SUBSCRIPTION BOOKLET - UNITS OF LIMITED PARTNERSHIP INTERESTS HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
Dated as of January 20, 2012
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Table of Contents
Page
ARTICLE 1
DEFINITIONS 1
ARTICLE 2
CONTINUATION OF LIMITED PARTNERSHIP.........................................................................9
2.1 Continuation ..............................................................................................9
2.2 Partnership Name..................................................................................... 10
2.3 Certificate and Related Matters.................................................................. 10
2.4 Principal Business Office, Registered Office and Registered Agent................. 10
2.5 Term of Partnership.................................................................................. 10
2.6 Purposes.................................................................................................. 10
2.7 Powers.................................................................................................... 10
2.8 Policies.................................................................................................... 11
ARTICLE 3
CAPITALIZATION.............................................................................................................. 13
3.1 Units ....................................................................................................... 13
3.2 Capital Contributions................................................................................. 13
3.3 Capital Accounts....................................................................................... 13
3.4 Transfer of Capital Accounts...................................................................... 14
3.5 Deficit Capital Accounts............................................................................. 14
ARTICLE 4
BOOKS; ACCOUNTING; TAX ELECTIONS; REPORTS; Appraisals.............................,.............. 14
4.1 Books and Records................................................................................... 14
4.2 Required Reports....................................................................................... 15
4.3 Appraisals................................................................................................ 16
4.4 Filing of Returns and Other Writings; Tax Matters ....................................... 16
4.5 Bank Accounts; Interim Investments.......................................................... 16
4.6 Title to Assets .......................................................................................... 17
ARTICLE 5
ALLOCATIONS 17
5.1 Allocations of Profits and Losses ................................................................ 17
5.2 Special Allocations.................................................................................... 17
5.3 Curative Allocations .................................................................................. 18
5.4 Other Allocation Rules............................................................................... 19
5.5 Tax Allocations; Code Section 704(c).......................................................... 19
ARTICLE 6
DISTRIBUTIONS20
6.1 Distributions Other Than in Liquidation.......................................................20
6.2 Distributions in Liquidation ........................................................................21
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ARTICLE 7
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS; ADVISORY COMMITTEE ......................22
7.1 Admission; Limited Liability .......................................................................22
7.2 No Control ................................................:..............................................22
7.3 Selection of the Advisory Committee ..........................................................22
7.4 Action by the Advisory Committee..............................................................23
7.5 Functions of the Advisory Committee .........................................................23
7.6 Indemnification of the Advisory Committee.................................................23
ARTICLE 8
RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNER.....................................................23
8.1 In General ...............................................................................................23
8.2 Powers and Duties....................................................................................24
8.3 Reliance by Third Parties...........................................................................26
8.4 Liability for Acts or Omissions and Indemnification ......................................27
8.5 Compensation and Reimbursement of General Partner ................................27
8.6 Other Interests of the General Partner and its Affiliates ...............................27
8.7 Resolution of Conflicts of Interest ..............................................................28
8.8 Withdrawal of General Partner...................................................................28
8.9 Consequences of Withdrawal.....................................................................28
8.10 Appointment of Successor General Partner .................................................29
ARTICLE 9
TRANSFERS OF UNITS, ETC. .............................................................................................29
9.1 Restrictions on Transfer............................................................................29
9.2 General Restrictions..................................................................................29
9.3 Assignment..............................................................................................31
9.4 Admission of Assignees.............................................................................32
9.5 Requirements Applicable to All Assignments................................................32
9.6 Substitution .............................................................................................33
9.7 Rights of Successors of a Limited Partner on Bankruptcy, Insolvency, Etc......34
9.8 Status of an Assigning Limited Partner .......................................................34
9.9 Withdrawal of Limited Partner ...................................................................34
9.10 Legend....................................................................................................34
ARTICLE 10
TERMINATION 34
10.1 Dissolution...............................................................................................34
10.2 Liquidation and Cancellation of Certificate...................................................36
ARTICLE 11
MEETING AND VOTING RIGHTS OF LIMITED PARTNERS.....................................................36
11.1 Meetings..................................................................................................36
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11.2 Action Without Meeting.............................................................................37
11.3 Voting Rights of Limited Partners...............................................................37
ARTICLE 12
POWER OF ATTORNEY; AMENDMENTS ..............................................................................38
12.1 Power of Attorney ....................................................................................38
12.2 Power Coupled With an Interest ................................................................38
ARTICLE 13
FAILURE BY LIMITED PARTNERS TO MAKE CAPITAL CONTRIBUTIONS.................................39
ARTICLE 14
PIGGYBACKREGISTRATION..............................................................................................40
14.1 Definitions ...............................................................................................40
14.2 Right to Piggyback....................................................................................40
14.3 Priority on Primary Registrations................................................................40
14.4 Priority on Secondary Registrations............................................................41
14.5 Selection of Underwriters..........................................................................41
14.6 Registration Procedures ............................................................................41
14.7 Registration Expenses...............................................................................43
ARTICLE 15
MISCELLANEOUS..............................................................................................................44
15.1 Notices....................................................................................................44
15.2 Word Meanings........................................................................................44
15.3 Binding Provisions ....................................................................................45
15.4 Applicable Law.........................................................................................45
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15.5 Nature of Units......... ..............................................................................45
15.6 Separability of Provisions...........................................................................45
15.7 Section Titles ...........................................................................................45
15.8 Further Assurances...................................................................................45
15.9 Entire Agreement .....................................................................................45
15.10 Waiver.....................................................................................................45
15.11 Amendments............................................................................................46
15.12 Additional Limited Partners........................................................................47
15.13 Agreement in Counterparts .......................................................................47
15.14 Partition...................................................................................................47
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Schedules and Exhibits
Schedule 1 List of Names, Addresses and Units of Limited Partners
Exhibit A Form of Advisory Agreement
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HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT dated as of
January 20, 2012 of HANCOCK TIMBERLAND XI LP (the "Partnership") is entered into by and
among John Hancock Timber Resource Corporation, a Delaware corporation, as general.
partner (the "General Partner"), Hancock Natural Resource Group, Inc., a Delaware corporation,
as the initial limited partner ( "HNRG") and the Persons listed on Schedule 1 as limited partners
(each a "Limited Partner" and collectively with the General Partner, the "Partners").
RECITALS
WHEREAS, HNRG and the General Partner entered into an Agreement of Limited
Partnership dated as of December 8, 2010 (the "Original Agreement") for the formation of the
Partnership under and pursuant to the Delaware Revised Uniform Limited Partnership Act,
6 Del. C. § 17-101 et se g. (as from time to time amended and including any successor statute of
similar import, the "Act') which was formed by filing the Partnership's certificate of limited
partnership (as amended, restated and supplemented from time to time, the "Certificate") with
the Secretary of State of the State of Delaware on December 8, 2010 and;
WHEREAS, as of the date of this Agreement, the Partnership has not conducted any
business or made any distributions to HNRG, and HNRG has not made any contribution of cash
or property to the Partnership;
WHEREAS, the Partners and HNRG desire to amend and restate the Original
Agreement to (/) ratify the formation of the Partnership, (il) effect the admission of the Limited
Partners to the Partnership and the withdrawal of HNRG on the date of this Agreement, and (iii)
set forth the parties' respective rights and duties on the terms provided in this Agreement; and
WHEREAS, this Agreement shall supersede the Original Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto do hereby amend and restate the Original Agreement in its entirety and agree as
follows:
ARTICLE 1
DEFINITIONS
Certain capitalized terms used in this Agreement shall have the meanings set forth
below or in the section of this Agreement referred to below:
"5/50% Rule": ownership of not more than 50% in value of the Partnership's REIT
Subsidiary within the meaning of Section 856(h) of the Code by any five or fewer individuals
(and Persons treated as individuals for such purpose). In applying the foregoing determination,
the REIT Subsidiary shall be treated as 100% owned by the Partnership, whether or not it is so
owned and whether or not it has yet been formed.
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"Accountants": Ernst& Young, LLP, Boston, Massachusetts or a successor thereto, or
another firm of independent certified public accountants selected by the General Partner.
"Acquisition Period": the period beginning with the date of this Agreement and ending
two years following the closing date unless extended by the General Partner for one additional
year and for a second additional year with the Consent of the Limited Partners.
"Act": see the recitals.
"Adjusted Capital Account Balance": with respect to any Limited Partner, the balance, if
any, in such Limited Partner's Capital Account as of the end of the relevant Fiscal Period
determined after: (J) crediting to such Capital Account any amounts that such Limited Partner is
obligated to restore thereto hereunder or is deemed to be obligated to restore thereto pursuant
to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) debiting to such Capital Account the items described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted Capital
Account Balance is intended to comply with the provisions of Regulations
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Advisory Agreement": see Section 8.2(d).
"Advisory Committee": see Section 7.3.
"Affiliate": as to any Person, any other Person directly or indirectly controlling, controlled
by or under common control"with such Person; one Person shall be deemed to be in control of a
second Person if it owns beneficially, directly or indirectly, more than 50% of the voting
securities or has the right to appoint a majority of the directors of, or similar control over, the
second Person.
"Agreement": this amended and restated limited partnership agreement, including all
schedules and exhibits hereto, as it or they may be amended, restated or supplemented from
time to time, as herein provided.
"Assign" and "Assignment": with respect to any Unit, to offer, sell, assign, transfer, give
or otherwise dispose of, whether voluntarily or by operation of law, including an assignment in
connection with a lien, encumbrance, pledge, or hypothecation, and any of the aforesaid
transactions involving any portion of a Unit. An Assignment of the Units shall include an Indirect
Assignment.
"Assigned Units": see Section 9.3.
"Assigning Limited Partner": see Section 9.2(c).
"Assignment Notice": see Section 9.3.
"Attorney": see Section 12.1.
"Book Gain" or"Book Loss": the gain or loss recognized by the Partnership for book
purposes in any Fiscal Period by reason of a sale or disposition of any assets of the
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Partnership. Such Book Gain or Book Loss shall be computed by reference to the Book Value
of such assets as of the date of such sale or disposition, rather than by reference to the tax
basis of such assets as of such date, and each and every reference herein to "gain" or"loss"
shall be deemed to refer to Book Gain or Book Loss, rather than to tax gain or tax loss, unless
the context manifestly requires otherwise.
"Book Value": shall mean, with respect to any asset, the asset's adjusted basis for
United States federal income tax purposes, except as follows:
(i) The initial Book Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset, as determined by the
General Partner;
(ii) The Book Values of all Partnership assets shall be adjusted to equal their
respective gross fair market values as determined by the General Partner as of the
following times: (A) the acquisition of an additional interest in the Partnership by any new
or existing Partner in exchange for more than a de minimis Capital Contribution; (B) the
distribution by the Partnership to a Partner of more than a de minimis amount of property
as consideration for an interest in the Partnership; (C) the liquidation of the Partnership
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (D) in connection with
the grant of an interest in the Partnership (other than a de minimis interest) as
consideration for the provision of services to or for the benefit of the Partnership by an
existing Partner acting in a partner capacity, or by a new Partner acting in a partner
capacity in anticipation of being a Partner; provided, however, that adjustments pursuant
to clauses (A), (B), and (D) above shall be made only if the General Partner reasonably
determines that such adjustments are necessary or appropriate to reflect the relative
economic interests of the Partners in the Partnership;
(iii) The Book Value of any Partnership asset distributed to any Partner shall
be adjusted to equal the gross fair market value of such asset on the date of distribution
as determined by the General Partner; and
(iv) The Book Values of Partnership assets shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section
734(b) or Section 743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to (A) Regulations Section 1.704-
1(b)(2)(iv)(m) and (B) subparagraph (vi) of the definition of"Profits" and "Losses" in
Article 1 or Section 5.2(e), provided, however, that Book Values shall not be adjusted
pursuant to this subparagraph (iv) to the extent the General Partner determines that an
adjustment pursuant to subparagraph (ii) is necessary or appropriate in connection with
a transaction that would otherwise result in an adjustment pursuant to this subparagraph
(iv).
If the Book Value of an asset has been determined or adjusted pursuant to subparagraphs (i),
(ii), or (iii), such Book Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Profits and Losses.
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"Business Day": any day excluding a Saturday, Sunday and any other day that is a legal
holiday or other day on which banking institutions in the Commonwealth of Massachusetts are
authorized by law or executive action to close.
"Capital Account": see Section 3.3.
"Capital Contribution": the total amount of Cash and the fair market value of any
property contributed to the Partnership by a Partner pursuant to Section 3.2. For the avoidance
of doubt, such term shall not include any interest or reimbursed expenses collected by the
Partnership from a Partner pursuant to Sections 4.2(d), 6.1(c), 6.2(c), 9.5(c), or 9.6(c) or Article
13 or similar provisions of this Agreement.
"Cash": United States dollars in immediately available funds.
"Certificate see the recitals.
"Code": the United States Internal Revenue Code of 1986, as amended from time to
time, and any subsequent federal law of similar import, and, to the extent applicable, any
Regulations promulgated thereunder.
"Consent": the consent of Limited Partners holding at least 66.67% of the Pro Rata
Percentages of all of the Limited Partners given in writing in accordance with Section 11.2 or by
vote at a meeting called and held in accordance with Section 11.1.
"Counsel": Sullivan &Worcester LLP, Boston, Massachusetts, or another law firm
selected by the General Partner.
"Depreciation": for each Fiscal Period, an amount equal to the depreciation, depletion,
amortization or other cost recovery deduction allowable with respect to an asset for such period;
provided, however, that if the Book Value of an asset differs from its adjusted basis for United
States federal income tax purposes at the beginning of such period, Depreciation shall be an
amount that bears the same relationship to the Book Value of such asset at the beginning of
such period as the depreciation, depletion, amortization, or other cost recovery deduction
computed for tax purposes with respect to such asset for-such period bears to the adjusted tax
basis of such asset at the beginning of such period, or if such asset has a zero adjusted tax
basis, Depreciation shall be an amount determined under any reasonable method selected by
the General Partner.
"Distributable Cash": for any relevant period, the excess of: (i) cash receipts, including
the proceeds of any dispositions of Timberland Investments, and any amounts removed from
reserves; over (ii) cash disbursements for the Partnership's expenses (including all fees paid to
any Affiliate of the General Partner) or liabilities, including any amounts added to working capital
and other reserves to fund the operations and expenses of the Partnership, including for
contingencies and anticipated obligations, and any amounts added to reserves for repayment of
indebtedness.
"Distribution Notice": see Section 6.2(c).
"Election Notice": see Section 9.3.
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"Entity": any general partnership, limited partnership, limited liability company,
corporation, joint venture, limited liability partnership, trust, business trust, estate, cooperative,
association or governmental unit.
