be paid on the prepayment date with
respect to such principal amount(s) being prepaid, and shall be accompanied by a
certificate of a Senior Financial Officer as to the estimated Make-Whole Amount
due in connection with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of such computation.
If such notice is not withdrawn by the Company before the tenth (10th) Business
Day prior to the proposed payment date, the notice and the Company's obligation
to prepay provided for in the notice shall be irrevocable. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
SECTION 8.3 Prepayment Out of Asset Sale Proceeds or Excess Harvest
Proceeds.
In the event that the Company shall offer to apply the Excess Proceeds
of any Asset Sale pursuant to Section 10.10(b) or Excess Harvest pursuant to
Section 10.11 to the prepayment of Notes, the Company will give written notice
(a "Company Notice") of such offer to all holders of the Notes. The Company
Notice shall (i) describe in reasonable detail, the facts and circumstances
giving rise to such Company Notice, (ii) set forth the aggregate amount of such
Excess Proceeds which it intends to offer to apply to the prepayment of Notes,
(iii) contain an offer by the Company to prepay on a stated date (the
"Prepayment Date"), which shall be a Business Day not more than 60 days and not
less than 45 days after such Company Notice, a principal amount of the Notes,
ratably in proportion to the unpaid principal amounts thereof (subject to the
requirements of Section 10.10(b) or 10.11, as the case may be, to offer to
prepay the maximum aggregate principal amount of Notes that may be prepaid from
Excess Proceeds or Excess Harvest Proceeds, as the case may be, giving effect to
any then existing requirement to make a pro rata offer to prepay other Senior
Debt) held by each such holder which bears the same relationship to the
aggregate amount of such Excess Proceeds available to prepay the Notes as the
aggregate principal amount of all Notes held by such holder bears to the
aggregate principal amount of all then outstanding Notes, together with interest
on the principal amount of Notes to be prepaid to the Prepayment Date, but
without any Make-Whole Amount (showing in such offer the amount of interest
which would be paid on such Prepayment Date), and (iv) request each holder of
Notes offered to be prepaid to notify the Company in writing by a stated date,
which date shall be not less than 30 days after such holder's receipt of the
Company Notice, of its acceptance or rejection of such prepayment offer, it
being understood that
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such prepayment offer may be accepted in part and rejected in part. If a holder
does not notify the Company as provided in subclause (iv) above, then such
holder shall be deemed to have rejected such offer.
SECTION 8.4 Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes of any one or more
series pursuant to Section 8.2, the principal amount of the Notes to be prepaid
shall be allocated among all of the Notes of the respective series at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts of the Notes of such series not theretofore called for
prepayment. Partial prepayments of the Notes pursuant to Section 8.3 shall be
allocated as therein provided.
SECTION 8.5 Maturity Surrender, Etc.
In the case of each prepayment of Notes pursuant to this Article VIII,
the principal amount of each Note to be prepaid in full shall mature and become
due and payable on the date fixed for such prepayment, together with interest on
such principal amount accrued to such date and the applicable Make-Whole Amount,
if any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
SECTION 8.6 Purchase of Notes.
The Company will not and will not permit any Subsidiary or Affiliate
controlled by the Company or any Subsidiary to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding Notes except
upon the payment or prepayment of the Notes in accordance with the terms of this
Agreement. The Company will promptly cancel all Notes acquired by it, any
Subsidiary or any Affiliate controlled by the Company or any Subsidiary, and no
Notes may be delivered in substitution or exchange for any such Notes.
SECTION 8.7 Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2, or has become or is
declared to be immediately due and payable pursuant to Section 12.1 (and the
last paragraph of Section 12.1(c) applies), as the context requires.
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"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
generally accepted financial practice and at a discount factor (applied on a
semi-annual basis) equal to 50 basis points above the Reinvestment Yield with
respect to such Called Principal, provided, however, that from the date of
issuance of the Notes until the fifth anniversary thereof, such discount factor
shall be zero basis points above the Reinvestment Yield.
"Reinvestment Yield" means, with respect to the Called Principal of any
Note, the yield to maturity implied by (i) the yields reported, as of 10:00 A.M.
(New York City time) on the Business Day next preceding the Settlement Date with
respect to such Called Principal, on the display designated as "Page PX1" in the
Bloomberg Financial Markets Service (or such other display as may replace Page
PX1 in the Bloomberg Financial Markets Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable, including by way of interpolation, the Treasury Constant Maturity
Series Yields reported, for the latest day for which such yields have been so
reported as of the Business Day next preceding the Settlement Date with respect
to such Called Principal, in Federal Reserve Statistical Release H. 15 (519) (or
any comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury xxxx quotations to
bond-equivalent yields in accordance with generally accepted financial practice
and (b) interpolating linearly between (1) the actively traded U.S. Treasury
security with the maturity closest to and greater than the Remaining Average
Life and (2) the actively traded U.S. Treasury security with the maturity
closest to and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Note Purchase Agreement Called Principal into (ii) the sum of
the products obtained by multiplying (a) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (b) the
number of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment (the Stated Maturity of
such Note).
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is not a date on which
interest payments are due to be made under the terms of the Notes, then the
amount of the next succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
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"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid (including
partial prepayments) pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context requires.
SECTION 8.8 Change of Control.
(a) If a Change of Control occurs, each Holder of Notes will have
the right to require the Company to repurchase all or any part (equal to or
greater than $10,000,000) of that Holder's Notes pursuant to the offer described
below (the "Change of Control Offer") at an offer price in cash equal to 100% of
the aggregate principal amount of Notes to be repurchased plus accrued and
unpaid interest thereon, if any, to the date of purchase (the "Change of Control
Purchase Payment"). Within 30 days following any Change of Control, the Company
will mail a notice to each Holder stating: (a) that the Change of Control Offer
is being made pursuant to this Section 8.8 and that all Notes tendered will be
accepted for purchase; (b) the purchase date, which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed (the "Change of
Control Purchase Date") and the Change of Control Purchase Payment for each Note
of such Holder; (c) that any Note not tendered will continue to accrue interest;
(d) that, except for any Note accepted for purchase pursuant to the Change of
Control Offer with respect to which the Company defaults in the payment of the
Change of Control Purchase Payment, all Notes so accepted for purchase will
cease to accrue interest after the Change of Control Purchase Date; (e) that
Holders electing to have any Notes purchased, in whole or in part, pursuant to a
Change of Control Offer will be required to surrender such Notes to the Company
at the address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Purchase Date; (f) that
Holders whose Notes are being purchased only in part will be issued new Notes
equal in aggregate principal amount to the unpurchased portion of the Notes
surrendered and (g) the material circumstances and material facts regarding such
Change of Control.
(b) On the Change of Control Purchase Date, the Company will, to
the extent lawful, accept for purchase all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer. The Company will announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(c) Notwithstanding paragraphs (a) and (b) above, the Company
will not be required to make a Change of Control Offer upon a Change of Control
and a Holder will not have the right to require the Company to repurchase any
Notes pursuant to a Change of Control Offer if a third party (not an Affiliate
of the Company) makes an offer to purchase the Notes at the price, in the
manner, at the times and otherwise in substantial compliance with the
requirements set forth in this Agreement applicable to a Change of Control Offer
made by the Company and purchases all Notes validly tendered and not withdrawn
under such purchase offer.
(d) To the extent that the provisions of any applicable
securities laws or regulations conflict with provisions of this Section 8.8, the
Company shall comply with such
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securities laws and regulations and shall not be deemed to have breached its
obligations hereunder by virtue thereof.
(e) Notes repurchased pursuant to the foregoing provisions of
this Section 8.8 shall be cancelled and not reissued, and shall not be deemed
outstanding for any purpose of this Agreement.
ARTICLE IX
AFFIRMATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
SECTION 9.1 Compliance with Law.
The Company will, and will cause each of its Subsidiaries to, comply
with all laws, ordinances or governmental rules or regulations to which each of
them is subject, including, without limitation, Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 9.2 Insurance.
The Company will, and will cause each of its Restricted Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with respect
to their respective Material properties and businesses against such casualties
and contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary (with respect to such types,
terms, amounts and reserves) in the case of entities of established reputations
engaged in the same or a similar business and similarly situated and consistent
with the existing practices of the Company and its Restricted Subsidiaries as of
the date hereof.
SECTION 9.3 Maintenance of Properties.
The Company will, and will cause each of its Restricted Subsidiaries to,
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent
the Company or any Restricted Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is desirable in
the conduct of its business and the Company has
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concluded that such discontinuance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 9.4 Payment of Taxes.
The Company will, and will cause each of its Subsidiaries to, file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
SECTION 9.5 Existence, Etc.
Subject to and except as permitted by Sections 10.7 and 10.10, the
Company will at all times preserve and keep in full force and effect (a) its
existence as a limited partnership and (b) the corporate, limited liability
company or partnership existence, as the case may be, of each of its Restricted
Subsidiaries (unless merged into the Company or a Subsidiary in the manner
permitted by Section 10.7) and all rights and franchises of the Company and its
Restricted Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect such
existence, right or franchise would not, individually or in the aggregate, have
a Material Adverse Effect.
SECTION 9.6 Ranking; Covenant to Secure Notes Equally.
The Company will ensure that, at all times, all liabilities of the
Company under the Notes will rank in right of payment either pari passu or
senior to all other Debt of the Company except for Debt which is preferred as a
result of being secured as permitted by Section 10.3 (but then only to the
extent of such security). The Company will, if it or any Restricted Subsidiary
shall create or assume any Lien upon any of its property or assets, whether now
owned or hereafter acquired, other than Liens permitted by the provisions of
Section 10.3 (unless prior written consent to the creation or assumption thereof
shall have been obtained pursuant to Article XVII), make or cause to be made
effective provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Debt thereby secured so long as any such other
Debt shall be so secured.
ARTICLE X
NEGATIVE COVENANTS
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The Company covenants that so long as any of the Notes are outstanding:
SECTION 10.1 Limitation on Additional Debt.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable, contingently or
otherwise, for the payment of (in each case, to "incur"), any Debt (including,
without limitation, Acquired Debt), unless at the time of such incurrence, and
after giving pro forma effect to the receipt and application of the proceeds of
such Debt, the Consolidated Fixed Charge Coverage Ratio of the Company is
greater than 2.5 to 1.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur Permitted Debt.