"Fiscal Period": an accounting period for which the Profit or Loss of the Partnership is
computed. The first Fiscal Period of the Partnership commenced January 20, 2012. Thereafter,
each Fiscal Period shall commence on the day immediately following the last day of the
immediately preceding Fiscal Period. Each Fiscal Period shall end on the earliest to occur after
the commencement of such Fiscal Period of: (i) the last day of a Fiscal Year of the Partnership;
(ii) immediately prior to (a) the "liquidation" (within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g)) of any Partner's Units, or (b) a change in the Pro Rata Percentage
of any Partner, including the admission of a new Partner or the withdrawal of a Partner; or
(iii) the date on which the Partnership is terminated pursuant to the provisions of Article 10.
"Fiscal Year": except as may be otherwise determined from time to time by the General
Partner or as otherwise required by the Code, the calendar year.
"GAAP": generally accepted accounting principles as in effect from time to time in the
United States.
"General Partner": John Hancock Timber Resource Corporation, a Delaware
corporation, or any Person who subsequently becomes an additional or substitute general
partner in accordance with this Agreement, in such Person's capacity as a general partner of
the Partnership. The General Partner shall constitute a "general partner" of the Partnership
within the meaning of the Act.
"HNRG": seethe preamble.
"Indirect Assignment": means an event other than a direct Assignment of Units that
would result in the direct or indirect beneficial ownership of a majority of the equity of the Limited
Partner being held by a Person other than (i) the Person which beneficially owned, directly or
indirectly, a majority of the equity of the Limited Partner at the time the Limited Partner was
admitted to the Partnership ("Limited Partner Ultimate Parent") or (ii) any Person, directly or
indirectly, controlled by the Limited Partner Ultimate Parent.
"In Kind Distribution": see Section 6.2(c).
"Interim Investments": (i) dollar denominated time deposits, certificates of deposit and
bankers acceptances maturing not more than one year after the date of purchase, issued by a
commercial banking institution having, or which is the principal banking Subsidiary of a bank
holding company having, combined capital and surplus and undivided profits of not less than
$200 million and a commercial paper rating of"P 1" (or higher) according to Moody's Investors
Services, Inc. ("Moody's"), "A 1" (or higher) according to Standard & Poor's Corporation ("W")
or the equivalent rating by any other nationally recognized rating agency; or (ii) demand
deposits with any bank or trust company maintained in the ordinary course of business.
"Limited Partner" or"Limited Partners": the Persons listed as limited partners on
Schedule 1, together with any Person who is admitted as a Substitute Limited Partner in
accordance with this Agreement.
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"Non-Assigning Limited Partners": see Section 9.3.
"Nonrecourse Deductions": has the meaning set forth in Regulations Section 1.704-
2(b)(1) and 1.704-2(c).
"Nonrecourse Liability": has the meaning set forth in Regulations Section 1.704-2(b)(3).
"Notice": see Section 15.1(a).
"Original Agreement": see the recitals.
"Overdue Rate": an amount (at a per annum interest rate) equal to the lesser of(i) four
percent (4%) plus the Prime Rate, or (h) the highest rate permitted by law.
"Parent": see Section 9.3.
"Partner": the General Partner and any Limited Partner.
"Partner Nonrecourse Debt": has the meaning set forth in Regulations Section 1.704-
2(b)(4).
"Partner Nonrecourse Debt Minimum Gain": means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such
Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance
with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Deductions": has the meaning set forth in Regulations Sections
1.704-2(i)(1) and 1.704-2(i)(2).
"Partnership": see the preamble.
"Partnership Minimum Gain": has the meaning set forth in Regulations Sections 1.704-
2(b)(2) and 1.704-2(d).
"Pension-Held REIT": ownership by any single "qualified trust" (as defined in Section
856(h)(3)(E) of the Code) of more than 25% by value of the REIT Subsidiary's outstanding stock
or ownership by five or fewer "qualified trusts" (as so defined), each of which owns more than
10% by value of the REIT Subsidiary's stock, of more than 50% by value of the REIT
Subsidiary's outstanding stock, all as determined by the REIT Subsidiary's directors (or by the
General Partner, if the REIT Subsidiary has not yet been formed). In applying the foregoing
determination, (x) the REIT Subsidiary shall be treated as 100% owned by the Partnership,
whether or not it is so owned and whether or not it has yet been formed, and (y) the REIT
Subsidiary's directors or the General Partner, as applicable, in their sole and absolute discretion
may include indirect ownership, through other Persons, as within the scope of ownership.
"Person": any individual or Entity, and the heirs, executors, administrators, legal
representatives, successors and assigns of such individual or Entity where the context so
admits.
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"Prime Rate": the prime rate as reported in The Wall Street Journal from time to time.
"Profits and Losses": for each Fiscal Year or other Fiscal Period, an amount equal to the
taxable income or loss of the Partnership for such year or period, determined in accordance with
Code Section 703(a) (provided that for this purpose, all items of income, gain, loss, or,deduction
required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:
(i) Any income of the Partnership that is exempt from United States federal
income tax and not otherwise taken into account in computing Profit or Loss pursuant to
this provision shall be added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in
computing Profit or Loss pursuant to this provision, shall be subtracted from such
taxable income or loss;
(iii) In the event the Book Value of any Partnership asset is adjusted pursuant
to subparagraphs (ii) or (iii) of the definition of"Book Value," the amount of such
adjustment shall be taken into account as gain or loss from the disposition of such asset
for purposes of computing Profits or Losses;
(iv) Book Gain or Book Loss shall be taken into account in lieu of any tax gain
or tax loss recognized by reason of any sale or disposition of an asset;
(v) In lieu of the depreciation, depletion, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation for such year or period, computed as provided in this
Agreement;
(vi) To the extent an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Code Section 734(b) is required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a
result of a distribution other than in liquidation of a Partner's interest in the Partnership,
the amount of such adjustment shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and shall be taken into account for purposes of
computing Profits or Losses; and
(vii) Notwithstanding any other provision of this definition of"Profits" and
"Losses," any items that are specifically allocated pursuant to Section 5.2 or Section 5.3
shall not be taken into account in computing Profits or Losses.
The amounts of the items of Partnership income, gain, loss, or deduction available to be
specially allocated pursuant to Sections 5.2 and 5.3 shall be determined by applying rules
analogous to those set forth in subparagraphs (i) through (vi) above.
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"Pro Rata Percentage": the percentage obtained by multiplying 100 by the decimal
obtained by dividing (J) the Capital Account of a Limited Partner, by (h) the aggregate Capital
Accounts of all Limited Partners. In determining Pro Rata Percentages, Capital Accounts shall
not be adjusted for Tax Advances until such Tax Advances are extinguished by distributions as
provided in Section 6.1(c). In determining Pro Rata Percentages, the General Partner shall
have full authority and discretion (but no obligation) to credit a defaulting Limited Partner whose
Capital Contribution is paid, or is to be paid, out of future distributions in accordance with Article
13.
"Purchasers": see Section 9.3.
"Qualified Assignee": a Person or Entity, in the sole determination of the General
Partner: (i) whose ownership of Units in the Partnership would not disadvantage any other
Partner from a tax perspective or cause a breach or default under any covenant or agreement to
which the Partnership is a party; (ii) which does not have interests adverse to the Partnership,
competitive or otherwise; (iii) which is or agrees to become a party to each agreement relating
to the assigned Units to which the assignor thereof was a party and (iv) which is a "qualified
purchaser" (as defined in Section 2(a)(51) of the Investment Company Act of 1940, as
amended).
"Registration": the registration of the Units under the Securities Act and causing such
shares to be listed on a National Securities Exchange, including the NASDAQ Stock Market, by
December 31, 2025.
"Regulations": the federal income tax regulations promulgated under the Code, as such
Regulations may be amended from time to time. All references herein to specific sections of the
Regulations shall be deemed also to refer to any corresponding provisions of succeeding
Regulations, and all references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
"Regulatory Allocations": see Section 5.3.
°REIT Subsidiary": see Section 9.2(a).
"Response Notice": see Section 6.2(c).
"SEC": the United States Securities and Exchange Commission.
"Securities Act": the United States Securities Act of 1933, as amended, and all rules and
regulations promulgated thereunder.
"Subsidiary": any Person more than 50% of the equity securities of which is owned,
directly or indirectly through one or more intermediaries, by another Person.
"Substitute Limited Partner": a Person who becomes a Limited Partner pursuant to
Section 9.6.
"Tax Advance": shall mean, collectively, (i) any amount of tax, including interest and
penalties thereon, withheld at source and paid over to a taxing jurisdiction in respect of accruals
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or payments to or for the account of the Partnership (including, as applicable, through the
Partnership's Subsidiaries), or (ii) any amount of tax, including interest and penalties thereon,
that the General Partner is required (or, in the General Partner's reasonable discretion under
Section 6.1(c), chooses) to retain or withhold for purposes of remitting the same to a taxation
jurisdiction on behalf of or with respect to one or more Limited Partners, and which in either
such case is disproportionately allocable among the Limited Partners on account of the
organization, treaty residence or other status (or lack thereof) of one or more particular Limited
Partners. Tax Advances may also include (but shall not be limited to) obligations that the
Partnership incurs, or is expected soon to incur, in respect of withholding taxes imposed on any
Limited Partner's share of Profit or gross or net income and gains (or items thereof).
"Tax Matters Partner": see Section 4.4.
"Timberland": commercial timberland properties including fee ownership and leasehold
interests in timber producing real estate, timber cutting contracts and other rights related to
timber within and outside the United States.
"Timberland Investments": investments in Timberland and Timberland Securities
consistent with the Investment Guidelines set forth in the Advisory Agreement, whether made by
the Partnership directly or through one or more Subsidiaries; provided that Timberland
Investments shall be located in at least two of the three primary geographic regions of the
United States where commercial timberland production is located (including the Pacific
Northwest, the Northeast and the South) and not more than 50% of the Timberland Investments
may be outside the United States.
"Timberland Securities": securities (both debt and equity) of a direct or indirect owner of
Timberland managed, directly or indirectly, by HNRG or controlled by the Partnership or any of
its Affiliates, provided, Timberland Securities shall not include any publicly traded securities.
"Unit": a unit of limited partnership interest in the Partnership representing a
commitment to make a Capital Contribution to the Partnership of up to US$100,000. Fractional
portions of a Unit may be used to represent the limited partnership interests as necessary. The
Unit(s) owned by a Limited Partner represent the entire ownership interest of a Limited Partner
in the Partnership at any particular time, but excluding any claims which such Limited Partner
may have against the Partnership as a creditor.
"USPAP": The Uniform Standards of Professional Appraisal Practice of the Appraisal
Standards Board of The Appraisal Foundation.
"Withdrawal" and "Withdraw": the voluntary or involuntary withdrawal of a General
Partner, and to effect the voluntary withdrawal or involuntary withdrawal of a General Partner,
respectively.
ARTICLE 2
CONTINUATION OF LIMITED PARTNERSHIP
2.1 Continuation. The parties, by execution of this Agreement, hereby agree to
continue the Partnership as a limited partnership under and pursuant to the Act and to amend
and restate the Original Agreement. Each party represents and warrants that it is duly
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authorized to join in this Agreement and that the Person executing this Agreement on its behalf
is duly authorized to do so.
2.2 Partnership Name. The name of the Partnership shall be: Hancock Timberland
XI LP. The business of the Partnership shall be conducted under such name or such other
name or names as the General Partner may from time to time select; rop vided, however, that in
no event shall the name of any Partner or any Affiliate of any Partner, or any variant thereof, be
used in or as any part of the name of the Partnership without the consent of such Partner or
Affiliate.
2.3 Certificate and Related Matters. The Limited Partners hereby agree to execute,
and the General Partner agrees to file and record, all such certificates and documents, including
amendments to the Certificate, and to do such other acts as may be appropriate to comply with
all requirements for the formation, continuation and operation of a limited partnership, the
ownership of property, and the conduct of business under the laws of the State of Delaware and
any other jurisdiction in which the Partnership may own property or conduct business, including
qualifying the Partnership as a foreign limited partnership in any state in which such qualification
is required.
2.4 Principal Business Office Registered Office and Registered Agent. The principal
business office of the Partnership will be located at 99 High Street, 26th floor, Boston,
Massachusetts 02110-2320, or at such other location as may hereafter be determined by the
General Partner. The address of the registered office in the State of Delaware is
2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808-1645. The
name and address of the registered agent for service of process on the Partnership in the State
of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington,
New Castle County, Delaware 19808-1645. The principal business office, the registered office
and the registered agent of the Partnership may be changed from time to time by the General
Partner and in accordance with the then applicable provisions of the Act and any other
applicable laws. The General Partner shall promptly notify the Partners of any such changes.
2.5 Term of Partnership. The term of the Partnership commenced on December 8,
2010, and unless the Partnership is sooner dissolved and terminated pursuant to the provisions
of Article 10, shall continue in perpetuity.
2.6 Purposes. The purposes of the Partnership are to purchase, acquire, develop,
improve, lease, maintain, own, operate, manage, mortgage, hold, sell, exchange, dispose of
and otherwise deal in and with Timberland Investments.
2.7 Powers. In furtherance of its purposes, but subject to all of the provisions of this
Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall have
the power and is hereby authorized:
(a) to acquire and dispose of real and personal property, as may be necessary,
appropriate, convenient or incidental to the accomplishment of the purposes of
the Partnership;
(b) to organize one or more Subsidiaries to hold real and personal property;
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(c) to borrow money and to issue evidences of indebtedness, in each case in
furtherance of the purposes of the Partnership, and to prepay, extend, renew or
modify any such evidence of indebtedness;
(d) to enter into such contracts, agreements and instruments as may be necessary
or advisable in furtherance of the purposes of the Partnership;
(e) to invest any funds of the Partnership pending distribution or payment of the
same pursuant to the provisions of this Agreement;
(f) to enter into the Advisory Agreement and otherwise engage HNRG and other
Persons to provide services to the Partnership and to enter into contracts and
agreements with such Persons, including Affiliates, in furtherance of the
purposes of the Partnership;
(g) to enter into partnerships or other ventures with other Persons in furtherance of
the purposes of the Partnership; and
(h) to do such other things and engage in such other activities related to the
foregoing as may be necessary, convenient or advisable with respect to the
conduct of the business of the Partnership, and have and exercise all of the
powers and rights conferred upon limited partnerships formed pursuant to the
Act.
2.8 Policies.
(a) Acquisitions. The Partnership expects to acquire substantially all Timberland
Investments through one or more Subsidiaries. The Partnership will make
investments in the United States either through the REIT Subsidiary, or, if the
General Partner determines that the REIT Subsidiary is not the appropriate
acquisition vehicle, directly or indirectly through an entity treated as a corporation
for United States federal income tax purposes. The Partnership will make
investments in jurisdictions outside of the United States either through a foreign
entity treated as a corporation for United States federal income tax purposes,or
through a chain of foreign entities that includes at least one subsidiary treated as
a corporation for United States federal income tax purposes, assuming the
Partnership holds its investment through such subsidiary. The General Partner
will use commercially reasonable efforts to avoid or minimize any potential
taxation of the REIT Subsidiary under Section 857(b)(6) of the Code.