SECTION 10.2 Limitation on Restricted Payments.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend or make any other distribution or
payment on or in respect of Capital Stock of the Company or any of its
Restricted Subsidiaries or any payment made to the direct or indirect holders
(in their capacities as such) of Capital Stock of the Company or any of its
Restricted Subsidiaries (other than (i) dividends or distributions payable
solely in Capital Stock of the Company (other than Redeemable Capital Stock of a
Restricted Subsidiary) or in options, warrants or other rights to purchase
Capital Stock of the Company (other than Redeemable Capital Stock of a
Restricted Subsidiary), (ii) the declaration or payment of dividends or other
distributions to the extent declared or paid to the Company or any Restricted
Subsidiary and (iii) the declaration or payment of dividends or other
distributions by any Restricted Subsidiary to all holders of Capital Stock of
such Restricted Subsidiary on a pro rata basis (including, in the case of the
Company, to the General Partner)),
(b) purchase, redeem, defease or otherwise acquire or retire for
value any Capital Stock of the Company or any of its Restricted Subsidiaries
(other than any such Capital Stock owned by a Wholly-Owned Restricted Subsidiary
of the Company),
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value, prior to any
scheduled maturity, scheduled repayment, scheduled sinking fund payment or other
Stated Maturity, any Subordinated Debt (other than any such Debt owned by the
Company or a Wholly-Owned Restricted Subsidiary of the Company),
(d) make any Investment (other than any Permitted Investment) in
any Person, or
(e) make any interest payment on the Rayonier Subordinated Notes
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(such payments or Investments described in the preceding clauses (a), (b), (c),
(d) and (e) being collectively referred to as "Restricted Payments"), unless, at
the time of and after giving effect to the proposed Restricted Payment (A) no
Default or Event of Default shall have occurred and be continuing, and (B) such
Restricted Payment, together with the aggregate of all other Restricted Payments
made by the Company and its Restricted Subsidiaries during the fiscal quarter
during which such Restricted Payment is made, shall not exceed (1) if the
Consolidated Fixed Charge Coverage Ratio of the Company shall be greater than
2.0 to 1, an amount equal to Available Cash for the immediately preceding fiscal
quarter, or (2) if the Consolidated Fixed Charge Coverage Ratio of the Company
shall be equal to or less than 2.0 to 1, an amount equal to the sum of (x)
$75,000,000 over the life of the Notes, plus (y) to the extent not theretofore
used as the basis for a Restricted Payment pursuant to clause (b) or (c) of the
next succeeding paragraph, the aggregate net cash proceeds of any (i) capital
contribution to the Company from any Person (other than a Restricted Subsidiary)
or (ii) issuance and sale of shares of Capital Stock (other than Redeemable
Capital Stock) of the Company to any Person (other than to a Restricted
Subsidiary), in either such case made after the Issue Date and not later than
substantially concurrently with the making of such Restricted Payment, minus (z)
the aggregate amount of all Restricted Payments (including such Restricted
Payment) made pursuant to this Clause (2) after the Issue Date. The amount of
any such Restricted Payment, if other than cash, shall be the Fair Market Value
(as determined in good faith by the Board of Directors of the General Partner)
on the date of such Restricted Payment of the asset(s) proposed to be
transferred by the Company or such Restricted Subsidiary, as the case may be,
pursuant to such Restricted Payment.
None of the foregoing provisions of this Section 10.2 shall
prohibit: (a) the payment of any dividend or distribution within 60 days after
the date of its declaration, if at the date of declaration such payment would be
permitted by the immediately preceding paragraph; (b) the redemption, repurchase
or other acquisition or retirement of any shares of any class of Capital Stock
of the Company or any Restricted Subsidiary in exchange for, or out of the net
cash proceeds of, a substantially concurrent (i) capital contribution to the
Company from any Person (other than a Restricted Subsidiary) or (ii) issue and
sale of other shares of Capital Stock (other than Redeemable Capital Stock of a
Restricted Subsidiary) of the Company to any Person (other than to a Restricted
Subsidiary); provided, however, that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase or other acquisition or
retirement shall be excluded from the calculation of Available Cash; (c) any
redemption, repurchase or other acquisition or retirement of Subordinated Debt
by exchange for, or out of the net cash proceeds of, a substantially concurrent
(i) capital contribution to the Company from any Person (other than a Restricted
Subsidiary) or (ii) issue and sale of (A) Capital Stock (other than Redeemable
Capital Stock of a Restricted Subsidiary) of the Company to any Person (other
than to a Restricted Subsidiary) or (B) Debt of the Company issued to any Person
(other than a Restricted Subsidiary), so long as such Debt is Permitted
Refinancing Debt; or (d) any distributions or redemptions declared or effected
by the Company on or before the Issue Date, whether or not payable on a later
date; provided, however, in each case, that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase or other
acquisition or retirement shall be excluded from the calculation of Available
Cash. In computing the amount of Restricted Payments previously made for
purposes of the preceding
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paragraph, Restricted Payments made under clause (a) shall be included and
Restricted Payments made under clauses (b), (c), and (d) shall not be so
included.
SECTION 10.3 Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens, other than
Permitted Liens, upon any of its respective properties or assets, whether owned
on the Issue Date or thereafter acquired, unless the Notes and the Subsidiary
Guarantees, as applicable, are secured equally and ratably with (or prior to, in
the case of Subordinated Debt) the obligations secured by such Lien.
SECTION 10.4 Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, transfer, disposition, purchase, exchange or lease of assets, property
or services), with, or for the benefit of, any Affiliate of the Company, unless
(a) such transaction or series of related transactions is between the Company
and one or more of its Restricted Subsidiaries or between two or more Restricted
Subsidiaries or (b) such transaction or series of related transactions is on
terms that are no less favorable to the Company or such Restricted Subsidiary,
as the case may be, than those which would have been obtained in a comparable
transaction at such time from Persons who are not Affiliates of the Company or a
Restricted Subsidiary; provided, however, that this covenant will not apply to
(i) any employment agreement, stock option agreement, restricted stock
agreement, consulting agreement or similar agreement entered into in the
ordinary course of business, (ii) transactions permitted by Section 10.2, (iii)
any agreement in effect on the Issue Date or any amendment thereto (so long as
the agreement, as amended by such amendment, is no less favorable (taken as a
whole) to the holders of the Notes than the original agreement as in effect on
the Issue Date) and any transactions contemplated thereby, and (iv) the payment
of reasonable fees to, and indemnities provided on behalf of, officers,
directors, employees or consultants of the Company, any general partner or any
Restricted Subsidiary in the ordinary course of business.
SECTION 10.5 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make
any other distributions on or in respect of its Capital Stock, (b) pay any Debt
owed to the Company or any other Restricted Subsidiary, (c) make loans or
advances to, or any investment in, the Company or any other Restricted
Subsidiary, or (d) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary (collectively, "Payment Restrictions"), except
for such encumbrances or restrictions existing under or by reason of (i)
applicable law, rules or regulations, or any order or ruling by any governmental
authority; (ii) any agreement in effect at or entered into
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on the Issue Date (including, without limitation, this Agreement and the Credit
Agreement); (iii) customary non-assignment provisions of any contract, license
or any lease governing a leasehold interest of the Company or any Restricted
Subsidiary; (iv) customary restrictions on cash or other deposits imposed by
customers under contracts entered into in the ordinary course of business; (v)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (d) above on
the property so acquired; (vi) contracts for the sale of assets, including,
without limitation, customary restrictions with respect to a Restricted
Subsidiary pursuant to an agreement that has been entered into for the sale of
all or substantially all of the Capital Stock or assets of such Restricted
Subsidiary; (vii) any agreement or other instrument governing Debt, Preferred
Stock or Redeemable Capital Stock of a Person acquired by the Company or any
Restricted Subsidiary (or of a Restricted Subsidiary of such Person) in
existence at the time of such acquisition (but not created in contemplation
thereof), which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person, or the
properties, assets or Subsidiaries of the Person, so acquired; (viii) provisions
contained in agreements or instruments relating to Debt or Preferred Stock which
prohibit the transfer of all or substantially all of the assets of the obligor
or issuer thereunder unless the transferee shall assume the obligations of the
obligor or issuer under such agreement or instrument; or (ix) Permitted
Refinancing Debt, provided that the encumbrances or restrictions of the type
referred to in clause (a), (b), (c), or (d) above, contained in agreements
governing such Permitted Refinancing Debt, are no more restrictive (taken as a
whole) than those contained in the agreement governing the Debt being
refinanced.
SECTION 10.6 Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction with respect to
any property of the Company or any of its Restricted Subsidiaries.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may
enter into Sale and Leaseback Transactions with respect to property acquired or
constructed after the Issue Date; provided that (a) the Company or such
Restricted Subsidiary would be permitted to incur Debt secured by a Lien on such
property in an amount equal to the Attributable Debt with respect to such Sale
and Leaseback Transaction, or (b) the lease in such Sale and Leaseback
Transaction is for a term not in excess of the lesser of (i) three years and
(ii) 60% of the remaining useful life of such property.
SECTION 10.7 Merger, Consolidation or Sale of Assets.
The Company may not consolidate or merge with or into (whether or not
the Company is the surviving Person), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions to, another Person unless (a) the Company is
the surviving Person, or the Person formed by or surviving such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation,
partnership or limited liability company organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (b) the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have
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been made assumes all the obligations of the Company under the Notes; (c)
immediately after such transaction no Default or Event of Default exists; and
(d) the Company or such other Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made will, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable Four-Quarter Period, be permitted to
incur at least $1.00 of additional Debt pursuant to Section 10.1 hereof.
Notwithstanding the foregoing clause (d), any Restricted Subsidiary may
consolidate or merge with or into, or dispose of all or any part of its
properties or assets to, the Company.
SECTION 10.8 Nature of Business.
Neither the Company nor any Restricted Subsidiary will engage to any
Material extent in any business other than the Business.
SECTION 10.9 Limitation on Non-Guarantor Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor to guarantee the payment of any Debt of the Company unless
such Restricted Subsidiary simultaneously executes and delivers a Subsidiary
Guarantee and an Officer's Certificate setting forth the manner of authorization
thereof, and with respect to any guarantee of Subordinated Debt by a Subsidiary,
any such guarantee shall be subordinated to such Restricted Subsidiary's
Subsidiary Guarantee at least to the same extent as such Subordinated Debt is
subordinated to the Notes; provided that this Section 10.9 shall not be
applicable to any guarantee of any Subsidiary that (A) existed at the time such
Person became a Subsidiary of the Company and (B) was not incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary of the Company.
Further, a pledge of assets permitted pursuant to Section 10.3 as security for
any Debt for which the pledgor is not otherwise liable shall not be considered a
guarantee giving rise to any requirement of a Subsidiary Guarantee under this
Section 10.9.
SECTION 10.10 Asset Sales.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to (i) sell, lease, convey or otherwise dispose of any
assets other than sales in the ordinary course of business and consistent with
past practice (provided, that the sale, lease, conveyance or other disposition
of all or substantially all of the assets of the Company shall be governed by
the provisions of Section 10.7 hereof and not by the provisions of this Section
10.10 and provided further, that Sale and Leaseback Transactions shall be
governed by the provisions of Section 10.6 and not by the provisions of this
Section 10.10) or (ii) issue or sell Capital Stock of any of its Restricted
Subsidiaries, in the case of either clause (i) or (ii) above whether in a single
transaction or a series of related transactions, that has a Fair Market Value
(as determined in good faith by the Board of Directors of the General Partner)
in excess of $10,000,000 or for net cash proceeds in excess of $10,000,000 (each
of the foregoing, an "Asset Sale"), unless at least 75% of the consideration
therefor received by the Company or such Restricted Subsidiary is in the form of
cash or cash equivalents; provided, however, that the amount of (A) any
liabilities (as shown on the Company's
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or such Restricted Subsidiary's most recent audited balance sheet or in the
notes thereto) of the Company or any Restricted Subsidiary that are assumed by
the transferee of any such assets and (B) any notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are converted (by means of a sale, non-recourse loan or otherwise) by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received) within 120 days of such Asset Sale, shall be deemed to be cash for
purposes of this provision; and provided further, that the 75% limitation set
forth above shall not apply to any Asset Sale in which the cash portion of the
consideration received therefrom, determined in accordance with the foregoing
proviso, is equal to or greater than what the after-tax proceeds would have been
had such Asset Sale complied with the aforementioned 75% limitation.
Notwithstanding the foregoing, Asset Sales shall not be deemed to include (a)
any transfer of assets or Capital Stock by the Company or any of its Restricted
Subsidiaries to a Wholly-Owned Restricted Subsidiary of the Company, (b) any
transfer of assets pursuant to or constituting a Permitted Investment, (c) the
sale of Timberlands in a like-kind exchange for a like interest in other
Timberlands having a Fair Market Value (as determined in good faith by the Board
of Directors of the General Partner) at least equal to the Fair Market Value (as
determined in good faith by the Board of Directors of the General Partner) of
the Timberlands sold, (d) the sale of not more than 100,000 acres in the
aggregate of Timberlands designated in good faith by the Board of Directors of
the General Partner for a higher and better use, (e) a disposition of obsolete
equipment in the ordinary course of business, (f) any sale of Capital Stock of,
or Debt or other securities of, an Unrestricted Subsidiary, (g) timber deed,
bulk, pay-as-cut and stumpage sales in the ordinary course of business and (h)
any transaction permitted by Section 10.2.