(b) Borrowing. The Partnership may borrow funds for working capital purposes. The
Partnership expects its Subsidiaries to borrow funds for acquisitions (and
refinancing) of Timberland Investments and working capital purposes. The
principal amount of any such debt shall not exceed 55% of the then current
market value of the Timberland Investment securing such debt and the
aggregate principal amount of all debt then outstanding shall not exceed 35% of
the greater of the then current market value of all Timberland Investments and
the aggregate commitments to make Capital Contributions. Entities in which the
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Partnership or its Subsidiaries have purchased Timberland Securities and have a
controlling interest will be subject to the same debt restrictions, provided the
foregoing percentages shall not apply to debt of the Partnership or its
Subsidiaries or entities in which they have purchased Timberland Securities (or
liens on Timberland owned by such Subsidiaries or entities) to the extent that
such debt is evidenced by notes payable to the Partnership, such Subsidiary or
other entity. The term "debt" as used in this Section 2.8(b) shall not include a
promissory note issued to a seller of Timberland in an "installment sale"where
the Timberland is held in a direct or indirect Subsidiary of the Partnership, the
promissory note issued by such Subsidiary is without recourse to the purchased
Timberland, the promissory note is entitled to the benefits of a letter of credit in
an initial amount at least equal to the principal amount of such promissory note,
the obligation of the Subsidiary to reimburse the issuer of the letter of credit for
drawings thereunder is fully collateralized and such collateral is sufficient to fund
the obligations of the Subsidiary under the promissory note;
(c) Dispositions. Distributable Cash from the disposition of Timberland Investments
before the Partnership effects the Registration will generally be distributed to
Limited Partners and not reinvested, except with respect to disposition or
insurance proceeds received by the Partnership during the Acquisition Period
and disposition or insurance proceeds that may be reinvested tax-free pursuant
to Sections 1031 or 1033 of the Code. Amounts described in the preceding
sentence may be reinvested by the General Partner in its sole discretion.
Notwithstanding anything to the contrary in this Section 2.8(c), the Partnership
shall distribute, promptly following each quarter that falls either fully or partially
within the Acquisition Period, among the Limited Partners in accordance with
Section 6.1(a), an amount of Distributable Cash such that the cumulative amount
distributed pursuant to Section 6.1(a) in respect of the most recently completed
quarter and all prior quarters equals at least thirty-five percent (35%) of the
cumulative "taxable income" (as defined in Section 63 of the Code) of the
Partnership from the date of this Agreement through such most recently
completed quarter, all as reasonably calculated by the General Partner and
ignoring for purposes of such calculation any Partnership expense related to the
payment of the Annual Management Fee as defined in Exhibit D of the Advisory
Agreement. Non-cash proceeds from dispositions of Timberland Investments will
generally be held in kind until the termination of the Partnership. The Partnership
will not invest in, or accept as a distribution on any Timberland Investment, any
securities, except where: (i) it is the intention of the Partnership to own a
controlling interest in a private company, (ii) HNRG is the investment manager of
the issuer of such securities, or (iii) it is the intention of the Partnership to
organize one or more Subsidiaries to hold real and personal property; and
(d) Registration. Rather than disposing of all Timberland Investments pursuant to
Section 10.1(d), the Partnership will effect the Registration upon the
recommendation of the General Partner and the Consent of the Limited Partners.
Not fewer than 30 days prior to any meeting of the Limited Partners at which, or
the distribution of a written consent pursuant to which, Consent of the Limited
Partners is sought to approve the Registration, the General Partner will distribute
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to the Limited Partners a description of the process by which the Registration
would be effected, including the material terms and conditions thereof.
ARTICLE 3
CAPITALIZATION
3.1 Units. The limited partner interests of the Partnership shall be represented by
Units. The general partner interest shall be an undivided interest held by the General Partner.
Each Limited Partner's Units shall be the amount set forth in the subscription agreement
pursuant to which such Limited Partner subscribed for its Units.
3.2 Capital Contributions. Each Limited Partner shall make Capital Contributions to
the Partnership, from time to time at the request of the General Partner, in an amount up to
US$100,000 per Unit. The General Partner shall not make any Capital Contribution in respect
of the General Partner's interest. Fractional portions of a Unit may be used as necessary.
3.3 Capital Accounts. A separate capital account (a "Capital Account") shall be
established and maintained for each Partner, including any substituted or additional Partner who
shall hereafter acquire an interest in the Partnership, in accordance with the following
provisions:
(a) To each Partner's Capital Account there shall be credited the amount of Cash
and the fair market value of any property actually contributed to the Partnership
by such Partner, such Partner's allocable share of Profit, the amount of any
Partnership liabilities that are assumed by such Partner or that are secured by
any property of the Partnership distributed to such Partner, and any items in the
nature of income or gain that are specially allocated to such Partner pursuant to
Section 5.2 or 5.3.
(b) To each Partner's Capital Account there shall be debited the amount of Cash and
the fair market value of any Partnership property distributed to such Partner
pursuant to any provision of this Agreement, such Partner's allocable share of
Loss, the amount of any liabilities of such Partner that are assumed by the
Partnership or that are secured by any property contributed by such Partner to
the Partnership, and any items in the nature of expense or loss that are specially
allocated to such Partner pursuant to Section 5.2 or 5.3.
(c) The provisions of this Agreement relating to the maintenance of Capital Accounts
are intended to comply with Regulations Sections 1.704-1(b)(2)(iv) and 1.704-2
and shall be interpreted and applied in a manner consistent with such
Regulations.
(d) A Partner shall not be entitled to withdraw any part of the Capital Account of such
Partner or to receive any distributions from the Partnership except as provided in
Article 6; nor shall a Partner be entitled to make any loan or Capital Contribution
to the Partnership other than as expressly provided herein. No loan made to the
Partnership by any Partner shall constitute a Capital Contribution to the
Partnership for any purpose, nor shall a payment in respect of principal, interest
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or premium on any such loan constitute a distribution by the Partnership that
reduces such Partner's Capital Account. No loan (including any Tax Advance)
made by the Partnership to any Partner shall constitute a distribution by the
Partnership that reduces a Partner's Capital Account, nor shall a payment in
respect of principal, interest or premium on any such loan constitute a Capital
Contribution to the Partnership for any purpose. No Partner shall be entitled to
the accrual or payment of any interest in respect of its Capital Account:
(e) Except as expressly required by this Agreement or the Act, no Partner shall have
any liability for the return of the Capital Contribution of any other Partner. A
Partner who has more than one Unit in the Partnership shall have a single
Capital Account that reflects all such Units, regardless of the time or manner in
which the Units were acquired.
3.4 Transfer of Capital Accounts. If all or any portion of a Limited Partner's Units is
transferred in accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred interest, and reference
in this Agreement to a Capital Contribution of, or an allocation or distribution to, a Substitute
Limited Partner shall include a Capital Contribution of, or allocation or distribution previously
made to, its transferor Partner on account of the transferred Units.
3.5 Deficit Capital Accounts. Except as required by the Act, no Partner shall be
obligated to restore a deficit balance in such Partner's Capital Account or to make a Capital
Contribution to the Partnership solely by reason of such deficit.
ARTICLE 4
BOOKS; ACCOUNTING; TAX ELECTIONS; REPORTS; APPRAISALS
4.1 Books and Records. The General Partner shall keep, or cause to be kept,
complete and accurate books and records of account of the Partnership. The books of the
Partnership shall be kept on the accrual basis of accounting and in accordance with GAAP, and
all such books and records shall at all times be maintained or made available at the principal
business office of the Partnership. A current list of the full name and last known business
address of each Partner, a copy of the Certificate, including all certificates of amendment
thereto and executed copies of all powers of attorney pursuant to which the Certificate or any
certificate of amendment has been executed, copies of the Partnership's United States federal,
state and local income tax returns and reports, if any, copies of this Agreement, copies of any
financial statements of the Partnership and all other records required to be maintained pursuant
to the Act, shall be maintained at the principal business office of the Partnership during the term
of the Partnership and for six (6) years from the date of termination thereof(or if later, from the
date of final resolution of any dispute among the Partners). In addition, the Partnership shall
furnish a list of the names and addresses of all Partners and the number of Units owned by
each, together with their respective Capital Contributions, to any Limited Partner upon written
request therefor to the Partnership. The General Partner shall have authority to adopt any
reasonable method for converting transactions denominated in foreign currency into U.S. dollars
for purposes of keeping the Partnerships books and records and the determination of any
matters under this Agreement.
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4.2 Required Reports.
(a) Quarterly Reports. Within 60 days after the end of each of the first three quarters
of each Fiscal Year, beginning with the first full quarter after the issuance of
Units, the General Partner shall send to each Person who was a Limited Partner
at any time during the quarter then ended: (i) a consolidated balance sheet
(which need not be audited); (ii) a consolidated statement of operations (which
need not be audited); (iii) a statement of Distributable Cash (which need not be
audited); (iv) a statement describing the amount of all fees and other
compensation and distributions paid by the Partnership or any Subsidiary for
such quarter to the General Partner or any Affiliate of the General Partner; (v) a
report in narrative form summarizing the status of the Partnership's investments;
and (vi) a report of the activities of the Partnership and its Subsidiaries during
such quarter.
(b) Annual Reports. Within 120 days after the end of each Fiscal Year, the General
Partner shall send to each Person who was a Limited Partner at any time during
the Fiscal Year then ended, a report in narrative form summarizing the status of
the Partnership's investments and containing: (J) a consolidated balance sheet
as of the end of such Fiscal Year and consolidated statements of operations,
Partners' equity and changes in financial position for such Fiscal Year, all of
which shall be prepared in accordance with GAAP and accompanied by an
auditor's report containing an opinion of the Accountants; (ii) a statement of
Distributable Cash (which need not be audited); (iii) a report summarizing the
fees and other remuneration paid by the Partnership and its Subsidiaries for such
Fiscal Year to the General Partner or any Affiliate of the General Partner; (iv) a
statement (which need not be audited), showing the Distributable Cash
distributed to the Partners during such Fiscal Year; (v) a report in narrative form
summarizing the status of the Partnership's investments; and (vi) a report of the
activities of the Partnership and its Subsidiaries during such Fiscal Year.
(c) Tax Information. As promptly as possible after the close of each Fiscal Year of
the Partnership, the General Partner shall deliver to each of the Limited Partners
a Schedule K-1 for use in preparing such Limited Partner's United States federal
(and, if applicable, state) income tax returns for the preceding year.
(d) Partner Access to Books and Records. Subject to any privacy policy of the
Partnership, each Limited Partner shall have the right at all reasonable times and
upon reasonable notice during usual business hours to audit, examine and make
copies of or extracts from the books and records of the Partnership. Such right
may be exercised through any agent or employee of such Limited Partner or
other Person designated by it or by a certified public accountant designated by
such Limited Partner. Forthwith upon request, the General Partner shall also
furnish to the Limited Partners such other information bearing on the financial
condition and operations of the Partnership as any Limited Partner may from time
to time reasonably propose. A Limited Partner shall bear all expenses incurred
in any such audit or examination made for such Limited Partner's account, or in
connection with such Limited Partner's request for information hereunder.
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(e) Confidentiality. Each of the Limited Partners, on behalf of such Limited Partner
and its Affiliates, hereby agrees to consider as proprietary to the Partnership,
keep confidential, and not disclose to any third party, any information relating to
the operations of the Partnership which could, if so disclosed, have an adverse
impact on the business of the Partnership, unless such disclosure is: (i) required
in connection with the performance of such Limited Partner's obligations, or the
exercise of such Limited Partner's rights, under this Agreement or under any
other agreement between such Partner and the Partnership;(h) to such Limited
Partner's representatives, counsel or accountants; (iii) necessary in order to
comply with the request or subpoena of a court or governmental agency of
competent jurisdiction, rop vided, however, that any such Limited Partner shall
give the Partnership prompt Notice, to the extent not prohibited by law, of any
such request or subpoena so that the Partnership may seek an appropriate
protective order; (iv) agreed to in writing by the General Partner; (v) information
which at the time of disclosure is in the public domain other than as a result of
any action taken by any Limited Partner in violation of this Agreement or any
other agreement to which any Limited Partner or any Affiliate of a Limited Partner
is a party; or (vi) required by any law or regulation applicable to a Limited
Partner.
4.3 Appraisals. The General Partner will obtain an appraisal for each Timberland
Investment within one year following its acquisition and in each December thereafter using
qualified professional independent appraisers experienced in the appraisal of Timberland.
Where possible, the General Partner will seek to engage appraisers that have received the MAI
designation for professional achievement. These appraisals shall be undertaken in accordance
with the USPAP. The intent of appraisal will be to obtain an estimate of fair market value as
defined in the USPAP. In the General Partner's discretion, the periodic appraisals may be
updates of the most recent prior appraisal to reflect the effect of current market conditions and
property management. Such updates may not reflect the effect of changes which would be
revealed by an on-site examination of Timberland. The General Partner will obtain copies of
independent third party appraisals, and any updates thereof, of Timberland owned by the issuer
or issuers (which are not controlled by the Partnership) of Timberland Securities.
4.4 Filing of Returns and Other Writings; Tax Matters. The General Partner shall
cause the preparation and timely filing of all Partnership tax returns and shall, on behalf of the
Partnership, timely file all other writings required by any governmental authority having
jurisdiction to require such filing. The Partnership may engage the Accountants and Counsel to
assist the General Partner in discharging its duties hereunder. The General Partner, or if the
General Partner is ineligible to serve as such, a person selected by the General Partner which is
so eligible, shall serve as the "Tax Matters Partner" within the meaning of Code
Section 6231(a)(7) and shall make such tax elections and other determinations as it deems
appropriate; provided, however, that the General Partner shall not make (and no Limited Partner
shall make) any election or other filing with any taxing or governmental authority (including but
not limited to an election or filing pursuant to Regulations Section 301.7701-3) that would cause
the Partnership to be classified as an association taxable as a corporation for United States
federal or state income tax purposes.
4.5 Bank Accounts: Interim Investments.
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(a) The bank accounts of the Partnership shall be maintained in such commercial
banks or trust companies organized and existing under the laws of the United
States of America or of any state and meeting the requirements referred to in
clause (i) of the definition of Interim Investments as the General Partner shall
from time to time determine, including, in any so-called "sweep account" pursuant
to which such commercial bank or trust company commingles investments, on an
overnight basis, of residual balances in the investment accounts maintained at
such bank, trust company or Affiliate thereof, and withdrawals shall be made only
in the regular course of Partnership business on such signature or signatures as
the General Partner may from time to time determine.
(b) The Partnership shall from time to time invest funds not required currently for its
operations in Interim Investments.
(c) The funds of the Partnership shall not be commingled with the funds of any other
Person, except that this prohibition shall not prevent the Partnership from
engaging in any venture or investing in any Entity otherwise permitted under this
Agreement.