(b) In the event that the aggregate Net Proceeds received by the
Company or any of its Restricted Subsidiaries from one or more Asset Sales since
the Issue Date exceed the Adjusted Asset Sales Amount, within 270 days after the
date such aggregate Net Proceeds exceed such amount (or such longer period as
may be required to comply with any agreement in effect on the Issue Date), the
Company, at its option, may apply the amount of such aggregate Net Proceeds in
excess of the Adjusted Asset Sales Amount (less the amount of any such Net
Proceeds previously applied during such fiscal year for the purposes set forth
in clause (i) and/or (ii) below) to (i) reduce Senior Debt of the Company
secured by a Permitted Lien or Senior Debt of a Restricted Subsidiary (with a
permanent reduction of availability in the case of the Working Capital Facility
or any other facility that permits amounts repaid or prepaid to be reborrowed)
or (ii) make, or commit, pursuant to a binding written contract (provided that
the contract is consummated substantially in accordance with the terms thereof
within 30 days after the end of the 270-day period), to make, an investment in
assets used or useful in the Business. Pending the final application of any such
Net Proceeds, the Company or any Restricted Subsidiary may temporarily reduce
borrowings under the Working Capital Facility or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Agreement. Any such Net
Proceeds in excess of the Adjusted Asset Sales Amount that are not applied or
invested as provided in the first sentence of this Section 10.10(b) will be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $50,000,000, the Company shall make an offer to Holders of
Notes pursuant to Section 8.3 and an offer to all holders of other Senior Debt
that contains provisions similar to those set forth in Section 8.3 and this
Section 10.10(b) (an "Asset Sale Offer"), to prepay the maximum principal amount
of Notes and such other Debt that may be prepaid out of the Excess Proceeds (in
the case of the Notes, at the price
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and all as otherwise more fully provided in Section 8.3). To the extent that the
aggregate principal amount of Notes and such other Debt tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Company may use such
deficiency for general business purposes. If the aggregate principal amount of
Notes, and such other Debt, offered to be prepaid exceeds the amount of Excess
Proceeds offered to be applied to prepay the same, the offer to prepay the Notes
and such other Debt shall be made on a pro rata basis. Upon completion of such
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
SECTION 10.11 Limitation on Harvesting.
In the event that the Company or any of its Restricted Subsidiaries
receive any Net Proceeds from one or more Excess Harvests, within 270 days after
the date of such receipt (or such longer period as may be required to comply
with any agreement in effect on the Issue Date), the Company, at its option, may
apply the amount of such aggregate Net Proceeds (less the amount of any such Net
Proceeds previously applied during such fiscal year for the purposes set forth
in clause (a) and/or (b) below) to (a) reduce Senior Debt of the Company secured
by a Permitted Lien or Senior Debt of a Restricted Subsidiary (with a permanent
reduction of availability in the case of the Working Capital Facility or any
other facility that permits amounts repaid or prepaid to be reborrowed) or (b)
make, or commit, pursuant to a binding written contract (provided that the
contract is consummated substantially in accordance with the terms thereof
within 30 days after the end of the 270-day period), to make an investment in
assets used or useful in the Business. Pending the final application of any such
Net Proceeds, the Company or any Restricted Subsidiary may temporarily reduce
borrowings under the Working Capital Facility or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Agreement. Any such Net
Proceeds that are not applied or invested as provided in the first sentence of
this Section 10.11 will be deemed to constitute "Excess Harvest Proceeds." When
the aggregate amount of Excess Harvest Proceeds exceeds $100,000,000, the
Company shall make an offer to Holders of Notes pursuant to Section 8.3 and an
offer to all holders of other Senior Debt containing provisions similar to those
set forth in Section 8.3 and this Section 10.11 (an "Excess Harvest Offer") to
prepay the maximum principal amount of Notes and such other Debt that may be
prepaid out of the Excess Harvest Proceeds (in the case of the Notes, at the
price and all as otherwise more fully provided in Section 8.3). To the extent
that the aggregate principal amount of Notes and such other Debt tendered
pursuant to an Excess Harvest Offer is less than the Excess Harvest Proceeds,
the Company may use such deficiency for general business purposes. If the
aggregate principal amount of Notes and such other Debt, offered to be prepaid
exceeds the amount of Excess Harvest Proceeds offered to be applied to prepay
the same, the offer to prepay the Notes and such other Debt shall be made on a
pro rata basis. Upon completion of such Excess Harvest Offer, the amount of
Excess Harvest Proceeds shall be reset at zero.
ARTICLE XI
EVENTS OF DEFAULT
SECTION 11.1 Events of Default.
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An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) default by the Company or any Subsidiary Guarantor in the
payment of the principal of or Make-Whole Amount, if any, on any Note when the
same becomes due and payable (upon Stated Maturity, acceleration, optional
redemption or otherwise); or
(b) default by the Company or any Subsidiary Guarantor in the
payment of an installment of interest on any of the Notes, when the same becomes
due and payable, which default continues for a period of 10 days; or
(c) failure to perform or observe any other term, covenant or
agreement contained in this Agreement or the Subsidiary Guarantee of any
Subsidiary Guarantor (other than a default specified in clause (a) or (b) above)
and such default continues for a period of 30 days after the earlier of written
notice of such default requiring the Company to remedy the same shall have been
given to the Company or such Subsidiary Guarantor by the holder of a Note then
outstanding or an executive officer of the General Partner obtains actual
knowledge of such default; or
(d) any representation or warranty made in Sections 5.1 through
5.6 of this Agreement, or any statements in a certificate or instrument
delivered after the Closing is false or incorrect as of the date as of which
such representation, warranty or statement is made and the falsity or
incorrectness thereof could reasonably be expected to result in a Material
Adverse Effect.
(e) default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of Debt under which
the Company or any Restricted Subsidiary of the Company then has outstanding
Debt, which default (i) is caused by a failure to pay at its Stated Maturity or
within the applicable grace period, if any, provided with respect to such Debt,
principal, premium or interest with respect to Debt of the Company or a
Restricted Subsidiary (collectively, a "Payment Default") or (ii) results in the
acceleration of such Debt prior to its Stated Maturity and, in each case, the
principal amount of any such Debt, together with the principal amount of any
other such Debt under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $25,000,000 or more; or
(f) a final judgment or judgments (which is or are non-appealable
or which has or have not been stayed pending appeal) shall be rendered against
the Company or any Restricted Subsidiary for the payment of money in excess of
$15,000,000 in the aggregate (other than that portion of a final judgment as to
which a reputable insurance company has accepted liability) and such judgment(s)
shall not be discharged or execution thereon stayed pending appeal or review
within 60 days after entry thereof, or, in the event of such a stay, shall not
be discharged within 30 days after such stay expires; or
(g) the Subsidiary Guarantee of any Subsidiary Guarantor shall
for any reason cease to be, or be asserted by the Company or such Subsidiary
Guarantor, as applicable, not to be, in full force and effect (except pursuant
to the release of the Subsidiary Guarantee of such Subsidiary Guarantor); or
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(h) the Company or any Significant Subsidiary that is a
Restricted Subsidiary (or each member of any group of Subsidiaries that are
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary) (i) is generally not paying, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, reorganization, moratorium or other
similar law of any jurisdiction, (iii) makes an assignment for the benefit of
its creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with respect
to any substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes action for the purpose of any of the foregoing; or
(i) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any Significant
Subsidiary that is a Restricted Subsidiary (or each member of any group of
Subsidiaries that are Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary), a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any Significant Subsidiary that is a Restricted
Subsidiary (or each member of such group), or any such petition shall be filed
against the Company or any Significant Subsidiary that is a Restricted
Subsidiary (or each member of such group) and such petition shall not be
dismissed or appointment discharged within 60 days.
ARTICLE XII
REMEDIES ON DEFAULT, ETC.
SECTION 12.1 Acceleration.
(a) If an Event of Default with respect to the Company or any
Significant Subsidiary that is a Restricted Subsidiary (or any group of
Subsidiaries that are Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary) described in paragraph (h) or (i) of
Article XI has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing,
any holder or holders of at least 50% in aggregate principal amount of the Notes
(without regard to series) at the time outstanding may at any time at its or
their option, by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Article XI has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such
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Event of Default may at any time, at its or their option, by notice or notices
to the Company, declare all the Notes held by it or them to be immediately due
and payable.
Upon any Note's becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Note will forthwith mature and the
entire unpaid principal amount of such Note, plus all accrued and unpaid
interest thereon and, to the full extent permitted by law, an amount equal to
the Make-Whole Amount, if any, that the Company would have had to pay if the
Company had elected to prepay the Notes pursuant to Section 8.2 hereof on the
date of such acceleration (but disregarding for this purpose in the computation
thereof the proviso to the definition of "Discounted Value" in Section 8.7),
shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
The Company acknowledges, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Company (except as herein specifically provided for).
SECTION 12.2 Other Remedies.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
SECTION 12.3 Rescission.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or (c) of Section 12.1, the holders of not less than 66_% in
aggregate principal amount of the Notes (without regard to series) then
outstanding, by written notice to the Company, may, on behalf of the holders of
all the Notes, waive, rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the rate specified therein, (b) all Events of Default and Defaults,
other than non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Article XVII, and
(c) no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
SECTION 12.4 No Waivers or Election of Remedies, Expenses, Etc.
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No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Article XV, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Article XII, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
ARTICLE XIII
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
SECTION 13.1 Registration of Notes.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary.
SECTION 13.2 Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
its attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, of
like series and in an aggregate principal amount equal to the unpaid principal
amount of the surrendered Note. Each such new Note shall be registered in the
name of such Person as such holder may request and shall be substantially in the
form of Notes being surrendered as set forth in Exhibit 1(a), 1(b), 1(c) or
1(d), as the case may be. Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to cover any stamp
tax or governmental charge imposed in respect of any such transfer of Notes.
Notes shall not be transferred in denominations of less than $1,000,000,
provided that if necessary to enable the registration of transfer by a holder of
its entire holding of Notes, one Note may be in a denomination of less than
$1,000,000. Notwithstanding any other provision of this Section 13.2, the
Company shall not be obligated to register the transfer of any Note unless it
shall have received from the proposed transferee representations and an opinion
of counsel, in each case satisfactory to it, that such transfer will not be
subject to the prohibitions of
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Section 406 of ERISA or be one in connection with which a tax could be imposed
pursuant to Section 4975(c)(1)(A) - (D) of the Code.
SECTION 13.3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of you or any other Holder that is an
Institutional Investor, notice from you or such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note is, or
is a nominee for, you or another Holder of a Note with a minimum net worth of at
least $100,000,000, your or such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of like series, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
ARTICLE XIV
PAYMENTS ON NOTES
SECTION 14.1 Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in The
City of New York, at the principal office of The Bank of New York in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in New York State or the principal
office of a bank or trust company in New York State.
SECTION 14.2 Home Office Payment.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified in Section 18.1, or by such other method or at such other address as
you shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, you shall surrender such Note for cancellation, reasonably promptly
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after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by you or your
nominee you will, at the Company's election, either endorse thereon the amount
of principal paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Company in exchange for a new Note or
Notes pursuant to Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by you under this Agreement and that has made
the same agreement relating to such Note as you have made in this Section 14.2.
ARTICLE XV
EXPENSES, ETC.
SECTION 15.1 Transaction Expenses.
The Company will pay all costs and expenses (including attorneys' fees
of a special counsel and, if reasonably required, local or other counsel)
incurred by you or a holder of a Note (a) in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes (whether
or not such amendment, waiver or consent becomes effective), that are requested
by the Company, (b) the costs and expenses incurred in enforcing or defending
(or determining whether or how to enforce or defend) any rights under this
Agreement or the Notes or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or the
Notes, or by reason of being a holder of any Note, and (c) the costs and
expenses, including financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company shall not, in connection with any of the matters described in
Section 15.1(a), be liable for the costs and expenses of more than one separate
legal firm, and separate local counsel as reasonably required.
SECTION 15.2 Survival.
The obligations of the Company under this Article XV will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
ARTICLE XVI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT
SECTION 16.1 Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder
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of a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company in respect of the
subject matter hereof and thereof, and supersede all prior agreements and
understandings relating to the subject matter hereof.
ARTICLE XVII
AMENDMENT AND WAIVER
SECTION 17.1 Requirements.
(a) With Consent of Holders. This Agreement (including the
Subsidiary Guarantee) and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company, any
Subsidiary Guarantors at the time existing and the holders of at least a
majority in aggregate principal amount of the Notes (without regard to series)
then outstanding ("Required Holders"), except that (a) no amendment or waiver of
any of the provisions of Article I, II, III, IV, V or VI hereof, or any defined
term (as it is used therein), will be effective as to you unless consented to by
you in writing, and (b) no such amendment or waiver may, without the written
consent of the holder of each Note of each series at the time outstanding and
affected thereby (a) reduce the principal amount of Notes whose holders must
consent to an amendment, supplement or waiver, (b) reduce the principal of or
change the fixed maturity of any Note or alter the provisions with respect to
the prepayment of the Notes (other than provisions of Sections 8.3, 10.10(b) and
10.11 which may be amended by the holders of at least 75% in aggregate principal
amount of the Notes (without regard to series) then outstanding), (c) reduce the
rate of or change the time for payment of interest on any Note, (d) waive a
Default or Event of Default in the payment of principal of or Make-Whole Amount,
if any, or interest on the Notes (except a rescission of acceleration of the
Notes by the holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such acceleration),
(e) make any Note payable in money other than that stated in the Notes, (f) make
any change in the provisions of this Agreement relating to waivers of past
Defaults or the rights of holders of Notes to receive payments of principal of,
Make-Whole Amount, if any, or interest on the Notes, (g) waive a redemption
payment with respect to any Note (other than a payment pursuant to Section 8.3,
10.10(b) and/or 10.11 which may be waived by the holders of at least 75% in
aggregate principal amount of the Notes (without regard to series) then
outstanding), (h) release any Subsidiary Guarantor other than in accordance with
Section 21.4 or (i) make any change in this Section 17.1(a).
(b) Without Consent of Holders. The Company and the Subsidiary
Guarantors may amend or supplement this Agreement (including the Subsidiary
Guarantee) or the Notes without the consent of any Holder of Notes:
(i) to cure any ambiguity, defect or inconsistency;
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(ii) to provide for the assumption of the Company's or a
Subsidiary Guarantor's obligations to the Holders of the Notes in the case
of a merger or consolidation not prohibited by this Agreement; or
(iii) to add or release any Subsidiary Guarantor pursuant to the
terms of this Agreement.
SECTION 17.2 Solicitation of Holders of Notes.
The Company will provide each holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far
in advance of the date a decision is required, to enable such holder to make an
informed and considered decision with respect to any proposed amendment, waiver
or consent in respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Article XVII to
each holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the requisite
holders of Notes.
SECTION 17.3 Binding Effect, Etc.
Any amendment or waiver consented to as provided in this Article XVII
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"this Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
SECTION 17.4 Notes Held by Company, Etc.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
have approved or consented to any amendment, waiver or consent to be given under
this Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates or Restricted Subsidiaries shall be deemed not to be outstanding.
ARTICLE XVIII
NOTICES
SECTION 18.1 Notices.
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All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or your nominee at
the address and in the manner below or at such other address and/or in
such other manner as you or your nominee shall have most recently
specified to the Company in writing,
Address for notices and communications generally:
c/o CT Corporation Systems
Corporation Trust Center
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Address for payments (which shall be by wire transfer of
immediately available funds):
Acct. No. 323869343 in The Chase Manhattan Bank,
New York, New York
ABA No. 000000000.
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at
RAYONIER TIMBERLANDS OPERATING COMPANY, L.P.
c/o Rayonier Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: General Counsel
, or at such other address as the Company shall have specified to the holder of
each Note in writing.
Notices under this Article XVIII will be deemed given only when actually
received.
ARTICLE XIX
REPRODUCTION OF DOCUMENTS
SECTION 19.1 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by
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you at the Closing (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to you, may
be reproduced by you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Article XIX shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
ARTICLE XX
CONFIDENTIAL INFORMATION
SECTION 20.1 Confidential Information.
For the purposes of this Article XX, "Confidential Information" means
information delivered to you by or on behalf of the Company, any Subsidiary or
any general partner in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature unless (i) if
each of the Company and the General Partner is not subject to the reporting
requirements of Section 13 of the Exchange Act, such information was clearly
marked or labeled or otherwise adequately identified in writing when received by
you as not being confidential information of the Company, such Subsidiary or
such Affiliate, and (ii) if either of the Company or the General Partner is
subject to the reporting requirements of Section 13 of the Exchange Act, the
same was clearly marked or labeled or otherwise adequately identified in writing
when received by you as being confidential information of the Company, provided
that such term does not include information that (a) was publicly known or
otherwise known to you prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by you or any Person acting on
your behalf, (c) otherwise becomes known to you other than through disclosure by
the Company or any Subsidiary or (d) constitutes financial statements delivered
to you under Section 7.1 that are otherwise publicly available. You will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, trustees, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes), (ii)
your financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Article XX, (iii) any other holder of any Note, (iv) any Person or
Persons from whom you may seek to obtain the Loan (if such Person has agreed
with the Company in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Article XX), (v) any federal
or state regulatory authority having jurisdiction over you, (vi) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
the investment portfolio of any Person from whom you obtain the Loans, or (vii)
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any other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to you, (x) in response to any subpoena or other legal process, (y)
in connection with any litigation to which you are a party or (z) if an Event of
Default has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under your Notes
and this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled as such to the benefits
of this Article XX as though it were a party to this Agreement. On reasonable
request by the Company in connection with the delivery to any holder of a Note
of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Article XX.
ARTICLE XXI
SUBSIDIARY GUARANTEE OF NOTES
SECTION 21.1 Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, irrevocably, jointly
and severally, guarantees to each Holder the full and prompt payment of the
principal of, Make-Whole Amount, if any, and interest on the Notes and all other
amounts due and payable under the Notes whether at maturity, by acceleration,
redemption, repurchase or otherwise, including, without limitation, interest on
the overdue principal of, Make-Whole Amount, if any, and interest on the Notes,
to the extent lawful, all in accordance with the terms hereof and thereof
(subject, however, to the limitations set forth in Section 21.3).
This Subsidiary Guarantee shall be an unsecured general obligation of
each Subsidiary Guarantor and rank senior in right of payment to all existing
and future subordinated Debt of such Subsidiary Guarantor and pari passu in
right of payment to all existing and future senior Debt of such Subsidiary
Guarantor except for Debt which is preferred as a result of being secured as
permitted by Section 10.3 (but then only to the extent of such security).
Failing payment when due of any amount so guaranteed for whatever
reason, the Subsidiary Guarantors will be jointly and severally obligated to pay
the same immediately. Each Subsidiary Guarantor hereby agrees that its
obligations pursuant to this Subsidiary Guarantee shall, to the extent permitted
by law, be unconditional irrespective of the validity, regularity or
enforceability of the Notes, the obligations of the Company under the Notes or
any other Subsidiary Guarantor's Subsidiary Guarantee, the absence of any action
to enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company or any other Subsidiary Guarantor, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of any Subsidiary Guarantor. Each Subsidiary
Guarantor, to the extent permitted by law, hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company or any
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other Subsidiary Guarantor, protest, notice, notice of intent to accelerate,
notice of acceleration and all demands whatsoever and covenants that this
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Notes and in this Article XXI. If any Holder is
required by any court or otherwise to return to the Company, any Subsidiary
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Subsidiary Guarantor, any amount paid
by the Company or any Subsidiary Guarantor to such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Subsidiary Guarantor agrees it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Subsidiary Guarantor agrees that this is a guarantee of
payment not a guarantee of collection.
SECTION 21.2. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Except as set forth in Sections 10.7 and 10.10, nothing
contained in this Agreement or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the Company or
another Subsidiary Guarantor or shall prevent any disposition of assets to the
Company or another Subsidiary Guarantor.
(b) Except as set forth in Sections 10.7 and 10.10, nothing
contained in this Agreement or in any of the Notes shall prevent any
consolidation or merger or sale of a Subsidiary Guarantor with or into a Person
other than the Company or a Subsidiary Guarantor (regardless of whether an
Affiliate of such Subsidiary Guarantor), or successive consolidations or mergers
in which a Subsidiary Guarantor or its successor or successors shall be a party
or parties, or shall prevent any sale, assignment, transfer, lease, conveyance
or other disposition of all or substantially all of the assets of a Subsidiary
Guarantor to a Person other than the Company or another Subsidiary Guarantor
(regardless of whether an Affiliate of such Subsidiary Guarantor) authorized to
acquire and operate the same, provided, that, (a) that if such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition
results in a surviving Person (other than the Company) who is not a Subsidiary
Guarantor, the Person surviving such consolidation or merger, or to which such
sale, assignment, transfer, lease, conveyance or disposition has been made shall
agree to assume such Subsidiary Guarantor's obligations arising under this
Article XXI and the Notes, (except to the extent that Section 21.3 would result
in the release of such obligations), (b) immediately after such transaction, and
giving effect thereto, no Default or Event of Default has occurred and is
continuing; and (c) such Subsidiary Guarantor or such other Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made will, at
the time of such transaction and after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable Four-Quarter
Period, be permitted to incur at least $1.00 of additional Debt pursuant to
Section 10.1. Notwithstanding the foregoing clause (c), any Restricted
Subsidiary may consolidate or merge with or into, or dispose of all or any part
of its properties and assets to, the Company. Upon any consolidation or merger,
or any sale, assignment, transfer, lease, conveyance or other disposition of all
or substantially all of the assets of a Subsidiary Guarantor in accordance with
this Section 21.2(b), the successor Person formed by such consolidation or into
which such Subsidiary Guarantor is
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merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, a Subsidiary Guarantor under this Agreement with the
same effect as if such successor had been named as a Subsidiary Guarantor
herein.
SECTION 21.3 Release of a Subsidiary Guarantor.
Upon (a) (i) the sale or other disposition of all of the Capital Stock
of a Subsidiary Guarantor to a Person other than the Company or another
Subsidiary Guarantor or (ii) the merger or consolidation of a Subsidiary
Guarantor with or into another Person or the sale of all or substantially all of
the assets of a Subsidiary Guarantor to another Person, in either case pursuant
to a transaction that is in compliance with this Agreement (including without
limitation as described in Section 21.2 hereof) or (b) the release of all
guarantees and co-obligor agreements by a Subsidiary Guarantor with respect to
Debt of the Company, such Subsidiary Guarantor shall be automatically and
unconditionally released and discharged from its Subsidiary Guarantee and all of
its obligations in respect of the Notes.
Except as provided in this Section 21.3, a Subsidiary Guarantor may not
otherwise be released from its Subsidiary Guarantee and its related obligations
hereunder and this Subsidiary Guarantee is a continuing guarantee which shall
remain in full force and effect until payment in full of the Notes and all other
amounts payable under this Subsidiary Guarantee.
SECTION 21.4 Limitation of Subsidiary Guarantor's Liability.
By becoming a Subsidiary Guarantor each Subsidiary Guarantor shall be
deemed to confirm, and by its acceptance of any Note, each Holder shall be
deemed to confirm, that it is their intentions that the Subsidiary Guarantee of
such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for
purposes of any federal or state law. To effectuate the foregoing intention, the
obligations of each Subsidiary Guarantor under this Subsidiary Guarantee shall
be limited to the maximum amount, after giving effect to all other contingent
and fixed liabilities of such Subsidiary Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guarantee or pursuant to Section 21.5, as will result in the
obligations of such Subsidiary Guarantor under this Subsidiary Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. This Section 21.4 is for the benefit of the creditors of each
Subsidiary Guarantor.