4.6 Title to Assets. Except to the extent that trustees, nominees or other agents are
used as specified in Section 8.2(b), all assets of the Partnership, whether real or personal,
tangible or intangible, shall be held in the name of the Partnership and deemed to be owned by
the Partnership as an entity, and no Partner, individually, shall have any ownership of such
property.
ARTICLE 5
ALLOCATIONS
5.1 Allocations of Profits and Losses. Subject to the special allocations set forth in
Sections 5.2 or 5.3, Profits and Losses of the Partnership for each Fiscal Period shall be
determined as of the end of such Fiscal Period and shall be allocated among the Limited
Partners in accordance with their respective Pro Rata Percentages at the beginning of such
Fiscal Period, and no Profits or Losses shall be allocated to the General Partner.
5.2 Special Allocations. The following special allocations shall be made in the
following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding any other provision of this Article 5, if there is a net
decrease in Partnership Minimum Gain during any Fiscal Period, each Limited Partner shall
be specially allocated items of Partnership income and gain for such Fiscal Period (and, if
necessary, subsequent Fiscal Periods) in an amount equal to such Partner's share of the net
decrease in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant thereto. The items to
be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6)
and 1.704-20)(2). This Section 5.2(a) is intended to comply with the minimum gain
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chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article 5, if there
is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable to a Partner
Nonrecourse Debt during any Fiscal Period, each Partner who has a share of the Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such Fiscal Period (and, if necessary, subsequent Fiscal
Periods) in an amount equal to such Partner's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be allocated to
each Partner pursuant thereto. The items to be so allocated shall be determined in
accordance with Regulations Sections 1.704-2(i)(4) and 1.704-20)(2). This Section 5.2(b) is
intended to comply with the minimum gain chargeback requirement in Regulations Section
1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Period or other
period shall be specially allocated among the Partners in proportion to their Pro Rata
Percentages.
(d) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for any
Fiscal Period or other period shall be specially allocated to the Partner who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-
2(i)(1)
(e) Code Section 754 Adjustment. To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b) or Section 743(b) is required,
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to
be taken into account in determining Capital Accounts, as a result of a distribution to a Partner
in complete liquidation of his interest in the Partnership, the amount of such adjustment to
Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be
specifically allocated to the Partners in accordance with their interests in the Partnership in the
event Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such
distribution was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
5.3 Curative Allocations. The allocations set forth in Sections 5.2(a), 5.2(b), 5.2(c),
5.2(d), and 5.2(e) hereof(the "Regulatory Allocations") are intended to comply with certain
requirements of the Regulations. It is the intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations or with special
allocations of other items of Partnership income, gain, loss, or deduction pursuant to this
Section 5.3. Therefore, notwithstanding any other provision of this Article 5 (other than the
Regulatory Allocations), the General Partner shall make such offsetting special allocations of
Partnership income, gain, loss, or deduction in whatever manner is determined appropriate so
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that, after such offsetting allocations are made, each Partner's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Partner would have had if the
Regulatory Allocations were not part of the Agreement and all Partnership items were
allocated pursuant to Section 5.1. In exercising the discretion under this Section 5.3, the
General Partner shall take into account future Regulatory Allocations under Sections 5.2(a)
and 5.2(b) that, although not yet made, are likely to offset other Regulatory Allocations
previously made under Sections 5.2(c) and 5.2(d).
5.4 Other Allocation Rules.
(a) Profits, Losses, and any other items of income, gain, loss, or deduction shall be
allocated to the Partners pursuant to this Article 5 as of the last day of each Fiscal Period,
provided that Profits, Losses, and such other items shall also be allocated at such times as
the Book Values of Partnership Property are adjusted pursuant to subparagraph (ii) of the
definition of Book Value in Article 1.
(b) The Partners are aware of the income tax consequences of the allocations made
by this Article 5 and hereby agree to be bound by the provisions of this Article 5 in reporting
their shares of Partnership income and loss for income tax purposes.
(c) For purposes of determining the Profits, Losses, or any other items allocable to
any Fiscal Period, Profits, Losses, and any such other items shall be determined by effecting
an interim closing of the books of the Partnership at the close of business on the day
immediately preceding any change in any Partner's Pro Rata Percentage.
(d) Solely for purposes of determining a Partner's proportionate share of the "excess
nonrecourse liabilities" of the Partnership within the meaning of Regulations Section 1.752-
3(a)(3), the Partners' interests in Partnership profits are in proportion to their Pro Rata
Percentages.
(e) To the extent permitted by Regulations Section 1.704-2(h)(3), the Partners shall
endeavor not to treat distributions of cash as having been made from the proceeds of a
Nonrecourse Liability or a Partner Nonrecourse Debt.
5.5 Tax Allocations; Code Section 704(c). Except as otherwise provided in this
Section 5.5, each item of income, gain, loss and deduction of the Partnership for United States
federal income tax purposes shall be allocated among the Partners in the same manner as
such items are allocated for book purposes under this Article 5. Any tax credits accrued by the
Partnership in any year shall be allocated among the Limited Partners in accordance with their
respective Pro Rata Percentages, and no tax credits shall be allocated to the General Partner;
provided, however, that tax credits relating to a Tax Advance shall be allocated to the Limited
Partner in respect of whose distributions such Tax Advance is to be recouped and extinguished
pursuant to Section 6.1(c). In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss, and deduction with respect to any property contributed to the
capital of the Partnership shall, solely for tax purposes, be allocated among the Partners so as
to take account of any variation between the adjusted basis of such property to the Partnership
for United States federal income tax purposes and its initial Book Value (computed in
accordance with subparagraph (i) of the definition of"Book Value" in Article 1). In the event the
19
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Book Value of any Partnership asset is adjusted pursuant to subparagraph (ii) of the definition
of"Book Value" in Article 1, subsequent allocations of income, gain, loss, and deduction with
respect to such asset shall take account of any variation between the adjusted basis of such
asset for United States federal income tax purposes and its Book Value in the same manner as
under Code Section 704(c) and the Regulations thereunder. Any elections or other decisions
relating to such allocations shall be made by the General Partner in any manner that
reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this
Section 5.5 (other than tax credits relating to Tax Advances) are solely for purposes of United
States federal, state, and local taxes and shall not affect, or in any way be taken into account in
computing, any Partner's Capital Account or share of Profits, Losses, other items, or
distributions pursuant to any provisions of this Agreement. Except as otherwise provided in
this Agreement, all items of Partnership income, gain, loss, deduction, and any other
allocations not otherwise provided for shall be divided among the Partners in the same
proportions as they share Profits or Losses, as the case may be, for the Fiscal Period.
ARTICLE 6
DISTRIBUTIONS
6.1 Distributions Other Than in Liquidation.
(a) Distributions of Distributable Cash. Promptly following the end of each quarter of
each Fiscal Year, beginning with the first full fiscal quarter following the date of
this Agreement, the Partnership shall distribute the Distributable Cash among the
Limited Partners in accordance with their respective Pro Rata Percentages
immediately prior to such Partnership distribution. No Distributable Cash shall be
distributed to the General Partner.
(b) Interim Closing of Books. Any distributions of Distributable.Cash in respect of a
Fiscal Year in which the ownership of Units changes shall be made among the
Limited Partners by effecting a closing of the books of the Partnership on an
interim basis at the close of business on the day immediately preceding any such
change.
(c) Tax Advances. In addition to those Tax Advances withheld at source by third
parties, the General Partner may retain, withhold, or make provision for other Tax
Advances that it determines is advisable for or with respect to one or more
Limited Partners. Promptly upon the General Partner becoming aware of any
Tax Advance withheld at source or upon the retention, withholding or making
other provision for other tax advances, it shall notify the Limited Partners. In its
sole and absolute discretion (but with no obligation to do so), the General Partner
may choose to impose and compute interest on any outstanding Tax Advance, in
any reasonable manner and at any reasonable rate of interest up to the Overdue
Rate (including zero percent), and add such interest to the outstanding Tax
Advance for purposes of extinguishing both the Tax Advance and the interest
thereon out of the next available distributions to the Limited Partner in respect of
whom such Tax Advance and interest is allocable. All Tax Advances (and
interest, if any, imposed by the General Partner with respect thereto) made on
behalf of a Limited Partner shall be treated as an advance to such Limited
20
{B1129935; 12}
Partner to be extinguished by reducing the amount of the current or next
succeeding distribution or distributions that would otherwise have been made to
such Limited Partner. When a Tax Advance (and interest, if any, imposed by the
General Partner with respect thereto) is actually extinguished in this manner,
then for all other purposes of this Agreement such Limited Partner whose
distribution was diminished shall nevertheless be treated as receiving the full
amount of such distribution (undiminished by any amount used to extinguish the
Tax Advance or the interest imposed by the General Partner thereon). When, as
and if recouped by the Partnership in the foregoing manner, any interest imposed
by the General Partner with respect to a previously outstanding Tax Advance (or
portion thereof) shall be treated as Profit of the Partnership to be allocated in
accordance with Article 5. Each Limited Partner hereby agrees to indemnify and
hold harmless the Partnership, the General Partner, and any stockholder,
director or officer of the General Partner from and against any liability with
respect to Tax Advances made or required to be made on behalf of or with
respect to such Limited Partner. In the event the Partnership is liquidated and a
liability is asserted against the General Partner or any stockholder, director or
officer of the General Partner for Tax Advances made or required to be made,
the General Partner shall have the right to be reimbursed from the Limited
Partner on whose behalf such Tax Advance was made or required to be made.
6.2 Distributions in Liquidation.
(a) In General. Upon the liquidation and dissolution of the Partnership in accordance
with Section 10.1, the Partnership shall (J) pay or provide for the payment of all
debts and liabilities of the Partnership, (il) set up such reserves as the General
Partner shall deem to be necessary to provide for any contingent, conditional or
unmatured liabilities or obligations of the Partnership and (iii) distribute the
balance of the property of the Partnership among the Limited Partners in
accordance with their respective Pro Rata Percentages.
(b) Tax Requirements. All payments under this Section 6.2 shall be made as soon
as reasonably practicable and in any event by the end of the taxable year of the
Partnership in which the dissolution of the Partnership occurs or, if later, within
90 days after the date of such dissolution.
(c) In Kind Distributions. If at any time the General Partner determines that a portion
of the Partnership's assets will be distributed "in kind" (any such distribution, an
"In Kind Distribution"), the General Partner shall give the Limited Partners notice
("Distribution Notice") of the intended In Kind Distribution. The Distribution Notice
shall describe the personal property or real estate comprising the In Kind
Distribution to be made to each of the Limited Partners, including in the case of
real estate copies of the most recent appraisal and the most recent
environmental site assessment and a commitment for owner's title insurance, if
applicable, and a statement confirming that any designation has been made in
accordance with HNRG's standard parcelization policy. Within 30 days of the
date of the Distribution Notice, each Limited Partner shall give the General
Partner Notice ("Response Notice") as to whether the Limited Partner intends to
21
{B1129935; 121
take title to the personal property or real estate comprising the In Kind
Distribution directly or in the name of a nominee. The Response Notice will also
advise the General Partner as to whether the Limited Partner will require the
General Partner's assistance in obtaining title insurance and whether the Limited
Partner will require a new appraisal (or update of the most recent appraisal)
and/or a new environmental site assessment (or update of the most recent
environmental site assessment). The In Kind Distribution will be made as soon
as practicable after completion of any appraisal(s) and/or environmental site
assessment(s), as applicable, and after the receipt of any required third-party
consents and any governmental approvals. The cost of recordation fees and title
insurance, if any, will be borne by the Partnership. The cost of appraisal(s) and
environmental site assessment(s) will be borne by the Limited Partner(s)
requiring such appraisal and or environmental site assessment (unless all the
Limited Partners make the request, in which case the cost will be borne by the
Partnership). No In Kind Distributions shall be made to the General Partner.
ARTICLE 7
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS; ADVISORY COMMITTEE
7.1 Admission; Limited Liability.
(a) Admission. Each Limited Partner shall execute and deliver to the General
Partner a subscription agreement, in form reasonably satisfactory to the General
Partner, and/or such other documents as shall be deemed appropriate by the
General Partner.
(b) Limited Liability. Except as otherwise provided by the Act, the debts, obligations
and liabilities of the Partnership, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Partnership, and the
Limited Partners shall not be obligated personally for any such debt, obligation or
liability of the Partnership solely by reason of being partners of the Partnership.
Each of the Limited Partners shall only be liable to make payment of its
respective Capital Contributions as and when due hereunder and other payments
as expressly provided in this Agreement. If and to the extent all Capital
Contributions for a Limited Partner's Units shall be fully paid, such Limited
Partner shall not, except as required by the express provisions of the Act
regarding repayment of sums wrongfully distributed to Limited Partners, be
required to make any further contributions.
7.2 No Control. No Limited Partner shall participate in the management or control of
the business of, or transact any business for, the Partnership. No Limited Partner, in its
capacity as such, shall have the power to act for, sign for or bind the Partnership. No Limited
Partner shall have the right to have the Partnership dissolved or liquidated or to have its Capital
Contributions returned except as provided in this Agreement. Limited Partners shall, however,
have the approval rights expressly set forth elsewhere in this Agreement.
7.3 Selection of the Advisory Committee. The Partnership shall have an advisory
committee (the "Advisory Committee's which shall consist of at least 3 (but no more than 5)
22
{B1129935; 12)
persons, none of whom shall be an employee of the General Partner or of an Affiliate of the
General Partner, who have been designated by certain Limited Partners selected by the General
Partner (none of which shall be an Affiliate of the General Partner). The General Partner will
notify the Limited Partners of the selection of members of the Advisory Committee, whereupon
the Limited Partners may reject any member by Consent within 10 days after receipt of notice
from the General Partner. Any member of the Advisory Committee may resign by giving the
General Partner 30 days' prior written notice. Additionally, the Advisory Committee may, by a
majority vote of its members, remove and replace members of the Advisory Committee from
time to time. Any vacancy in the Advisory Committee (other than filled in accordance with the
prior sentence) shall be promptly filled by the General Partner. Neither any member of the
Advisory Committee (in his or her capacity as a member) nor any Limited Partner which has
designated such member shall have any duty (fiduciary or otherwise) to any Partner in respect
of the activities of the Advisory Committee other than the duty to act in good faith.
7.4 Action by the Advisory Committee. Meetings of the Advisory Committee may be
called by the General Partner on not less than 10 days' notice to the members and shall be so
called upon the request of any two members of the Advisory Committee. The Advisory
Committee shall act by affirmative vote or written consent of a majority of its members and the
recommendation of the Advisory Committee shall be advisory only and shall not obligate the
General Partner to act in accordance therewith.
7.5 Functions of the Advisory Committee. The functions of the Advisory Committee
will be generally (i) to advise the General Partner on such matters, including advice on
Timberland Investments, about which the General Partner may from time to time determine to
consult the Advisory Committee and (ii) to review and advise the General Partner concerning
any potential conflicts of interest of the General Partner. Neither the Advisory Committee nor
any member thereof shall have the power to bind or act for or on behalf of the Partnership in
any manner, and in no event shall a member of the Advisory Committee be considered a
general partner of the Partnership by agreement, estoppel or otherwise as a result of the
performance of his or her duties hereunder or otherwise. Members of the Advisory Committee
shall not receive compensation from the Partnership for their services. The reasonable
expenses of the Advisory Committee shall be expenses of the Partnership.
7.6 Indemnification of the Advisory Committee. To the fullest extent permitted by
law, members of the Advisory Committee shall be indemnified by the Partnership against any
losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained
by them by reason of their activities as members of the Advisory Committee, provided the same
were not the result of a failure to act in good faith. Any claim for indemnification shall be paid
from, and only to the extent of, the assets of the Partnership and no Partner shall have any
personal liability on account thereof.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNER
8.1 In General. Except as expressly limited by the provisions of this Agreement, the
General Partner shall have complete and exclusive discretion in the management and control of
23
{61129935; 12}
the affairs and business of the Partnership and all powers necessary, desirable, convenient or
appropriate to carry out the purposes, conduct the business, exercise the powers and
administer the affairs of the Partnership.
8.2 Powers and Duties.
(a) General. While it is acknowledged that the General Partner is not required to
devote its full time to the business of the Partnership, the General Partner shall
diligently and faithfully exercise its discretion to the best of its ability and use its
best efforts during so much of its time as it reasonably determines to be
necessary to carry out the purposes and conduct the business of the Partnership
in accordance with this Agreement.
(b) Amplification of Powers and Duties. As amplification of, and not by way of
limitation of, the General Partner's powers, the General Partner shall have,
subject to provisions of this Agreement that may limit the exercise of such
powers, the full power and authority on behalf of the Partnership in order to carry
out and accomplish its purposes and business and to administer its affairs, to:.
(►) deal generally with all Partnership assets (in each case, whether held directly
or indirectly); (i►) expend Partnership capital and income; (iii) acquire, own, sell,
convey, exchange, dispose of and otherwise transact business with respect to
real estate and personal property, and in that connection employ attorneys,
accountants, brokers, appraisers, and such other consultants and advisors as
may be necessary or advisable; (iv) designate depositories of funds of the
Partnership and its Subsidiaries, and establish the terms and conditions of such
deposits and drawings thereon; (v) borrow money or otherwise procure
extensions of credit for the Partnership and its Subsidiaries; (v►) execute, seal,
acknowledge and deliver promissory notes, other evidences of indebtedness,
guarantees, mortgages, security and other agreements,deeds, assignments and
any other written documents; (vi►) execute and deliver documents and
instruments relating to property of the Partnership and its Subsidiaries of
whatever kind and description; (vii►) hold all or any portion of the assets of the
Partnership in the name of one or more trustees, nominees or other agents of or
for the Partnership for the purpose of facilitating transactions; (ix) establish
reserves to fund the operations and expenses of the Partnership, including for
anticipated and contingent obligations; (x) loan money upon such terms and with
such security as the General Partner shall deem appropriate; and (xi) do all
things, carry on all activities and execute, perform, modify, supplement or
terminate all contracts which the General Partner shall deem necessary,
desirable, incidental or convenient to or to further the purposes of the
Partnership, or to protect and preserve the assets of the Partnership.
(c) Admission of Partners. The General Partner shall have the right, without the
approval or Consent of the Limited Partners, to admit the Persons listed on
Schedule 1 to the Partnership as Limited Partners and admit any Person who
becomes a Substitute Limited Partner pursuant to Section 9.6.
24
{61129935; 12}
(d) Advisory Agreement; Agreements with Affiliates. The General Partner on behalf
of the Partnership is authorized to enter into, a separate advisory agreement with
HNRG in the form attached as Exhibit A hereto (the "Advisory Agreement"),
pursuant to which HNRG will provide advisory services to, and oversight of the
operations of, the Partnership and its Subsidiaries. In no event shall the
Partnership enter into any other agreement with any Affiliate of the General
Partner, or with the General Partner, unless the agreement is in writing,
describes the subject matter thereof and all compensation to be paid thereunder
and is on terms generally no less favorable to the Partnership than it could have
obtained in a comparable arm's-length transaction with a person who is unrelated
to the General Partner or an Affiliate of the General Partner for comparable
services on comparable properties. Without limiting the foregoing, the General
Partner is authorized to cause Subsidiaries of the Partnership to enter into
separate advisory agreements with HNRG and its Affiliates pursuant to which
HNRG and its Affiliates will provide advisory services to, and oversight of the
operations of, the.Partnership's Subsidiaries, and the General Partner and
HNRG are authorized to engage their Affiliate, Hancock Forest Management Inc.,
to provide property management services to the Partnership's Timberland
Investments located in the United States, their Affiliate Hancock Forest
Management (NZ) Limited to provide property management services to the
Partnership's Timberland Investments located in New Zealand and other
Affiliates to provide property management services to the Partnership's
Timberland Investments located in other countries, in each case in compliance
with this Section 8.2(d).
(e) Investment Company. The General Partner shall use its commercially
reasonable efforts to ensure that the Partnership will not be deemed an
"investment company" as such term is defined in the Investment Company Act of
1940.
(f) No Publicly Traded Partnership Status. Until such time as the Registration is
effected the General Partner will use commercially reasonable efforts to ensure
that the Partnership (i) will be classified as a Partnership as defined in Sections
7701(a)(2) and 761(a) of the Code and not as an association taxable as a
corporation and (ii) will not be classified as a "Publicly Traded Partnership" as
defined in Section 7704 of the Code.
(g) Foreign Tax and Filing Requirements. The General Partner will (i) use
commercially reasonable efforts to structure all investments made by the
Partnership outside the United States to avoid (A) causing income of a Limited
Partner not derived from the Partnership to be subject to tax in jurisdictions in
which such investments are located or formed and (B) creating tax filing
obligations by the Limited Partners in jurisdictions in which such investments are
located or formed, and (ii) notify the Limited Partners in writing of any such tax
filing or payment obligation promptly following such time as the General Partner
becomes aware of such filing or payment obligation. The General Partner will
seek to structure investments made by the Partnership outside the United States
in a tax-efficient manner, provided that the General Partner shall not be required
25
{B1129935; 12}
to take into account the tax status of any particular Limited Partner in so doing.
The General Partner will use commercially reasonable efforts (x) to furnish a
Limited Partner information, if reasonably available to the General Partner
without undue expense, which the Limited Partner may request in connection
with tax withholding or tax returns or reports in respect of such Limited Partner
and applicable credits and refunds on account of withholding in respect of foreign
taxes and (y) to consult with such Limited Partner, if necessary, as to the means
of obtaining any additional information such Limited Partner may require for the
aforesaid purpose.
(h) Prohibited and Listed Transactions: The General Partner will use commercially
reasonable efforts to cause the Partnership not to engage in any transaction that,
as of the date the Partnership enters into a binding contract to engage in such
transaction, would cause a Limited Partner that is a "tax-exempt entity" (as
defined in Section 4965(c) of the Code) to become a party (within the meaning of
Section 4965(a) of the Code) to a "listed transaction" or a "prohibited reportable
transaction" (each as defined in Section 4965(e) of the Code). If the General
Partner reasonably determines that the Partnership has engaged directly or
indirectly in a transaction that is a listed transaction or a prohibited reportable
transaction, it shall promptly notify each Limited Partner of such determination
and shall use commercially reasonable efforts to cooperate with Limited Partners
so as to ensure, to the extent practicable, that Limited Partners that do not wish
to become a party to a listed transaction or a prohibited reportable transaction do
not become or continue as a party.
(i) The General Partner shall use commercially reasonable efforts to conduct the
affairs of the Partnership in order to avoid the Partnership incurring "unrelated
business taxable income" as defined in Section 512 of the Code (including
"unrelated debt-financed income" as defined in Section 514 of the Code).
(j) Delegation of Powers. Except as otherwise provided under this Agreement or by
law, the General Partner may delegate all or any of its duties to any of its officers,
directors, employees, stockholders and agents, and in furtherance of such
delegation may elect, employ, contract or deal with any Person (including any
Affiliate of the General Partner), including HNRG pursuant to the Advisory
Agreement.
(k) Standard of Care. The General Partner shall discharge its duties with the care,
skill, prudence, and diligence under the circumstances then prevailing that an
institutional investor, reasonably experienced in the business of investing in
commercial timberland, would use in investing its own funds.
8.3 Reliance by Third Parties. No person dealing with the Partnership, or the assets
thereof, whether as mortgagee, assignee, purchaser, lessee, grantee or otherwise shall be
required to investigate the authority of the General Partner in purchasing, selling, assigning,
leasing, mortgaging, conveying or otherwise dealing with any Partnership asset, nor shall any
such purchaser, seller, assignee, lessee, mortgagee, grantee or other Person entering into a
contract with the Partnership be required to inquire as to whether the approval of the Partners
26
{61129935; 12}
for any such purchase, sale, assignment, lease, mortgage, transfer or other transaction has
been first obtained. Any such Person shall be conclusively protected in relying upon a
certificate of authority or any other material fact signed by the General Partner, or in accepting
any instrument signed by the General Partner in the name and on behalf of the Partnership or
the General Partner.
8.4 Liability for Acts or Omissions and Indemnification.
(a) The General Partner and its Affiliates (and their respective officers, directors,
employees and stockholders) shall have no liability to the Partnership or to any
Partner for any loss suffered by the Partnership that arises out of any action or
inaction of the General Partner or its Affiliates if the General Partner or its
Affiliates, in good faith, determine that such course of conduct is in, or not
opposed to, the best interest of the Partnership, and such course of conduct did
not constitute fraud, gross negligence or willful misconduct of the General
Partner or its Affiliates. To the fullest extent permitted by law, the General
Partner and its Affiliates shall be indemnified by the Partnership against any
losses, judgments, liabilities, expenses and amounts paid in settlement of any
claims sustained by them in connection with the Partnership, provided that the
same were not the result of gross negligence or willful misconduct on the part of
the General Partner or its Affiliates.
(b) In any claims for indemnification for federal or state securities law violations, the
party seeking indemnification shall place before the court the position of the SEC
with respect to the issue of indemnification for securities law violations.
(c) Except as provided in Section 6.1(c), any claim for indemnification shall be paid
from, and only to the extent of, the assets of the Partnership, and no Partner
shall have any personal liability on account thereof.
(d) Any act or omission by the General Partner or its Affiliates reasonably believed
by them to be required under applicable law as fiduciaries of an employee benefit
plan shall be deemed to be in, or not opposed to, the best interests of the
Partnership.
8.5 Compensation and Reimbursement of General Partner. The General Partner, in
its capacity as General Partner, shall not receive any salary, fees, profits or distributions from
the Partnership except that the Partnership shall reimburse the General Partner for its
out-of-pocket expenses incurred in connection with its activities as General Partner. The
Partnership shall not reimburse the General Partner for any items generally considered to be
the General Partner's overhead and ordinary administrative expenses. Nothing in this
Section 8.5 shall prevent HNRG from receiving fees and being reimbursed for its expenses as
provided for in the Advisory Agreement, or any other Affiliate of the General Partner from
receiving fees and being reimbursed for its expenses as provided for in any agreement entered
into with such Affiliate in compliance with this Agreement and the Advisory Agreement.
8.6 Other Interests of the General Partner and its Affiliates. Except as otherwise
provided in this Agreement, the General Partner and any Affiliates of the General Partner(and
27
{B1129935; 12}
their respective officers, directors, employees and stockholders) may engage in or possess
interests in other business ventures (not connected with the Partnership) of every kind and
description, independently or with others including, but not limited to, serving as manager or
general partner of other Entities and participating, directly and indirectly, in timberland
investment and operation in all of their phases, which may include ventures competitive with the
Partnership. Neither the Partnership nor any Limited Partner shall have any rights in or to such
other accounts, Entities or other ventures or the income or profits therefrom by reason of the
General Partner's position with the Partnership. Neither John Hancock Life Insurance Company
(U.S.A.) nor any of its Affiliates, including the General Partner and HNRG, shall be obligated to
present any particular investment opportunity to the Partnership, even if such opportunity is of a
character which, if presented to the Partnership, could be taken by the Partnership. Subject to
the other provisions of this Agreement, the Partnership may employ or transact business with
any Person, notwithstanding the fact that any Partner or any of its Affiliates may have (or have
had) an interest in or connection with such Person, and neither the Partnership nor the other
Partners shall have any rights by virtue of this Agreement in or to any income or profits derived
therefrom.
8.7 Resolution of Conflicts of Interest. Whenever a conflict of interest exists or may
arise between the General Partner or any of its Affiliates, on the one hand, and the Partnership
or any Limited Partner, on the other, the General Partner may in connection with its resolution of
such conflict consider: (i) the relative interests of any party to such conflict and the benefits and
burdens relating to such interest; (ii) any customary or accepted industry practices; (iii) any
applicable generally accepted accounting practices or principles; and (iv) such additional factors
as the General Partner determines in its sole discretion to be relevant, reasonable or
appropriate under the circumstances. A resolution made or action taken by the General Partner
with respect to a conflict of interest, so long as the General Partner has acted in good faith and
without negligence, shall not constitute a breach of this Agreement or a breach of any duty or
standard of care imposed in this Agreement or under the Act.
8.8 Withdrawal of General Partner.
(a) Voluntary Withdrawal. A General Partner that is the sole General Partner may
not voluntarily withdraw from the Partnership unless a new General Partner shall
have been selected which: (i) shall have stated its willingness to be admitted;
and (ii) shall have received the Consent of the Limited Partners.
(b) Involuntary Withdrawal. A General Partner shall be deemed to have involuntarily
withdrawn as a General Partner from the Partnership upon the occurrence of any
of the following events: (i) in the case of a corporate General Partner, the
revocation of its charter, other than by voluntary act of its stockholders; (h) in the
case of a General Partner that is a partnership, the death, dissolution (other than
by voluntary act of its Partners) or bankruptcy of all the partners of such
partnership; (iii) the making of an assignment for the benefit of creditors, the filing
of a voluntary petition in bankruptcy, or an adjudication of bankruptcy; or (iv) the
removal of such General Partner by the Consent of the Limited Partners.
8.9 Consequences of Withdrawal. Upon the Withdrawal of a General Partner, the
withdrawn General Partner (or its corporate or other general successor) shall be entitled to
28
{B1129935; 12)
receive from the Partnership any fees or other amounts due and owing to it by the Partnership
less any amounts due and owing by it to the Partnership. The right of the General Partner (or
its corporate or other general successor) to payment of said amounts and fees shall be subject
to any claim for damages which the Partnership or any Partner may have against such General
Partner (or its corporate or other general successor) if such Withdrawal is in contravention of
this Agreement.