SECTION 21.5 Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, in the event any payment or distribution is made by any
Subsidiary Guarantor (a "Funding Subsidiary Guarantor") under this Subsidiary
Guarantee, such Funding Subsidiary Guarantor shall be entitled to a contribution
from each other Subsidiary Guarantor in a pro rata amount based on the Adjusted
Net Assets of each Subsidiary Guarantor (including the Funding Subsidiary
Guarantor) for all
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payments, distributions, damages and expenses incurred by the Funding Subsidiary
Guarantor in discharging the Company's obligations with respect to the Notes or
any other Subsidiary Guarantor's obligations with respect to this Subsidiary
Guarantee.
SECTION 21.6 Other Subsidiary Guarantees.
The Company hereby agrees to cause each guaranty of, and co-obligor
agreement with respect to, Debt of the Company made by a Subsidiary Guarantor to
include provisions substantially similar to Sections 21.4 and 21.5.
ARTICLE XXII
MISCELLANEOUS
SECTION 22.1 Successors and Assigns.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not, except that the benefits of
Sections 7.1, 7.2, 7.3, 13.3 and 14.2 shall be limited as therein provided.
SECTION 22.2 Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary notwithstanding,
any payment of principal of, or Make-Whole Amount or interest on, any Note that
is due on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.
SECTION 22.3 Severability.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 22.4 Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
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SECTION 22.5 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
SECTION 22.6 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK.
SECTION 22.7 No Recourse Against Others.
(a) No director, officer, employee, partner, incorporator or
stockholder of the Company or any of its general partners, as such, or any
Subsidiary Guarantor shall have any liability for any obligations of the Company
or such Subsidiary Guarantor hereunder and under the Notes or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder of Notes, by accepting a Note, waives and releases all such liability.
The waiver and release shall be part of the consideration for the issuance of
the Notes.
(b) Except as provided for in the Subsidiary Guarantee, the
obligations of the Company under the Notes will be non-recourse to any general
partner (and its Affiliates (other than the Company)) and payable only out of
the cash flow and assets of the Company. Each Holder of a Note, by accepting
delivery of such Note, will be deemed to have agreed that neither any general
partner nor any of its respective assets (nor any of its Affiliates (other than
the Company) nor their assets) shall be liable for any of the obligations of the
Company under the Notes (except as provided for in the Subsidiary Guarantee).
(c) Notwithstanding the foregoing, nothing in this provision
shall be construed as a waiver or release of any claims under the federal
securities laws.
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The execution hereof by you shall constitute a contract among the
Company and the Purchaser for the uses and purposes hereinabove set forth.
Very truly yours,
COMPANY:
RAYONIER TIMBERLANDS
OPERATING COMPANY, L.P.
By: RAYONIER TIMBERLANDS MANAGEMENT,
INC., its Managing General Partner
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------
Title: Treasurer
-----------------------------
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SUBSIDIARY GUARANTORS:
RAYLAND, LLC
By: RAYONIER TIMBERLANDS
MANAGEMENT, INC.,
its Manager
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
--------------------------
Title: Secretary
--------------------------
R (1999) TIMBERLANDS LLC
R (1999) TIMBERLANDS II LLC
By: RAYONIER TIMBERLANDS
OPERATING COMPANY, L.P.,
their sole member
By: RAYONIER TIMBERLANDS
MANAGEMENT, INC.,
its Managing General Partner
By: /s/Xxxx X. Xxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxx
-----------------------
Title: Secretary
-----------------------
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Accepted as of October 25, 1999 TIMBER CAPITAL HOLDINGS LLC
By: JEFFERSON SMURFIT
CORPORATION (U.S),
its sole member
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------
Title: VP
-----------------------
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SCHEDULE A
(to Note Purchase Agreement)
DEFINED TERMS
GENERAL PROVISIONS
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the express
requirements of this Agreement. All express or implied references herein to "the
Company and the Restricted Subsidiaries" for the purposes of computing the
consolidated financial position, results of operations, or other balance sheet
or financial statement item (including, without limitation, Available Cash,
Consolidated Cash Flow Available for Fixed Charges, Consolidated Fixed Charges,
Consolidated Income Tax Expense, Consolidated Interest Expense, Consolidated Net
Income, Consolidated Non-Cash Charges and Consolidated Total Assets) shall be
deemed to include only the Company and the Restricted Subsidiaries as separate
legal entities and, unless otherwise expressly provided herein, shall not
include the financial position, results of operations, or other such items, of
any other Person (including, without limitation, an Unrestricted Subsidiary),
whether or not, in any particular instance, such accounting treatment would be
in accordance with GAAP.
DEFINITIONS
As used herein (including the Schedules hereto), the following terms
have the respective meanings set forth below or set forth in the Section hereof
following such term:
"Acquired Debt" means, with respect to any specified Person (a) Debt of
any other Person existing at the time such other Person merged with or into or
became a Subsidiary of such specified Person, including Debt incurred in
connection with, or in contemplation of, such other Person merging with or into
or becoming a Subsidiary of such specified Person, and (b) Debt encumbering any
asset acquired by such specified Person.
"Acquisition Facility" means any loan facility provided for the purpose
of financing acquisitions.
"Acquisition Principal Amount" means $50,000,000.
"Adjusted Asset Sales Amount" means $100,000,000 as increased by 10% of
the purchase price of Asset Acquisitions (other than like-kind exchanges)
subsequent to the Issue Date.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date means the
amount by which the fair value of the properties and assets of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed
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and contingent liabilities incurred or assumed on such date), but excluding its
liabilities under the Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
"Affiliate" means, at any time, and with respect to any specified
Person, any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common Control
with, such specified Person. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Company; provided, however, for purposes of Section 10.4, the
Company shall not be an Affiliate of any Restricted Subsidiary and no Restricted
Subsidiary shall be an Affiliate of the Company or any other Restricted
Subsidiary.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged with or into the Company or
any Restricted Subsidiary, (b) the acquisition by the Company or any Restricted
Subsidiary of the assets of any Person (other than a Restricted Subsidiary)
which constitute all or substantially all of the assets of such Person, (c) the
acquisition by the Company or any Restricted Subsidiary of merchantable Timber
or Timberlands outside the ordinary course of business, or (d) the acquisition
by the Company or any Restricted Subsidiary of any division or line of business
of any Person (other than a Restricted Subsidiary).
"Asset Sale" is defined in Section 10.10.
"Asset Sale Offer" is defined in Section 10.10.
"Attributable Debt" means, with respect to any Sale and Leaseback
Transaction not involving a Capital Lease, as of any date of determination, the
total obligation (discounted to present value at the rate of interest implicit
in the lease included in such transaction) of the lessee for rental payments
(other than amounts required to be paid on account of property taxes,
maintenance, repairs, insurance, assessments, utilities, operating and labor
costs and other items which do not constitute payments for property rights)
during the remaining portion of the term (including extensions which are at the
sole option of the lessor) of the lease included in such transaction (in the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such rental obligation shall also include the amount of such penalty,
but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated).
"Available Cash" means, with respect to any fiscal quarter:
(a) the sum of (i) all cash and cash equivalents of the
Partnership Group on hand at the end of such fiscal quarter, and (ii) all
additional cash and cash equivalents of the Partnership Group on hand on the
date of determination of Available Cash with respect to such fiscal quarter
resulting from working capital borrowings made subsequent to the end of such
fiscal quarter, less
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(b) the amount of any cash reserves that is necessary or
appropriate in the reasonable discretion of the General Partner to (i) provide
for the proper conduct of the business of the Partnership Group (including
reserves for future capital expenditures and for anticipated future credit needs
of the Partnership Group) subsequent to such fiscal quarter, or (ii) comply with
applicable law or any loan agreement, security agreement, mortgage, debt
instrument or other agreement or obligation to which any Group Member is a party
or by which it is bound or its assets are subject.
For purposes of the definition of "Available Cash," the following terms
shall have the following meanings:
"Group Member" means a member of the Partnership Group.
"Partnership Group" means the Company and all
Subsidiaries, treated as a single consolidated entity.
"Working Capital Borrowings" means borrowings under the Bank
Credit Facility or a similar facility (such as a commercial paper
facility) giving rise to Debt incurred for working capital purposes and
for the purpose of making distributions to the Partnership.
"Business" means the acquisition, ownership, management, harvesting,
marketing and selling of Timber and activities related or incidental thereto,
including but not limited to the ownership, management and sale of properties
with a higher and better use than the growing of timber and the ownership,
operation and sale of facilities used in the processing or conversion of timber
into products.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City are required or authorized to be closed.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by such Person (as lessee or
guarantor or other surety) which would, in accordance with GAAP, be required to
be classified and accounted for as a capital lease on a balance sheet of such
Person.
"Capital Stock" means, with respect to any Person, any and all shares,
units representing interests, participations, rights in or other equivalents
(however designated) of such Person's capital stock, including (x) with respect
to partnerships, partnership interests (whether general or limited) and any
other interest or participation that confers upon a Person the right to receive
a share of the profits and losses of, or distributions of assets of, such
partnership, (y) with respect to limited liability companies, member interests,
and (z) with respect to any Person, any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Change of Control" means the occurrence of any of the following:
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(1) the sale, transfer, lease, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole to any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act) other than Rayonier Inc. or a
Subsidiary thereof, and within six months of the occurrence of such event
(which, in the case of an event consisting of a series of related transactions,
shall be deemed to have occurred on the date of consummation of the most recent
such transaction) there is a Rating Decline; or
(2) the adoption of a plan relating to the liquidation or dissolution of
the Company; or
(3) the occurrence of a Rating Decline within six months of the first
date on which neither Rayonier Inc. nor an Affiliate of Rayonier Inc. is the
managing general partner of the Company (or, if the Company is no longer a
limited partnership, the first date on which neither Rayonier Inc. nor an
Affiliate of Rayonier Inc. controls the management of the Company).
"Change of Control Offer" is defined in Section 8.8.
"Change of Control Purchase Date" is defined in Section 8.8.
"Change of Control Purchase Payment" is defined in Section 8.3.
"Closing" is defined in the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Rayonier Timberlands Operating Company, L.P., a
Delaware limited partnership.
"Company Notice" is defined in Section 8.3.
"Confidential Information" is defined in Article XX.