8.10 Appointment of Successor General Partner.
(a) Procedure if There Is a Remaining General Partner. Upon the Withdrawal of a
General Partner, the remaining General Partner(s), if any, shall promptly notify
the Partners of such Withdrawal. The remaining General Partner(s) may (but
shall not be obligated to) propose for admission a successor General Partner,
unless a meeting to propose, or the consent to, a successor General Partner
shall have already been requested by the Limited Partners pursuant to Article 11.
Any such proposed successor General Partner shall become a successor
General Partner upon the consent of the other General Partner(s), the Consent
of the Limited Partners and the successor General Partner's acceptance of its
duties and obligations hereunder, and its execution of this Agreement, in its
capacity as a general partner.
(b) Procedure if There Is No Remaining General Partner. If, following the
Withdrawal of a General Partner, there is no remaining General Partner, any
Limited Partner may notify the other Limited Partners of such circumstances.
Any Limited Partner may then propose a successor General Partner. A
successor General Partner proposed pursuant to this Section 8.10(b) shall
become a successor General Partner upon the Consent of the Limited Partners
and the successor General Partner's acceptance of its duties and obligations
hereunder, and its execution of this Agreement, in its capacity as a general
partner.
ARTICLE 9
TRANSFERS OF UNITS, ETC.
9.1 Restrictions on Transfer. No Limited Partner may Assign all or any of its Units,
whether voluntarily or involuntarily or by operation of law, or enter into any contract to Assign
any of its Units, except as provided in this Article 9.
9.2 General Restrictions.
(a) Each Limited Partner agrees that it will not Assign any Units except in
compliance with this Article 9 and, in anticipation and subsequent organization of
a Subsidiary which elects to be taxed as a real estate investment trust under
Sections 856 through 860 of the Code, in compliance (including anticipated
compliance, if the Subsidiary has not yet been formed) with the provisions of the
Certificate of Incorporation of such Subsidiary ("REIT Subsidiary") requiring (or
that will require, as applicable) that any sales, purchases, redemptions or
issuance of stock of the REIT Subsidiary not result in (i) if the REIT Subsidiary is
29
{61129935; 12}
not a Pension-Held REIT, the REIT Subsidiary becoming a Pension-Held REIT,
(ii) violating the 5/50% Rule or (iii) having fewer than 100 Persons owning the
stock of such REIT Subsidiary. Any attempted Assignment of all or any portion
of Units, other than in strict accordance with this Article 9, shall be null and void
ab initio. Each Limited Partner agrees that breach of the provisions of this Article
9 may cause irreparable injury to the Partnership for which monetary damages
(or other remedy at law) are inadequate in view of (i) the complexities and
uncertainties in measuring the actual damages that would be sustained by
reason of the failure of a Limited Partner to comply with such provisions, and (ii)
the uniqueness of the Partnership business and the relationship among the
Limited Partners. Accordingly, the Limited Partners agree that the provisions of
this Article 9 may be enforced by specific performance and the Partnership may
refuse to recognize any assignee as one of its Limited Partners for any purpose
(including rights to distributions and voting rights) until all applicable provisions of
this agreement have been complied with.
(b) Each Limited Partner shall, upon request of the General Partner, disclose such
information in writing with respect to such Limited Partner's direct and indirect
ownership of Units as the General Partner in its discretion reasonably deems
necessary or appropriate in order that the Partnership may fully comply with the
REIT Subsidiary's Certificate of Incorporation and to comply with the
requirements of any taxing authority or governmental agency having jurisdiction
over the Partnership or its Subsidiaries.
(c) Any Limited Partner desiring to Assign (the "Assigning Limited Partner") all or
any portion of its Units shall give prior Notice of the intended Assignment to the
General Partner. Each Limited Partner hereby acknowledges and agrees that
any Assignment of Units made without the giving of prior Notice to the General
Partner shall be null and void ab initio.
(d) Each Limited Partner hereby agrees and acknowledges, that it may not Assign
any Units owned by it to any Person or assign its rights hereunder to any Person,
unless such Person is a Qualified Assignee, and that any Assignment of Units to
any Person who is not a Qualified Assignee shall be null and void ab initio.
(e) Each Limited Partner agrees and acknowledges that it may not Assign all or any
Units to any Person who falls under any of the first to third sub-items of Article
63, Paragraph 1, Item 1 of the Financial Instruments and Exchange Law of Japan
(Law No. 25, 1948, as amended. the "FIEL"). The General Partner agrees that it
shall not Assign its interest in the Partnership and shall withhold its consent to an
Assignment of a Limited Partner's Units, if, as a result of such Assignment, the
number of Partners (excluding non-residents of Japan (as defined in Article 6,
Paragraph 1, Item 6 of the Foreign Exchange and Foreign Trade Law of Japan,
Law No. 228, 1949, as amended) that have not been offered the interests in
Japan (each a "Non-Resident") and qualified institutional investors (as such term
is defined in Article 2, Paragraph 3, Item 1 of the FIEL) (each a "QII")) would
become 50 or more. In addition, and subject to the other provisions of this Article
9, a Partner that is not a Non-Resident and that is (i) not a QII may, upon the
30
{B1129935; 121
consent of the General Partner, Assign its Units in whole but not in part, to any
Person; and (ii) a QII shall not Assign any of its Units to a Person other than a
QII. Furthermore, in the case where an assignor or an assignee of a Limited
Partner's Units is domiciled or resident in Japan, a Limited Partner shall notify an
assignee in writing on or before such Assignment that (i) the Limited Partner's
Units to be transferred are deemed to be a security distributed in a private
placement to which Article 23-13, Paragraph 4, Item 2 of the FIEL applies, and
accordingly, for the purpose of such Assignment, no registration statement has
been filed under Article 4, Paragraph 1 of the AEL and no disclosure has been
made and (ii) the Limited Partner's Units are a security set forth in Article 2,
Paragraph 2, Item 6 of the FIEL.
(f) Each Limited Partner who is resident in Australia agrees and acknowledges that
it may not Assign all or any Units to any Person who is resident in Australia,
unless the Assignment is by way of an offer of Units for issue to "Wholesale
Clients" under section 761 G of the Corporations Act that does not need
disclosure to investors under Part 6D.2 of the Australian Corporations Act (2001)
(Cwlth) ("Corporations Act") and does not require a product disclosure statement
to be given to investors under Part 7.9 of the Corporations Act.
9.3 Assignment. Before any Assigning Limited Partner shall voluntarily Assign all or
any portion of its Units (the "Assigned Units") to any Person, the Assigning Limited Partner shall
notify the Partnership in writing of such intended Assignment and the terms of the proposed
Assignment (the "Assignment Notice"). If the Partnership shall receive an Assignment Notice,
then the General Partner shall forward a copy to all of the other Limited Partners (the "Non-
Assigning Limited Partners"). The Partnership and the Non-Assigning Limited Partners shall
have an opportunity to purchase all (but not less than all) of the Assigned Units. Each Non-
Assigning Limited Partner which desires to purchase such Units shall deliver to the Partnership
a Notice within 45 days after the date of the Assignment Notice ("Election Notice") indicating the
number of Units the electing Non-Assigning Limited Partner desires to purchase. If, at the end
of such 45 day period, (x) the aggregate number of the Assigned Units committed to be
purchased by the Non-Assigning Limited Partners pursuant to their Election Notices plus, (y) the
number of the Assigned Units that the Partnership desires to purchase (such Non-Assigning
Limited Partners and the Partnership being referred to collectively as the "Purchasers"), is: (i)
equal to one hundred percent (100%) of the Assigned Units, then each Purchaser shall
purchase such number of Units of the Assigning Limited Partner as such Purchaser indicated a
desire to purchase, or (ii) in excess of one hundred percent (100%) of the Assigned Units, then
each Purchaser shall purchase such number of Units of the Assigning Limited Partner as is
equal to the product of the Assigned Units multiplied by a fraction, the numerator of which is the
number of Units which such Purchaser indicated a desire to purchase and the denominator of
which is the aggregate number of Units which all Purchasers indicated a desire to purchase. In
the case of an Indirect Assignment, the foregoing right of first refusal shall apply to the Units
held by the Limited Partner the equity of which will cease to be directly or indirectly beneficially
owned by the Limited Partner Parent (as defined below), and the terms of the transfer of the
equity of the Limited Partner(including, if applicable, the good faith allocation of value by such
Limited Partner of the consideration for its equity to the Units) shall, as nearly as possible, be
the terms of the proposed Assignment of Units to be included in the Assignment Notice. Each
Purchaser shall assume such Purchaser's pro-rata portion of the Assigning Limited Partner's
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{B1129935; 121
commitment to make Capital Contributions. If the Partnership and the Non-Assigning Limited
Partners do not elect to purchase all of the Assigned Units, then the Assigning Limited Partner
shall have the right to Assign all the Assigned Units on the terms set forth in the Assignment
Notice to any Person (subject to the limitations set forth in this Article 9). If the Assigning
Limited Partner fails to Assign all of such Assigned Units within 180 days after the delivery of
the Assignment Notice to the Partnership or if at any time the Assigning Limited Partner
changes the price or any other material terms contained in the Assignment Notice, the
Assigning Limited Partner shall be required to reoffer the Assigned Units in accordance with the
above procedure. Anything in this Section 9.3 to the contrary notwithstanding, an Assigning
Limited Partner may, without compliance with this Section 9.3, Assign all or any portion of the
Assigned Units to: (i) a Person wholly-owned by such Assigning Limited Partner, so long as
such Assigning Limited Partner continues to retain ownership of all the equity of such Person;
(ii) a Person which is the owner, directly or indirectly, of all the equity of such Assigning Limited
Partner("Parent"); (iii) any other Person wholly-owned by such Parent, so long as such Parent
continues to retain ownership of all the equity of such other Person; (iv) any successor trustee
of a Limited Partner which is a trust; or (v) any Person in a transaction with respect to which the
General Partner has waived the requirements of this Section 9.3.
9.4 Admission of Assignees. Upon the Assignment (other than an Indirect
Assignment) of Assigned Units to any assignee in accordance with this Article 9 and the
admission of such assignee as a Substitute Limited Partner, such assignee shall have all of the
rights and obligations of the Assigning Limited Partner. The Assigning Limited Partner shall not
be released from liability for its unfunded commitment to make Capital Contributions until the
assignee becomes a Limited Partner of record, and until such assignee shall have assumed the
Assigning Limited Partner's obligations with respect to its unfunded commitment to make Capital
Contributions.
9.5 Requirements Applicable to All Assignments. Any Assignment by a Limited
Partner of Units, and any assignee of a Limited Partner becoming a Limited Partner of record of
the Partnership, shall also be subject to the following requirements, and such Assignment (and
admission, if applicable) shall not be effective unless such requirements are complied with:
(a) The following documents must be delivered to the General Partner to effect an
Assignment and must be satisfactory, in form and substance, to the General
Partner:
(i) A copy of the instrument pursuant to which the Assignment is effected.
(ii) An instrument, executed by the Assigning Limited Partner and its
assignee, containing the following information and agreements, (A) the notice address of
the assignee; (B) if the assignee is to become a Limited Partner of record of the
Partnership, the assignee's ratification of this Agreement and agreement to be bound
thereby and its representation that the representations and warranties contained in the
subscription agreement pursuant to which the Assigning Limited Partner subscribed for
its Units are true and correct with respect to it and the assignee's written assumption of
the Assigning Limited Partner's obligations with respect to its unfunded commitment to
make Capital Contributions; (C) representations and warranties by the Assigning Limited
Partner and its assignee that the Assignment (and admission, if applicable) is being
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{B1129935; 121
made in accordance with all applicable law; and (D) written representations and
warranties that the assignee is a "qualified purchaser" (as defined in Section 2(a)(51) of
the Investment Company Act of 1940, as amended).
(iii) Unless the Units (or portion thereof) subject to the Assignment are
registered under the Securities Act and any applicable state securities law, the General
Partner may require a favorable opinion of the Partnership's legal counsel, or of other
legal counsel reasonably acceptable to the General Partner, to the effect that the
Assignment (and admission, if applicable) is being made pursuant to a valid exemption
from registration under those laws and in accordance with those laws.
(b) Such Assignment would not cause the Partnership to be treated as a "publicly
traded partnership" under Code Section 7704(b), and such Assignment does not
require the Partnership to register as an investment company under the
Investment Company Act of 1940.
(c) Any Assigning Limited Partner and its assignee shall pay, or reimburse the
Partnership for, all reasonable costs and expenses incurred by the Partnership in
connection with such Assignment (and admission, if applicable), on or before the
tenth (10th) day after the receipt by that Person of the Partnership's invoice for
the amount due.
9.6 Substitution. An assignee of all or a part of a Limited Partner's Units Assigned in
accordance with the provisions of this Article 9 shall become a Substitute Limited Partner only if:
(a) the General Partner consents to such substitution (which consent may be
withheld in the sole and absolute discretion of the General Partner);
(b) such assignee executes an instrument satisfactory in form and substance to the
General Partner accepting and adopting the terms and provisions of this
Agreement;
(c) such assignee agrees to pay any filing fees and other fees and expenses of the
Partnership or the General Partner in connection with its becoming a Substitute
Limited Partner; and
(d) in the case of Assignments other than by operation of law, the Assigning Limited
Partner states its intention in writing to have its assignee become a Substitute
Limited Partner.
If all of the conditions of this Article 9 have been met, the assignee of a Limited Partner's
Units shall become a Substitute Limited Partner on the date the General Partner notifies the
assignee that such conditions have been met.
An assignee of a Limited Partner's Units in accordance with Sections 9.2, 9.3, and 9.5
which does not become a Substitute Limited Partner and which desires to make a further
Assignment of the Units shall be subject to all the provisions of this Article 9 to the same extent
and in the same manner as any Limited Partner. Failure or refusal of the General Partner to
33
{61129935; 12}
admit an assignee as a Substitute Limited Partner shall in no way affect the right of an assignee
of a Partner's Assigned Units in accordance with Sections 9.2, 9.3, and 9.5 to receive the
distributions and the share of Profit or Loss to which its assignor would have been entitled or the
assignee's obligations to make the Assigning Limited Partner's unfunded Capital Commitments.
9.7 Rights of Successors of a Limited Partner on Bankruptcy, Insolvency, Etc. Upon
the bankruptcy, insolvency, dissolution or other termination of any Limited Partner, the legal
representative or successor in interest to such Partner, if such legal representative or successor
is otherwise a Qualified Assignee and has complied with Sections 9.2 and 9.5, shall have all the
rights and be subject to all the same limitations as the Limited Partner under this Agreement,
including the right to Assign all or any part of the Limited Partner's Units, subject to the
provisions of this Article 9, and to become a Substitute Limited Partner if the terms and
conditions set forth in Section 9.6 are satisfied.
9.8 Status of an Assigning Limited Partner. Any Limited Partner who shall Assign all
of its Units in accordance with this Article 9 shall cease to be a Limited Partner of the
Partnership and shall no longer have any of the rights or privileges of a Limited Partner, except
that unless and until a Substitute Limited Partner is admitted in its stead, such Assigning Limited
Partner shall retain the statutory rights of an assignor of a limited partnership interest under the
Act.
9.9 Withdrawal of Limited Partner. Except upon Assignment of all of a Limited
Partner's Units and the admission of the assignee as a Substitute Limited Partner in compliance
with the terms hereof, no Limited Partner shall have the right to withdraw from the Partnership
except with the consent of all of the Partners.
9.10 Legend. Certificates and other written evidences representing Units, if any, shall
have written, stamped or printed on the face or back of the certificates the following legend
referring to the restrictions contained herein in the following form, appropriately completed, but
the absence of such legend shall not relieve the Limited Partners of their obligations hereunder:
"The interest represented by this certificate is subject to restrictions on transfer set forth in the
Amended and Restated Limited Partnership Agreement of the Partnership, a copy of which the
Partnership will furnish to the holder upon written request and without charge."
ARTICLE 10
TERMINATION
10.1 Dissolution. The Partnership shall be dissolved and its affairs wound up on the
first to occur of the following:
(a) upon (i) an election by the General Partner made by Notice to the Limited
Partners with the Consent of the Limited Partners, (ii) the Withdrawal or
occurrence of another event that causes the General Partner to cease to be the
General Partner of the Partnership, unless (A) at the time there is at least one
other General Partner of the Partnership and such General Partner agrees to
continue the business of the Partnership and said General Partner of the
Partnership does continue the business of the Partnership, or (8) within 90 days
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{B1129935; 121
after the occurrence of such event, the Partners appoint one or more additional
general partners in accordance with Section 8.10(b); or
(b) any other event which requires the dissolution and/or the winding up of the
Partnership under the Act; or
(c) if at any time after January 20, 2017, by Consent of the Limited Partners such
Limited Partners desire to sell their Units, in which case all of the Limited
Partners hereby agree to vote to cause a winding-up of the Partnership, and to
cause the Partnership to either sell all its assets or to make an "in kind"
distribution of its assets, and after provision for expenses and reserves, distribute
the remaining assets to the Limited Partners in accordance with Section 6.2 and
dissolve the Partnership. In connection with any winding-up under this clause
(c), if the Partnership receives an offer for the sale of the Units which the General
Partner believes to be more advantageous than a sale of the Partnership's
assets or a distribution "in kind" of the Partnership's assets, then upon Consent
of the Limited Partners all of the Limited Partners hereby agree to sell their Units
and to take all such other reasonable and necessary actions to effect such sale
transaction (including a sale effected by merger) and winding-up, and the
General Partner will similarly take all such other reasonable and necessary
actions to effect such sale transaction (including a sale effected by merger) and
winding-up. All of the foregoing will be subject to any required third party
consents and any required governmental approvals; or
(d) the disposition of all of the Timberland Investments pursuant to this clause (d)
unless the Partnership has effected the Registration prior to December 31, 2025.
Commencing December 31, 2025, the General Partner will undertake to dispose
of all of the Timberland Investments in an orderly fashion, wind up the operations
of the Partnership and, after provision for expenses and reserves, distribute the
proceeds to the Limited Partners in accordance with Section 6.2. If all the
Timberland Investments have not been disposed of by December 31, 2027, the
General Partner shall notify the Limited Partners and with the consent of the
Limited Partners holding at least 75% of the Pro Rata Percentages, continue
disposition efforts until December 31, 2028. If such consent is not obtained, the
General Partner will distribute the Partnership's remaining assets "in kind" in the
form of Timberland or Timberland Securities. If such consent is obtained but all
of the Timberland Investments have not been fully disposed of by December 31,
2028, the General Partner will distribute the Partnership's remaining assets "in
kind" in the form of Timberland or Timberland Securities. In any such case, the
General Partner shall give the Limited Partners notice of the intended
distribution, which notice shall include, in the case of Timberland, copies of the
most recent appraisal and the most recent environmental site assessment
(Phase I and Phase II, as appropriate) and a commitment for owner's title
insurance. Within 30 days thereafter, each Limited Partner shall give the
General Partner Notice as to whether the Limited Partner intends to take title to
the real estate directly or in the name of a nominee, and whether the Limited
Partner will require the General Partner's assistance in obtaining title insurance,
and whether a Limited Partner will require a new appraisal (or update of the most
35
{61129935; 12}
recent appraisal) and/or a new environmental site assessment (or update of the
most recent environmental site assessment). The "in kind" distribution will be
made as soon as practicable after completion of any appraisal(s) and/or
environmental site assessment(s). In connection with any winding-up under this
clause (d), if the Partnership receives an offer for the sale of the Units which the
General Partner believes to be more advantageous than a sale of the
Partnership's assets or a distribution "in kind" of the Partnership's assets, then
upon Consent of the Limited Partners all of the Limited Partners hereby agree to
sell their Units and to take all such other reasonable and necessary actions, to
effect such sale transaction (including a sale effected by merger) and winding-up
and the General Partner will similarly take all such other reasonable and
necessary actions, to effect such sale transaction (including a sale effected by
merger) and winding-up. All of the foregoing will be subject to any required third
party consents and any required governmental approvals. .
Dissolution of the Partnership shall be effective on the day on which the event occurs
giving rise to the dissolution,but the Partnership shall not terminate until the assets of the
Partnership shall have been distributed in accordance with Section 6.2 and a certificate of
cancellation shall have been filed with the Secretary of State of the State of Delaware.
10.2 Liquidation and Cancellation of Certificate. Upon the dissolution of the
Partnership, the General Partner, or if there is none, such other Person as is required by law to
wind up the Partnership's affairs, shall proceed with the liquidation of the Partnership and
cancellation of the Certificate. During the period of dissolution and winding up of the
Partnership, the General Partner or any Person performing such action may exercise all of the
powers granted to the General Partner herein, and may adopt such plan, method or procedure
as may be deemed reasonable in order to effectuate an orderly winding-up.
ARTICLE 11
MEETING AND VOTING RIGHTS OF LIMITED PARTNERS
11.1 Meetings.
(a) Meetings of the Limited Partners for any purpose may be called by the General
Partner and shall be called by the General Partner upon receipt of a request in
writing signed by Limited Partners holding fifteen percent (15%) or more of the
Pro Rata Percentages. Notice of any such meeting shall be sent within 10 days
after receipt of such request. Such request shall state the purpose of the
proposed meeting and the matters proposed to be acted upon at the meeting.
Such meeting shall be held at the principal office of the Partnership, or at such
other place as may be designated by the General Partner, or, if called upon the
request of Limited Partners, as designated by such Partners. In addition, any
Limited Partner may, and upon receipt of a request in writing signed by Limited
Partners holding fifteen percent (15%) or more of the Pro Rata Percentages, the
General Partner shall, submit any matter (upon which the Limited Partners are
entitled to act) to the Limited Partners for action by written consent without a
meeting.
36
{61129935; 12}
(b) A Notice of any such meeting shall be given either personally or by mail, not less
than 15 days nor more than 60 days before the date of the meeting, to each
Limited Partner at its last known business address. Such Notice shall state the
place, time and purpose(s) of the meeting. If a meeting is adjourned to another
time or place, and if any announcement of the adjournment of time or place is
made at the meeting, it shall not be necessary to give notice of the adjourned
meeting. The presence in person or by proxy of Limited Partners owning at least
a majority of the Pro Rata Percentages shall constitute a quorum at all meetings
of the Limited Partners; provided, however, that if there be no such quorum,
Limited Partners owning a majority of the Pro Rata Percentages so present or so
represented may adjourn the meeting from time to time without further notice,
until a quorum shall have been obtained. No notice of the time, place or purpose
of any meeting of Limited Partners need be given to any Limited Partner who
attends in person or is represented by proxy (except when a Limited Partner
attends a meeting for the express purpose of objecting at the beginning of the
meeting to the transaction of any business on the ground that the meeting is not
lawfully called or convened), or to any Limited Partner entitled to such notice
who, in writing, has executed and filed with the records of the meeting, either
before or after the time thereof, waiver of such notice.
(c) For the purpose of determining the Limited Partners entitled to vote on, or to vote
at, any meeting of the Partnership or any adjournment thereof, the General
Partner or the Limited Partners requesting such meeting may fix, in advance, a
date as the record date for any such determination of Limited Partners. Such
date shall not be more than 50 days nor less than 10 days before any such
meeting.
(d) Each Limited Partner may authorize any person or persons to act for it by proxy
in all matters in which a Limited Partner is entitled to participate, whether by
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Limited Partner or its attorney-in-fact and must state
the number of Units to which the proxy pertains. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable by the Limited Partner executing it.
(e) At each meeting of Limited Partners, the Limited Partners present or represented
by proxy may adopt such rules for the conduct of such meeting as they deem
appropriate, provided that such rules shall not be inconsistent with the provisions
of this Agreement.
11.2 Action Without Meeting. Any action required or permitted to be taken by the
Limited Partners at a meeting may be taken without a meeting and, except as provided in
Section 2.8(d), without prior notice if a consent setting forth the action so taken shall be signed
by Limited Partners holding not less than the Pro Rata Percentage that would be necessary to
authorize or take such action at a meeting at which all Limited Partners were present and voted.
11.3 Voting Rights of Limited Partners. Notwithstanding the powers of the General
Partner hereunder, in addition to the actions specified in this Agreement as requiring Consent of
37
M129935; 12}
the Limited Partners, the Consent of the Limited Partners will suffice to: (a) amend this
Agreement, subject to the provisions of Section 15.11; or (b) approve the sale of all or
substantially all the assets of the Partnership after January 20, 2017 whether or not consented
to by the General Partner. However, nothing in this Section 11.3 shall be interpreted to require
the General Partner to obtain any consent of the Limited Partners in connection with sales in the
ordinary course of business of the Partnership or any sales contemplated by Article 10.
ARTICLE 12
POWER OF ATTORNEY; AMENDMENTS
12.1 Power of Attorney. The Limited Partners hereby irrevocably make, constitute
and appoint each Person who is a General Partner from time to time, each general partner from
time to time of any General Partner which is a partnership, and each individual holding from
time to time any of the offices of president, vice president or treasurer of any General Partner
which is a corporation or is a limited liability company (each of such persons hereafter referred
to as the "Attorney"), with full power of substitution, the true and lawful attorney-in-fact of, and in
the name, place and stead of, the Limited Partners, severally from time to time to execute, date,
consent to, swear to, acknowledge, make, verify, deliver, file, record and/or publish any and all
of the following:
(a) this Agreement and the Certificate under the laws of the State of Delaware or any
other jurisdiction, any subsequent amendment to this Agreement and the
Certificate (including, but not limited to, amendments reflecting the admission or
substitution of other Partners, reflecting the Capital Contributions made by the
Limited Partners, or any amendment the General Partner is authorized under
Section 15.11(b) to make without the Consent of the Limited Partners), or any
other document required from time to time to admit a Limited Partner, or to effect
the substitution of a Limited Partner's assignee as a Limited Partner or to
preserve the character of the Partnership as a limited partnership, rod vided that
each amendment was adopted in accordance with the terms of this Agreement;
and
(b) any certificates and other instruments which may be required to effectuate the
dissolution, continuation and termination of the Partnership pursuant to the
provisions of this Agreement.
Each Attorney shall have full authority to perform every act necessary for the foregoing
as fully as the Partner could do if personally acting, and the Partners hereby ratify all that said
Attorney shall lawfully do or cause to be done by virtue hereof. The Limited Partners
acknowledge that the Attorney may act on its behalf by way of a signature stamp. Nothing
contained in this power of attorney shall empower any Attorney, without the Consent of the
Limited Partners, to execute any instrument or document which increases the liability of the
Partners beyond the liability contemplated by this Agreement or any applicable subscription
agreement, or which reduces the pro rata share of the Limited Partner in profits, losses,
Distributable Cash or other distributions hereunder.
12.2 Power Coupled With an Interest. The foregoing grant of authority:
38
{61129935; 12}
(a) is a special power of attorney coupled with an interest in favor of the General
Partner and as such shall be irrevocable and shall survive the dissolution or other
termination of any of the Limited Partners;
(b) may be exercised for the Limited Partners by a signature of the General Partner
or by listing the names of the Limited Partners and executing any instrument with
a single signature of the General Partner acting as attorney; and
(c) shall survive the Assignment by any Limited Partner of the whole or any portion
of its Units except that, where the assignee of the whole thereof has furnished a
power of attorney and has been approved by the General Partner for admission
to the Partnership as a Substitute Limited Partner, this power of attorney shall
survive such Assignment with respect to the assignor for the sole purpose of
enabling the General Partner to execute, acknowledge and file any instrument
necessary to effect such substitution and shall thereafter terminate with respect
to any Limited Partner who Assigns all of its Units.
ARTICLE 13
FAILURE BY LIMITED PARTNERS TO MAKE CAPITAL CONTRIBUTIONS
If a Limited Partner fails to pay the full amount of any installment of its Capital
Contribution when due, or any amount due under any subscription agreement for Units
executed by such Limited Partner, when due, and such failure continues for two Business Days
after Notice of such failure is given, or a Limited Partner fails in two or more instances to pay the
full amount of any such installment or amount due under any such subscription agreement when
due, then the General Partner, on behalf of the Partnership, may, in its sole discretion and in
addition to exercising any other rights afforded by law or at equity, take any one or more of the
following actions, to which each Limited Partner hereby consents:
(a) commence legal or other proceedings against the defaulting Limited Partner to
collect the due and unpaid amount plus interest thereon at the Overdue Rate and
the expenses of collection, including reasonable attorneys' fees, or to deduct
such amount from future distributions to such Limited Partner;
(b) upon Notice to the defaulting Limited Partner, deny the defaulting Limited Partner
the right to participate in any vote or consent of the Limited Partners required
under this Agreement or permitted under the Act, whereupon the Pro Rata
Percentage of such defaulting Limited Partner shall not be included for purposes
in a vote or consent of the Limited Partners;
(c) upon Notice to the defaulting Limited Partner, require the defaulting Limited
Partner to sell (and each defaulting Limited Partner hereby agrees to sell) its
Units to a Person designated by the General Partner (it being understood that the
General Partner will offer such opportunities to nondefaulting Limited Partners
before offering any such Units to other Persons) who agrees to pay the due and
unpaid amount of any defaulted Capital Contribution and to assume the
defaulting Limited Partner's other obligations under this Agreement and any
39
{B1129935; 12}
subscription agreement, at a purchase price equal to 75% of the then value of
the defaulting Limited Partner's Units; and
(d) pursue any other remedies and take any other actions that the General Partner
deems appropriate.
The General Partner may, in its sole discretion, cease taking any action commenced
under this Article 13 or restore any right of a defaulting Limited Partner reduced or terminated
pursuant to this Article 13 prior to a sale of such defaulting Limited Partner's Units pursuant to
clause (c) above.