"Consolidated Cash Flow Available for Fixed Charges" means, with respect
to the Company and its Restricted Subsidiaries for any period, the sum of,
without duplication, the amounts for such period, taken as a single accounting
period, of (a) Consolidated Net Income, (b) Consolidated Non-Cash Charges, (c)
Consolidated Interest Expense, (d) interest on the Rayonier Subordinated Notes
(to the extent such interest is deducted in the determination of Consolidated
Net Income) and (e) Consolidated Income Tax Expense.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Company and its Restricted Subsidiaries, the ratio of the aggregate amount of
Consolidated Cash Flow Available for Fixed Charges for the most recent four full
fiscal quarters for which financial information in respect
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thereof is available immediately preceding the date of the transaction (the
"Transaction Date") giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (such most recent four full fiscal quarter period being
referred to herein as the "Four Quarter Period") to the aggregate amount of
Consolidated Fixed Charges for the Four Quarter Period. In addition to and
without limitation of the foregoing, for purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a pro forma basis for the
period of such calculation to, without duplication (a) the incurrence or
repayment of any Debt of the Company or any of its Restricted Subsidiaries (and,
in the case of any incurrence, the application of the net proceeds thereof)
during the period commencing on the first day of the Four Quarter Period to and
including the Transaction Date (the "Reference Period"), including, without
limitation, the incurrence of the Debt giving rise to the need to make such
calculation (and the application of the net proceeds thereof), as if such
incurrence (and application) occurred on the first day of the Reference Period
(including any actual interest payments made with respect to Debt under the
Working Capital Facility), and (b) any Asset Sales or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the need to
make such calculation as a result of the Company or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being liable
for Acquired Debt) occurring during the Reference Period, as if such Asset Sale
or Asset Acquisition occurred on the first day of the Reference Period;
provided, however, that (i) Consolidated Fixed Charges shall be reduced by
amounts attributable to businesses or assets that are so disposed of or
discontinued only to the extent that the obligations giving rise to such
Consolidated Fixed Charges would no longer be obligations contributing to the
Consolidated Fixed Charges subsequent to the date of determination of the
Consolidated Fixed Charge Coverage Ratio and (ii) Consolidated Cash Flow
Available for Fixed Charges generated by an acquired business or asset shall be
determined (x) in the case of an Asset Acquisition of Timber or Timberlands by
the Company or a Restricted Subsidiary (which for purposes of this definition
shall include the acquisition pursuant to the Purchase Agreement of the limited
liability company member interests described in Schedule 3.1) during such
period, by using the projected net cash flow of the Timber or Timberlands so
acquired, based on the harvest plan prepared in the ordinary course of business
and in good faith by the General Partner, for the first 12 full months of
operations of the acquired Timber or Timberlands following the date of the Asset
Acquisition; provided that such harvest plan shall not assume the harvesting or
sale of more than 10% (or, in the case of an acquisition under a cutting
contract with a term of less than 10 years, such higher percentage as shall be
equal to the quotient of 100% divided by the term of such cutting contract
(expressed in years)) of the total merchantable Timber so acquired in the first
12 full months following the date of the Asset Acquisition; and provided
further, in determining projected cash flow from acquired Timber or Timberlands,
prices shall be assumed to equal the average prices realized by the Company for
comparable Timber sold during such prior period; and (y) in the case of all
other Asset Acquisitions during such period, by using the actual gross profit
(revenues minus cost of goods sold) of such acquired business or asset during
the Four Quarter Period minus the pro forma expenses that would have been
incurred by the Company and its Restricted Subsidiaries in the operation of such
acquired business or asset during such period computed on the basis of personnel
expenses for employees retained or to be retained by the Company and its
Restricted Subsidiaries in the operation of the acquired business or asset and
non-personnel costs and expenses incurred by the Company and its
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Restricted Subsidiaries in the operation of the Company's business at similarly
situated facilities. If the applicable Reference Period for any calculation of
the Consolidated Fixed Charge Coverage Ratio shall include a portion prior to
the Issue Date, then such Consolidated Fixed Charge Coverage Ratio shall be
calculated based upon the Consolidated Cash Flow Available for Fixed Charges and
the Consolidated Fixed Charges of the Company on a pro forma basis for such
portion of the Reference Period prior to the Issue Date, giving effect to the
transactions occurring on the Issue Date, and the Consolidated Cash Flow
Available for Fixed Charges and the Consolidated Fixed Charges for the remaining
portion of the Reference Period on and after the Issue Date, giving pro forma
effect, as described in the two foregoing sentences, to all applicable
transactions occurring on the Issue Date or otherwise. Furthermore, in
calculating "Consolidated Fixed Charges" for purposes of determining the
"Consolidated Fixed Charge Coverage Ratio" (i) interest on outstanding Debt
(other than Debt referred to in clause (ii) below) determined on a fluctuating
basis as of the last day of the Four Quarter Period and which will continue to
be so determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Debt in effect on such date; (ii)
only actual interest payments associated with Debt incurred in accordance with
clause (d) of the definition of Permitted Debt and all Permitted Refinancing
Debt in respect thereof, during the Four Quarter Period shall be included in
such calculation; and (iii) if interest on any Debt actually incurred on such
date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the last day of the Four Quarter Period will
be deemed to have been in effect during such period.
"Consolidated Fixed Charges" means, with respect to the Company and its
Restricted Subsidiaries for any period, the sum of, without duplication, (a) the
amounts for such period of Consolidated Interest Expense and (b) the product of
(i) the aggregate amount of dividends and other distributions paid or accrued
during such period in respect of Preferred Stock and Redeemable Capital Stock of
Restricted Subsidiaries on a consolidated basis and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the then
applicable current combined federal, state and local statutory tax rate,
expressed as a percentage.
"Consolidated Income Tax Expense" means, with respect to any period, all
provisions for Federal, state, local and foreign income taxes of the Company and
its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the Company and
its Restricted Subsidiaries for any period, without duplication, the sum of (a)
the interest expense (not including any amounts paid or accrued in respect of
Preferred Stock or Redeemable Capital Stock) of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, (i) any amortization of debt discount,
(ii) the net cost under Interest Rate Agreements, (iii) the interest portion of
any deferred payment obligation, (iv) all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers' acceptance
financing that constitute Debt and (v) all accrued interest and (b) the interest
component of Capital Leases paid, accrued or scheduled to be paid or accrued by
the Company and its Restricted Subsidiaries during such period as determined on
a consolidated basis in accordance
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with GAAP. Consolidated Interest Expense shall not include the interest on the
Rayonier Subordinated Notes.
"Consolidated Net Income" means the net income of the Company and its
Restricted Subsidiaries, as determined on a consolidated basis in accordance
with GAAP and as adjusted to exclude (a) net after-tax extraordinary gains or
losses, (b) net after-tax gains or losses attributable to Asset Sales to the
extent the Net Proceeds therefrom result in the aggregate Net Proceeds received
by the Company or any Restricted Subsidiary from all Asset Sales since the Issue
Date exceeding the Adjusted Asset Sales Amount, (c) the net income or loss of
any Person which is not a Restricted Subsidiary and which is accounted for by
the equity method of accounting, provided that Consolidated Net Income shall
include the amount of dividends or distributions actually paid to the Company or
any Restricted Subsidiary, (d) the net income or loss prior to the date of
acquisition of any Person combined with the Company or any Restricted Subsidiary
in a pooling of interest, (e) the net income of any Restricted Subsidiary to the
extent that dividends or distributions of such Net income are not at the date of
determination permitted by the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or other regulation and (f)
the cumulative effect of any changes in accounting principles.
"Consolidated Non-Cash Charges" means, with respect to the Company and
its Restricted Subsidiaries for any period, the aggregate depreciation,
depletion, amortization and any other non-cash charges, in each case reducing
Consolidated Net Income of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Assets" means, at any time, the total assets and
properties of the Company and its Restricted Subsidiaries which would be shown
as assets on a consolidated balance sheet of the Company and its Restricted
Subsidiaries as of such time prepared in accordance with GAAP.
"Credit Agreement" means the Credit Agreement, dated as of October 25,
1999, among the Company, the lenders named therein and Credit Suisse First
Boston, as Administrative Agent, Xxxxxx Xxxxxxx Senior Funding, Inc. and
Citicorp Visa, Inc., as Co-Syndication Agents, and Credit Suisse First Boston,
Lead Arranger, as agent and as letter of credit issuing bank, and the several
financial institutions which are or become parties from time to time thereto,
evidencing the Bank Credit Facility, and as it may be amended, supplemented or
otherwise modified from time to time, including all exhibits and schedules
thereto, and any successor or replacement facility entered into in compliance
herewith.
"Debt" means as applied to any Person (without duplication):
(a) any indebtedness for borrowed money and all obligations
evidenced by any bond, note, debenture or other similar instrument or letter of
credit (or reimbursement agreements in respect thereof) which such Person has
directly or indirectly created, incurred or assumed (other than obligations with
respect to letters of credit securing obligations (other than obligations
described in paragraphs (a) through (c) of this definition) entered into in the
ordinary course of business of such
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Person to the extent such letters of credit are not drawn upon, or, if and to
the extent drawn upon, such drawing is reimbursed no later than the fifth
Business Day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit);
(b) any indebtedness for borrowed money and all obligations
evidenced by any bond, note, debenture or other similar instrument secured by
any Lien in respect of property owned by such Person, whether or not such Person
has assumed or become liable for the payment of such indebtedness, provided that
the amount of such indebtedness, if such Person has not assumed the same or
become liable therefor, shall in no event be deemed to be greater than the Fair
Market Value from time to time (as determined in good faith by such Person) of
the property subject to such Lien;
(c) any indebtedness, whether or not for borrowed money
(excluding trade payables and accrued expenses arising in the ordinary course of
business), with respect to which such Person has become directly or indirectly
liable and which represents the deferred purchase price (or a portion thereof)
or has been incurred to finance the purchase price (or a portion thereof) of any
property or service or business acquired by such Person, whether by purchase,
consolidation, merger or otherwise;
(d) the principal component of any obligations under Capital
Leases to the extent such obligations would, in accordance with GAAP, appear on
a balance sheet of such Person;
(e) all Attributable Debt of such Person in respect of Sale and
Leaseback Transactions not involving a Capital Lease;
(f) any indebtedness of any other Person of the character
referred to in clause (a), (b), (c), (d) or (e) of this definition with respect
to which the Person whose Debt is being determined has become liable by way of a
Guaranty;
(g) all Redeemable Capital Stock of any Restricted Subsidiary of
such Person valued at the greater of its voluntary or involuntary maximum fixed
repurchase price;
(h) any Preferred Stock (other than Redeemable Capital Stock) of
any Restricted Subsidiary of such Person that is not a Subsidiary Guarantor
valued at the liquidation preference thereof or any mandatory redemption payment
obligations in respect thereof; and
(i) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses (a)
through (h) above.
For purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date as of which Debt shall
be required to be determined, and if such price is based upon, or measured by,
the Fair Market Value of such Redeemable Capital Stock, such Fair Market Value
shall be determined in good faith by the board of directors of the issuer of
such Redeemable Capital Stock.
A-8
48
"Default" means any event that is, or after notice or passage of time or
both, would be, an Event of Default.
"Environmental Laws" means any and all applicable Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"Event of Default" is defined in Article XI.
"Excess Harvest" means a harvest of Timber (including timber deed, bulk,
pay-as-cut and stumpage sales), to the extent in excess in the aggregate of the
following limitations: (a) 140% of the Planned Volume during any fiscal year of
the Company, (b) 135% of the Planned Volume during any period of two consecutive
fiscal years of the Company, (c) 130% of the Planned Volume during any period of
three consecutive fiscal years of the Company, (d) 125% of the Planned Volume
during any period of four consecutive fiscal years of the Company, and (e) 120%
of the Planned Volume during any period of five consecutive fiscal years of the
Company. In the event that the Company or any of its Restricted Subsidiaries
sells Timber pursuant to a timber deed, bulk, pay-as-cut or stumpage contract,
the Timber shall be deemed harvested in equal monthly amounts over the life of
the contract, regardless of when the purchaser actually xxxxxx the Timber.
"Excess Harvest Offer" is defined in Section 10.11.
"Excess Harvest Proceeds" is defined in Section 10.11.
"Excess Proceeds" is defined in Section 10.10.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time and with respect to any property,
the sale value of such property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States of America, which are applicable from time to
time.
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49
"General Partner" means the managing general partner of the Company.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State
or other political subdivision thereof; or
(ii) any other jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" as applied to any Person, means any direct or indirect
liability, contingent or otherwise, of such Person with respect to any Debt,
lease, cash dividend or other obligation of another, including, without
limitation (a) any such obligation directly or indirectly guaranteed or endorsed
(otherwise than for collection or deposit in the ordinary course of business) by
such Person, or in respect of which such Person is otherwise directly or
indirectly liable, (b) any other obligation under any contract which, in
economic effect, is substantially equivalent to a guaranty, including, without
limitation, any such obligation of a partnership in which such Person is a
general partner or of a joint venture in which such Person is a joint venturer,
or (c) any obligation in effect guaranteed by such Person through any agreement
(contingent or otherwise) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or nonfurnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof.
"Holder" or "holder" means, with respect to any Note, the Person in
whose name such Note is registered in the register maintained by the Company
pursuant to Section 13.1.
"Institutional Investor" means (a) any holder of a Note holding more
than 10% of the aggregate principal amount of the Notes then outstanding, and
(b) any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form.
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50
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Company or any Restricted
Subsidiary from fluctuations in interest rates.
"Investment" means as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of stock or other securities of any
other Person, or any direct or indirect loan, advance or capital contribution by
such Person to any other Person, and any other item which would be classified as
an "investment" on a balance sheet of such Person prepared in accordance with
GAAP, including, without limitation, any direct or indirect contribution by such
Person of property or assets to a joint venture, partnership or other business
entity in which such Person retains an interest (it being understood that a
direct or indirect purchase or other acquisition by such Person of assets of any
other Person (other than stock or other securities) shall not constitute an
Investment). The amount involved in Investments made during any period shall be
the aggregate cost to the Company and its Restricted Subsidiaries of all such
Investments made during such period, determined in accordance with GAAP, but
without regard to unrealized increases or decreases in value, or write-ups,
write-downs or write-offs, of such Investments and without regard to the
existence of any undistributed earnings or accrued interest with respect thereto
accrued after the respective dates on which such Investments were made, less any
net return of capital realized during such period upon the sale, repayment or
other liquidation of such Investments (determined in accordance with GAAP, but
without regard to any amounts received during such period as earnings (in the
form of dividends not constituting a return of Capital, interest or otherwise)
on such Investments or as loans from any Person in whom such Investments have
been made). Notwithstanding the foregoing, if the Company shall at any time
designate any Restricted Subsidiary as an Unrestricted Subsidiary, the amount of
the Investment in such newly designated Unrestricted Subsidiary arising at such
time by reason of such designation shall be the portion of the Fair Market Value
of the net assets of such Subsidiary allocable to the Company's equity interest
in such Subsidiary at the time that such Subsidiary is designated an
Unrestricted Subsidiary.
"Investment Grade Rating" means, in respect of the Notes, a rating of
BBB- from S&P or a comparable rating granted by at least one of the other Rating
Agencies.
"Issue Date" means the date on which the Notes are originally
issued.
"Lien" means any mortgage, charge, pledge, lien (statutory or
other), security interest, hypothecation, assignment for security, claim, or
preference or priority or other encumbrance upon or with respect to any property
of any kind. A Person shall be deemed to own subject to a Lien any property
which such Person has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title
retention agreement; provided, however, "Lien" shall not include any negative
pledge.
"Loan" is defined in Section 1.2(c).
"Make-Whole Amount" is defined in Section 8.6.
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"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, (b) the ability of the
Company or any Significant Subsidiary that is a Subsidiary Guarantor to perform
its payment obligations, its obligations under Articles IX or X or any other
material obligations under this Agreement and the Notes, or (c) the validity or
enforceability of this Agreement or the Notes.
"Maturity Date" means, with respect to any Note, the date on which any
principal of such Note becomes due and payable as therein provided, whether at
the Stated Maturity with respect to such principal or by declaration of
acceleration, call for redemption or purchase or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. and its
successors.
"Net Proceeds" means, with respect to any Asset Sale or Excess Harvest,
the proceeds thereof in the form of cash or cash equivalents including payments
in respect of deferred payment obligations when received in the form of cash or
cash equivalents (except to the extent that such deferred payment obligations
are financed or sold with recourse to the Company or any Restricted Subsidiary
of the Company) net of (a) brokerage commissions and other fees and
expenses (including, without limitation, fees and expenses of legal counsel and
accountants and fees, expenses, discounts or commissions of underwriters,
placement agents and investment bankers) related to such Asset Sale or Excess
Harvest, (b) provisions for all taxes payable as a result of such Asset Sale or
Excess Harvest, (c) amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary of the Company) owning a beneficial
interest in the assets subject to such Asset Sale or Excess Harvest, (d)
appropriate amounts to be provided by the Company or any Restricted Subsidiary
of the Company, as the case may be, as a reserve required in accordance with
GAAP against any liabilities associated with such Asset Sale or Excess Harvest
and retained by the Company or any Restricted Subsidiary of the Company, as the
case may be, after such Asset Sale or Excess Harvest, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale or Excess Harvest and (e) amounts
required to be applied to the repayment of Debt secured by a Lien on the asset
or assets sold in such Asset Sale or Excess Harvest.
"Notes" is defined in Article I.
"Officer's Certificate" means a certificate of an officer of the General
Partner whose responsibilities extend to the subject matter of such certificate.
"Option of Holder to Elect Purchase" is defined in Section 8.3.
"Payment Default" is defined in Section 11.1.
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52
"Payment Restrictions" is defined in Section 10.5.
"Permitted Debt" means any of the following:
(a) Debt of the Company evidenced by the Notes;
(b) Debt outstanding on the Issue Date, including but not limited
to the Debt outstanding under the Credit Agreement and the Rayonier Subordinated
Notes;
(c) Debt of the Company or a Restricted Subsidiary incurred for
any purpose permitted under the Acquisition Facility, provided that the
aggregate principal amount of such Debt outstanding at any time may not exceed
the Acquisition Principal Amount;
(d) Debt of the Company or a Restricted Subsidiary incurred for
any purpose permitted under the Working Capital Facility, provided that the
aggregate principal amount of such Debt outstanding at any time may not exceed
the Working Capital Principal Amount;
(e) Debt owed by the Company or any Restricted Subsidiary to any
Restricted Subsidiary;
(f) Debt under Interest Rate Agreements;
(g) Permitted Refinancing Debt;
(h) Debt of the Company and its Restricted Subsidiaries
represented by letters of credit supporting (i) obligations under workers'
compensation laws and (ii) the repayment of Permitted Debt;
(i) surety bonds and appeal bonds required in the ordinary course
of business or in connection with the enforcement of rights or claims of the
Company or any of its Subsidiaries or in connection with judgments that do not
result in a Default or Event of Default;
(j) the Subsidiary Guarantee of the Notes (and any assumption of
the obligations guaranteed thereby);
(k) the incurrence by the Company or any Restricted Subsidiary of
Debt in respect of Capital Leases, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such Restricted Subsidiary,
in an aggregate principal amount which, when aggregated with the principal
amount of all other Debt then outstanding and incurred pursuant to this clause
(k) (together with any Permitted Refinancing Debt with respect thereto) does not
exceed $50,000,000 at any time outstanding;
A-13
53
(l) the incurrence by the Company or any Restricted Subsidiary of
additional Debt in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing Debt
incurred to refund, refinance or replace any other Debt incurred pursuant to
this clause (l), not to exceed $100,000,000.
"Permitted Investments" means, at any time, all of the
following:
(a) Investments made or owned by the Company or any Restricted
Subsidiary in (i) any evidence of Debt with a maturity of 365 days or less
issued by or directly, fully and unconditionally guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (ii) deposits, certificates of deposit or acceptances with a maturity
of 365 days or less of any institution that is a member of the Federal Reserve
System having combined capital and surplus and undivided profits of not less
than $500,000,000; (iii) commercial paper with a maturity of 365 days or less
issued by a corporation (other than an Affiliate of the Company) incorporated or
organized under the laws of the United States or any state thereof or the
District of Columbia and rated at least "A-1" by S&P or "P-1" by Moody's; (iv)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued by or directly, fully and unconditionally guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of America
is pledged in support thereof), in each case maturing within 365 days from the
date of acquisition; (v) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and having as at such date the highest rating obtainable
from either S&P or Moody's; or (vi) money market mutual or similar funds that
invest in obligations referred to in clauses (i) through (v) of this definition,
in each case having assets in excess of $100,000,000;
(b) the acquisition by the Company or any Restricted Subsidiary
of Capital Stock or other ownership interests, whether in a single transaction
or in a series of related transactions, of a Person engaged in substantially the
same business as the Company such that upon the completion of such transaction
or series of transactions, such Person becomes a Restricted Subsidiary;
(c) the making or ownership by the Company or any Restricted
Subsidiary of Investments (in addition to Investments permitted by subdivisions
(a), (b), (d), (e), (f) and (g)) in any Person which is engaged in substantially
the same business as the Company, provided that the aggregate amount of all such
Investments made by the Company and its Restricted Subsidiaries following the
Issue Date and outstanding pursuant to this subdivision (c) shall not at any
date of determination exceed 10% of Consolidated Total Assets (the "Investment
Limit"), provided that, in addition to Investments that would be permitted under
the Investment Limit, during any fiscal year the Company and its Restricted
Subsidiaries may invest up to $100,000,000 (the "Annual Limit") pursuant to the
provisions of this subdivision (c), but the unused amount of the Annual Limit
shall not be carried over to any future years;
X-00
00
(x) the making or ownership by the Company or any Restricted
Subsidiary of Investments (i) arising out of loans and advances to employees
incurred in the ordinary course of business, (ii) arising out of extensions of
trade credit or advances to third parties in the ordinary course of business and
(iii) acquired by reason of the exercise of customary creditors' rights upon
default or pursuant to the bankruptcy, insolvency or reorganization of a debtor;
(e) the creation or incurrence of liability by the Company or any
Restricted Subsidiary with respect to any Guaranty constituting an obligation,
warranty or indemnity, not guaranteeing Debt of any Person, which is undertaken
or made in the ordinary course of business;
(f) the creation or incurrence of liability by the Company or any
Restricted Subsidiary with respect to any Interest Rate Agreements; and
(g) the Subsidiary Guarantee of the Notes (and any assumption of
the obligations guaranteed thereby), and the making by the Company or any
Restricted Subsidiary of Investments in the Company or another Restricted
Subsidiary.
"Permitted Liens" means any of the following:
(a) Liens for taxes, assessments or other governmental charges
the payment of which is not yet due or is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and as to
which reserves or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor and be adequate in the good faith judgment of
the obligor;
(b) Liens of lessors, landlords and carriers, vendors, loggers,
warehousemen, mechanics, materialmen, repairmen and other like Liens incurred in
the ordinary course of business for sums not yet due or the payment of which is
being contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and as to which reserves or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor and be adequate
in the good faith judgment of the obligor, in each case (i) not incurred or made
in connection with the borrowing of money, the obtaining of advances or credit
or the payment of the deferred purchase price of property or (ii) incurred in
the ordinary course of business securing the unpaid purchase price of property
or services constituting current accounts payable, and banker's Liens in the
nature of rights of set off arising in the ordinary course of business of the
Company and its Subsidiaries in connection with Debt permitted by Section 10.1;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social security, or (ii)
to secure (or to obtain letters of credit that secure) the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
performance bonds, purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection with the borrowing
of money;
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(x) other deposits made to secure liability to insurance carriers
under insurance or self-insurance arrangements;
(e) Liens securing reimbursement obligations under letters of
credit, provided in each case that such Liens cover only the title documents and
related goods (and any proceeds thereof) covered by the related letter of
credit;
(f) any attachment or judgment Lien relating to a judgment that
does not constitute an Event of Default;
(g) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances, which, in
each case either (i) are granted, entered into or created in the ordinary course
of the business of the Company or any Restricted Subsidiary or (ii) do not
materially impair the value or intended use of the property covered thereby;
(h) Liens on property or assets of any Restricted Subsidiary
securing Debt of such Restricted Subsidiary owing to the Company or a Restricted
Subsidiary;
(i) Liens on assets of the Company or any Restricted Subsidiary
existing on the Issue Date;
(j) Liens existing on any property of any Person at the time it
becomes a Subsidiary of the Company, or existing at the time of acquisition upon
any property acquired by the Company or any such Subsidiary through purchase,
merger or consolidation or otherwise, whether or not assumed by the Company or
such Subsidiary, or created to secure Debt incurred to pay all or any part of
the purchase price or cost of construction or improvement (a "Purchase Money
Lien") of property (including Capital Stock and other securities) acquired by
the Company or a Restricted Subsidiary; provided that (i) any such Lien shall be
confined solely to such item or items of property and other property which is an
improvement to or is acquired for use specifically in connection with such
acquired property, or, in the case of construction, related unimproved land,
(ii) in the case of a Purchase Money Lien, the principal amount of the Debt
secured by such Purchase Money Lien shall at no time exceed an amount equal to
100% of the purchase price or cost of construction or improvement to the Company
and the Restricted Subsidiaries of such property, (iii) any such Purchase Money
Lien shall be created not later than 180 days after the acquisition of such
property and (iv) any such Lien (other than a Purchase Money Lien) shall not
have been created or assumed in contemplation of such Person's becoming a
Subsidiary of the Company or such acquisition of property by the Company or any
Subsidiary;
(k) easements, exceptions or reservations in any property of the
Company or any Restricted Subsidiary granted or reserved for the purpose of
pipelines, roads, the removal of oil, gas, coal or other minerals, and other
like purposes, or for the joint or common use of real property, facilities and
equipment, which are incidental to, and do not materially interfere with, the
ordinary conduct of the business of the Company or any Restricted Subsidiary;
A-16
56
(l) any Lien renewing or extending any Lien permitted by
subdivision (i) or (j), provided that (i) the principal amount of the Debt
secured by any such Lien shall not exceed the principal amount of such Debt
outstanding immediately prior to the renewal or extension of such Lien, and (ii)
no assets encumbered by any such Lien other than the assets encumbered
immediately prior to such renewal or extension shall be encumbered thereby;
(m) any negative pledge; or
(n) other Liens, provided that the aggregate of the obligations
secured by all such other Liens would not exceed $50,000,000.
"Permitted Refinancing Debt" means Debt incurred by the Company or any
Restricted Subsidiary to substantially concurrently (excluding any notice period
on redemptions) repay, refund, renew, replace, extend or refinance, in whole or
in part, any Permitted Debt of the Company or any Restricted Subsidiary or any
other Debt incurred by the Company or any Restricted Subsidiary pursuant to
Section 10.1, to the extent (a) the principal amount of such Permitted
Refinancing Debt does not exceed the principal or accreted amount plus the
amount of accrued and unpaid interest of the Debt so repaid, refunded or
refinanced (except that, in the case of the Notes, such Permitted Refinancing
Debt may include the redemption premiums set forth in Section 8.2), (b) the
Permitted Refinancing Debt ranks no more favorably in right of payment with
respect to the Notes than the Debt so repaid, refunded, renewed, replaced,
extended or refinanced, and (c) the Permitted Refinancing Debt has a Weighted
Average Life to Stated Maturity and Stated Maturity equal to, or greater than,
the Debt so repaid, refunded, renewed, replaced, extended or refinanced;
provided, however, that Permitted Refinancing Debt shall not include Debt
incurred by a Restricted Subsidiary to repay, refund, renew, replace, extend or
refinance Debt of the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, charitable
foundation, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Planned Volume" means 6,700,000 tons for the calendar year 2000 and
shall increase 2% per year thereafter. In the event of the acquisition of
merchantable Timber or Timberlands (other than in a like-kind exchange of Timber
or Timberlands for other Timber or Timberlands and other than Timber or
Timberlands acquired with the Net Proceeds of an Excess Harvest) constituting an
Asset Acquisition, Planned Volume will be increased for 10 years by 10% of the
volume of merchantable Timber so acquired; provided that if such Asset
Acquisition is made under a cutting contract with a term of less than 10 years,
Planned Volume will be increased for each year during the term of the cutting
contract by a number of tons equal to the number of tons so acquired multiplied
by the quotient of 100% divided by the number of years in the cutting contract.
In the event of a disposition of merchantable Timber or Timberlands constituting
an Asset Sale, Planned Volume will be reduced by 10% of the volume of
merchantable Timber sold in such Asset Sale. In the event of an Excess Harvest,
Planned Volume will be reduced by 10% of the amount of the Excess Harvest. For
purposes of this definition, all volumes of Timber harvested that are
denominated in board feet shall be converted to tons on the basis of 7.2 tons
per thousand board feet.
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"Preferred Stock," as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated), which is preferred
as to the payment of distributions, dividends, or upon any voluntary or
involuntary liquidation or dissolution of such Person, over shares or units of
Capital Stock of any other class of such Person.
"Prepayment Date" is defined in Section 8.3.
"Property" or "Properties" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, xxxxxx or
inchoate.
"Purchase Agreement" is defined in Section 1.1.
"Purchaser" means Jefferson Smurfit Corporation (U.S.) or one
of its Affiliates.
"Rating Agencies" means any or all of S&P, Xxxxx'x, Xxxx & Xxxxxx
Incorporated and Fitch IBCA, Inc.
"Rating Category" means:
(1) with respect to S&P, any of the following categories:
AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories) and
(2) with respect to Xxxxx'x, any of the following categories:
Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor
categories).
"Rating Decline" means a decrease in the rating of the Notes by either
Xxxxx'x or S&P by one or more gradations (including gradation within Ratings
Categories as well as between Rating Categories), or the Notes not being rated
by either Xxxxx'x or S&P. In determining whether the rating of the notes has
decreased by one or more gradations, gradations within Rating Categories, namely
+ and - for S&P, and 1, 2 and 3 for Xxxxx'x, will be taken into account.
"Rayonier" means Rayonier Inc., a North Carolina corporation,
and its successors.
"Rayonier Subordinated Notes" means Subordinated Debt owed by the
Company on the Issue Date to Rayonier or its Affiliates with the terms specified
in Annex I to this Schedule A.
"Redeemable Capital Stock" means any shares of any class or series of
Capital Stock, that, either by the terms thereof, by the terms of any security
into which it is convertible or exchangeable or by contract or otherwise, is or
upon the happening of an event or passage of time would be, required to be
redeemed prior to the Stated Maturity with respect to the principal of any
outstanding Note or is redeemable at the option of the holder thereof at any
time prior to the Stated Maturity of any of the outstanding Notes, or is
convertible into or exchangeable for debt securities at any time prior to the
Stated Maturity of any of the outstanding Notes.
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58
"Required Holders" means, at any time, the holders of at least a
majority in principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the General Partner with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Payments" is defined in Section 10.2.
"Restricted Subsidiary" means any Subsidiary which, as of the
date of determination, is not an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" of any Person (a "Transferor") means
any arrangement (other than between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries) whereby (a) property (the "Subject Property")
has been or is to be disposed of by such Transferor to any other Person with the
intention on the part of such Transferor of taking back a lease of such Subject
Property pursuant to which the rental payments are calculated to amortize the
purchase price of such Subject Property substantially over the useful life of
such Subject Property, and (b) such Subject Property is in fact so leased by
such Transferor or an Affiliate of such Transferor.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security" has the meaning set forth in section 2(a)(1) of the
Securities Act.
"Senior Debt" means Debt of the Company or any Restricted Subsidiary
which is not Subordinated Debt.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the General Partner.
"Significant Subsidiary" shall have the same meaning as in Rule 1.02(w)
of Regulation S-X under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, and its successors.
"Stated Maturity" means, (a) when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and (b) when used with respect to any other Debt, means the date or
dates specified in the instrument governing such Debt as the fixed date or dates
on which each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in respect
of such Debt, or any installment of interest thereon, is due and payable.
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"Subordinated Debt" means Debt of the Company or any Subsidiary
Guarantor which is expressly subordinated in right of payment to the Notes or
the Subsidiary Guarantee, respectively.
"Subsidiary" means, with respect to any Person, (a) a corporation a
majority of whose Voting Stock (or, in the case of a partnership, a majority of
the partners' Capital Stock, considering all partners' Capital Stock as a single
class) is at the time, directly or indirectly, owned by such Person, by one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof and (b) any other Person, including, without limitation, a joint
venture, in which such Person, one or more Subsidiaries thereof or such Person
and one or more Subsidiaries thereof, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest entitled to vote
in the election of directors, managers, general partners or trustees thereof (or
other Person performing similar functions) or, if such Persons are not elected,
to vote on any matter that is submitted to the vote of all Persons holding
ownership interests in such entity, and (c) a corporation or any other Person
substantially all the equity interest in which (whether or not a voting
interest) is at the time, directly or indirectly, owned by such Person, by one
or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof. For purposes of this definition, any directors' qualifying
shares or investments by foreign nationals mandated by applicable law shall be
disregarded in determining the ownership of a Subsidiary. Unless the context
clearly indicates otherwise, references to Subsidiaries are to Subsidiaries
(direct or indirect) of the Company.
"Subsidiary Guarantee" means, collectively, Article XXI of this Note
Agreement and an agreement, in form and substance satisfactory to the Required
Holders, whereby a Restricted Subsidiary agrees to be bound by the terms of
Article XXI of the Note Agreement.
"Subsidiary Guarantor" means each of the Company's Subsidiaries, if any,
executing a Subsidiary Guarantee.
"Timber" means all crops and all trees, timber, whether severed or
unsevered and including standing and down timber, stumps and cut timber, and
logs, wood chips and other forest products, whether now located on or hereafter
planted or growing in or on the Timberlands or otherwise or now or hereafter
removed from the Timberlands or otherwise for sale or other disposition.
"Timberlands" means, at any date of determination, all real property
owned by or leased to the Company that is suitable for Timber production.
"Unrestricted Subsidiary" means any Subsidiary of the Company or a
Restricted Subsidiary that is designated as such by the General Partner,
provided that no portion of the Debt or any other obligation (contingent or
otherwise) of such Subsidiary (a) is guaranteed by the Company or any Restricted
Subsidiary, (b) is recourse to or obligates the Company or any Restricted
Subsidiary in any way or (c) subjects any property or assets of the Company or
any Restricted Subsidiary, directly or indirectly, contingently or otherwise, to
the satisfaction thereof. Notwithstanding the foregoing, the Company or a
Restricted Subsidiary may Guarantee or agree to provide funds for the payment or
maintenance of, or otherwise become liable with respect to Debt of an
Unrestricted Subsidiary, but only to the extent that the Company or a Restricted
Subsidiary would be permitted to (a) make
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an Investment in an amount equal to the Debt represented by such Guaranty or
agreement in such Unrestricted Subsidiary pursuant to subdivision (c) of the
definition of Permitted Investments and (b) incur the Debt represented by such
Guaranty or agreement pursuant to Section 10.1. The General Partner may
designate an Unrestricted Subsidiary to be a Restricted Subsidiary, provided
that immediately after giving effect to such designation (a) there exists no
Default or Event of Default, and (b) if such Unrestricted Subsidiary has, as of
the date of such designation, outstanding Debt (other than Permitted Debt), the
Company could incur at least $1.00 of Debt (other than Permitted Debt).
Notwithstanding the foregoing, no Subsidiary may be designated an Unrestricted
Subsidiary if such Subsidiary, directly or indirectly, holds Capital Stock of a
Restricted Subsidiary.
"Voting Stock" means, (i) Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the directors (or Persons performing similar functions) or
(ii) in the case of a partnership, limited liability company or joint venture,
interests in the profits or capital thereof entitling the holders of such
interests to approve major business actions.
"Weighted Average Life to Stated Maturity" means, when applied to any
Debt at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Debt; provided, however, that with respect to any revolving Debt,
the foregoing calculation of Weighted Average Life to Stated Maturity shall be
determined based upon the total available commitments and the required
reductions of commitments in lieu of the outstanding principal amount and the
required payments of principal, respectively.
"Wholly-Owned Restricted Subsidiary" means any Subsidiary of the Company
of which 99% of the outstanding Capital Stock is owned by the Company or by one
or more Wholly-Owned Restricted Subsidiaries of the Company or by the Company
and one or more Wholly-Owned Restricted Subsidiaries of the Company. For
purposes of this definition, any directors' qualifying shares or investments by
foreign nationals mandated by applicable law shall be disregarded in determining
the ownership of a Subsidiary.
"Working Capital Facility" means the working capital facility of the
Company provided for in the Credit Agreement and any similar facility or
facilities, including a commercial paper facility.
"Working Capital Principal Amount" means $100,000,000.
"Yield to Maturity" is defined in Section 1.2.
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