ARTICLE 14
PIGGYBACK REGISTRATION
14.1 Definitions. For purposes of this Article 14, the following terms shall have the
meanings given therefor:
"Public Sale" means any sale of capital equity interests to the public pursuant to
an offering registered under the Securities Act or to the public through a broker, dealer or
market maker pursuant to the provisions of Rule 144 adopted under the Securities Act.
"Registrable Securities" means all Units. For purposes of this Agreement, a
Person shall be deemed to be a holder of Registrable Securities whenever such Person has the
right to acquire such Registrable Securities (upon conversion, exercise or exchange in
connection with an Assignment of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition has actually been
effected. As to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when they have been sold in a Public Sale.
"Registration Expenses" means all expenses incident to the Partnership's
performance of or compliance with this Article 14, including all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, fees and disbursements of custodians, and fees and disbursements of
counsel for the Partnership and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by the Partnership.
14.2 Right to Pigq back_. Whenever the Partnership proposes to register any of its
securities under the Securities Act (other than pursuant to registrations on Form S-4 or S-8 or
any successor forms) and the registration form to be used may be used for the registration of
Registrable Securities (a "Piggyback Registration"), the Partnership shall give prompt Notice to
all holders of Registrable Securities of its intention to effect such a registration and shall include
in such registration all Registrable Securities with respect to which the Partnership has received
written requests for inclusion therein within 20 days after the receipt of the Partnership's notice.
14.3 Priority on Primary Registrations. If a Piggyback Registration is an underwritten
primary registration on behalf of the Partnership and the managing underwriters advise the
Partnership in writing that in their opinion the number of securities requested to be included in
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{B1129935; 121
such registration exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, the Partnership shall include in such registration (i)
first, the securities the Partnership proposes to sell and (ii) second, the Registrable Securities
and other securities requested to be included in such registration, pro rata among the holders of
such Registrable Securities and the holders of other securities requested to be included in such
registration on the basis of the number of securities owned by each such requesting holder.
14.4 Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of the Partnership's securities and the
managing underwriters advise the Partnership in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number which can be sold
in such offering without adversely affecting the marketability of the offering, the Partnership shall
include in such registration (i) first, the securities requested to be included therein by the holders
requesting such registration and (ii) second, the Registrable Securities and other securities
requested to be included in such registration, pro rata among the holders of such Registrable
Securities and the holders of such other securities requested to be included in such registration
on the basis of the number of securities owned by each such requesting holder.
14.5 Selection of Underwriters. The Partnership shall select the investment banker(s)
and manager(s) to administer each Piggyback Registration.
14.6 Registration Procedures. Whenever any holders of Registrable Securities have
requested that any Registrable Securities be registered pursuant to this Agreement, the
Partnership shall use reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Partnership shall as expeditiously as possible:
(a) prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use reasonable best efforts to cause such registration
statement to become effective within 120 days of the date on which the holders
of such Registrable Securities have requested that such Registrable Securities
be registered pursuant to this Agreement (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Partnership shall furnish to the counsel selected by the holders of a majority
of the Registrable Securities covered by such registration statement copies of all
such documents proposed to be filed, which documents shall be subject to the
reasonable review and comment of such counsel);
(b) furnish to each seller of Registrable Securities such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such seller;
(c) use reasonable best efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
41
{61129935; 12}
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Partnership shall not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection, (ii) subject itself to taxation in any such jurisdiction
or (iii) consent to general service of process in any such jurisdiction);
(d) notify each seller of such Registrable Securities, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading, and prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus shall not contain
an untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
(e) cause all such Registrable Securities to be listed on each securities exchange on
which similar securities of the Partnership are then listed and, if not so listed, to
be listed on the NASD automated quotation system;
(f) provide a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such registration statement;
(g) enter into such customary agreements (including underwriting agreements in
customary form) and take all such other actions as the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including effecting a stock split or a combination of
shares);
(h) make available for inspection by any seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent organizational
documents and properties of the Partnership, and cause the Partnership's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(i) otherwise use reasonable best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve months beginning with the first day of the Partnership's first full fiscal
quarter after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder;
(j) permit any holder of Registrable Securities which holder, in its sole and exclusive
judgment, might be deemed to be an underwriter or a controlling person of the
42
{61129935; 12}
Partnership, to participate in the preparation of such registration or comparable
statement and to require the insertion therein of material, furnished to the
Partnership in writing, which in the reasonable judgment of such holder and its
counsel should be included;
(k) in the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any equity securities
included in such registration statement for sale in any jurisdiction, use reasonable
best efforts promptly to obtain the withdrawal of such order;
(1) use reasonable best efforts to cause such Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities;
(m) obtain a cold comfort letter from the Partnership's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters, which letter shall be addressed to the
underwriters; and use reasonable best efforts to cause such cold comfort letter to
also be addressed to the holders of such Registrable Securities; and
(n) obtain an opinion from the Partnership's outside counsel in customary form and
covering such matters of the type customarily covered by such opinions, which
opinion shall be addressed to the underwriters and the holders of such
Registrable Securities.
14.7 Registration Expenses. In connection with each Piggyback Registration, the
Partnership shall pay all Registration Expenses and shall reimburse the holders of Registrable
Securities included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities included in such
registration.
43
{B1129935; 121
ARTICLE 15
MISCELLANEOUS
15.1 Notices.
(a) Any and all notices, consents, approvals, offers, elections, demands, requests
and other communications required or permitted under this Agreement (each a
"Notice") shall be deemed adequately given only if in writing and the same shall
be delivered either in hand or by mail or FedEx, or similar expedited commercial
carrier, addressed to the recipient of the Notice, postpaid and registered or
certified with return receipt requested (if by mail), or with all freight charges
prepaid (if by FedEx or similar carrier).
(b) All communications to be sent hereunder shall be deemed to have been given for
all purposes of this Agreement upon the date of receipt or refusal.
(c) All Notices shall be addressed:
If to the General Partner, to:
John Hancock Timber Resource Corporation
99 High Street, 26th Floor
Boston, Massachusetts 02110
Attention: Daniel P. Christensen, President
with a copy to:
Hancock Natural Resource Group, Inc.
99 High Street, 26th Floor
Boston, Massachusetts 02110
Attention: Donna Frankel, Vice President and General Counsel
and with a copy to:
Sullivan &Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: Richard Teller
If to a Limited Partner, to the addresses set forth on Schedule 1 for such
Limited Partner.
(d) By giving the other parties Notice thereof, the parties hereto and their respective
successors and assigns shall have the right from time to time, and at any time
during the term of this Agreement, to change their respective addresses,
effective upon receipt by the other parties of such Notice.
15.2 Word Meanings. The words such as "herein," "hereinafter," "hereof' and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision in which such
44
{B1129935; 121
15.11 Amendments.
(a) Amendments by Consent. Any Limited Partner may propose an amendment to
this Agreement by submitting such proposed amendment to the General Partner
accompanied by an explanation of the purpose of such proposed amendment.
The General Partner shall submit to all of the Limited Partners the text of any
such proposed amendment to this Agreement and a statement by the General
Partner of the purpose of any such amendment. The General Partner may
include in any submission a statement of the view of the General Partner as to
the proposed amendment. Upon the Consent of the Limited Partners, such
amendment shall take effect, provided that no such amendment shall:
(J) increase the liability of any Partner or adversely affect any Limited Partner's
share of distributions or allocations of Profits or Losses of the Partnership,
without in each case the approval of the Partner involved; (il) in any manner allow
the Limited Partners to take part in the control of the Partnership's business;
(iii) without the consent of the General Partner, alter the status, rights, benefits,
powers and duties of the General Partner as set forth herein; or (iv) without the
unanimous consent of the Limited Partners, remove or alter the status, rights,
benefits, powers and duties of the Limited Partners as set forth herein.
Notwithstanding the foregoing or anything to the contrary contained elsewhere in
this Agreement, the unanimous consent of the Limited Partners shall be
necessary (x) to amend Section 2.5, Section 5.1 or Article 6, or (y) to change the
amount of any Capital Contribution of any Limited Partner other than pursuant to
Article 13. Any Consent of a Limited Partner may not be withdrawn or voided
once given.
(b) Other Amendments. In addition to any amendments otherwise authorized
herein, this Agreement may be amended from time to time by the General
Partner without the Consent of the Limited Partners: (i) to add to the
representations, duties or obligations of the General Partner or surrender any
right or power granted to the General Partner herein, for the benefit of the Limited
Partners; (ii) to preserve the status of the Partnership as an Entity taxable as a
partnership under the Code; (iii) to delete or add any provision of this Agreement
required to be so deleted or so added by any federal agency or by a state Blue
Sky commissioner or similar such official, which addition or deletion is deemed
by such staff, agency or official to be for the benefit or protection of the Partners;
and (iv) to admit Persons as Limited Partners in compliance with this Agreement.
(c) Execution of Amendments. Any amendment to this Agreement substituting or
adding a Limited Partner shall be signed by the General Partner and, in the case
of a substitution of a Limited Partner, by the Person to be substituted as a
Limited Partner. The execution of any such amendment on behalf of a Limited
Partner or any proposed Substitute Limited Partner may be effected by an
Attorney. Any amendment reflecting the Withdrawal of a General Partner need
be signed only by one of the remaining General Partners, if any, and any
successor General Partner.
46
{B1129935; 121
15.12 Additional Limited Partners. On or before March 30, 2012, the General Partner
may, without the approval or Consent of the Limited Partners, admit one or more Persons as
Limited Partners who shall have executed and delivered a subscription agreement, in
substantially the form and on the same terms of the subscription agreements executed by the
Persons listed on Schedule 1, an agreement ratifying this Agreement and agreeing to be bound
hereby and such other documents as shall be deemed appropriate by the General Partner.
15.13 Agreement in Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be considered an original and all such counterparts shall
constitute one and the same Agreement, binding upon all of the parties hereto, notwithstanding
that all of the parties may not be signatories to the same counterpart.
15.14 Partition. No Partner shall have the right while this Agreement remains in effect
to have any property of the Partnership partitioned, or to file a complaint or institute any
proceeding at law or in equity to have such property of the Partnership partitioned, and each
Partner hereby waives any such right.
[SIGNATURES TO FOLLOW IMMEDIATELY]
47
{81129935; 121
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement under seal as of the day and year first above written.
General Partner:
JOHN HANCOCK TIMBER RESOURCE
CORPORAT al+
By:
Name: S o to
Titl ice President
HNRG:
HANCOCK NATURAL RESOURCE GROUP, INC.
By:
Name- C' urtland L. Washburn
Title: Chief Investment Officer
Limited Partners:
THOSE PERSONS SO LISTED ON SCHEDULE 1
BY: JOHN HANCOCK TIMBER RESOURCE
CORPORATION, as attorney in fact
By:
Na e: S :ot st
Tit V'�e resident
Signature Page to Hancock Timberland XI LP Amended and Restated Limited Partnership
Agreement
{B1129935; 12}
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement"), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions,
Executed this QL�day of 1�'VoeM , 201,
LIMITED PARTNER;
_
QW MA& �
Name of Investor
By:
Ign� ,
Name: )(�_�� 10 �h
Title: Nyt
GENERAL PARTNER:
John Hancock Timber Resour e
Corporat
By;
Name � , C;6 1 j
Title.
I
i
I
j13113666i;3}
- 24 -
i
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE A URE PAG Placement
The undersigned, having received and reviewed the Confidential
Memorandum of Hancock Timberland XI LP Limited Partnership Agreement of Hancock
atdated December 9, 2010, as amended (the
"Memorandum" and the Amended and Rest ed
Timberland XI LP (the "Partnership Agreement"), hereby becomes a party to the Partnership
A reement and agrees to all of the terms and provisions of the Partnership Agreement and to
g
be bound by all of its terms and provisions.
Executed this Sdf day of at , 20JI
LIMITED PARTNER:
Miramar Firefi hters Retirement Plan
Name of In
By: ignatur
Name: James Este
Title: Chairman
a
By: ign
Name: an al Es arza
Title: Secretar
GENERAL PARTNER:
John Hancock Timber Resource
Corpo ion-'---77
By:
Nam
Title:
- 25 -
{B1265581;2}
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement"), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions.
Executed this L4day of 20_j�.
LIMITED PARTNER:
a �r �-P �6d Whet �oo J)lh(. .
Name of Investor/) i.s t
By:
si ture
Name: CT-(-A c,o (e.�
Title: Jc , c�er� C4LI-Y
GENERAL PARTN R: J
John Hancock Timber esource
Corpo a
By:
Na ne:
Title: V Pre �1 dt h�
(B1135661;3) - 25 -
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement"), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions.
Executed this 15th day of February, 2011.
LIMITED PARTNER:
BOARD OF TRUSTEES OF THE EMPLOYEES'
PENSION PLAN OF THE CITY OF
CLEARTER, FLORIDA
Y•
Frank V. Hibbard
Chairperson OFTIIAA
Approved a f Attest:
rt A. K u an Rosemarie Call
Pension Attorney City Clerk
GENERAL PARTNER:
John Hancock Timber Res urce
Corpo
By:
Dame: 5• to S-�-eLA
Title: yiCL Press CkAart
(61236635;2) - 26 -
HANCOCKTlK8BERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undereignmd, having received and reviewed the Confidential Private Placement
W1enlo[aOduno of Hancock Timberland X| LP dated December Q. 2010, as amended (the
"K4onoormndunn"), and the Amended and Restated Limited Partnership Agreement ofHancock
Timberland X| LP (the "Partnership Agreement"), hereby becomes o party to the Partnership
Agreement and agrees to all of the terms and provisions ofthe Partnership Agreement and to
ba bound by all of its terms and provisions.
Executed this day of . 201/.
PARTNER:LIMITED
1-
Name of Investor
_'.
ignatUe
Name:
Title: — [/ '
Corp GENERAL PARTNER:
'
/
Na
\
Title:
jB1135661;3} - 24 -
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement"), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions.
Executed this 16th day of November, 2011.
LIMITED PARTNER:
Hidalgo Family Investors LLC
Name of Investor
By:
Signature
Name: Martin Petri
Title: President
GENERAL PARTNE
John HancockTimber Res urce
Corp 'r ion
By:
Na-.., : T. Sc v S+7e
Title: V(CA. tire S 1 We rl I
{131135661;4) - 26 -
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement'), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions.
Executed this day of (;b'zt A-1 , 201/.
LIMITED PARTNER:
(2, A22 Gam-, 1--L,::_
Name of Investor
By: 4�
Sign,Ature
Name:
Title: An C1
GENERAL PARTNER,
John Hancock Timber Resourc
Corpor tii
By:
N e: t o E s
Title: U t CA reS 1 C4 A
(131135661;3) - 24 -
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement'), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions.
Executed this AO D(day of 201_a-
LIMITED PARTNER:
TY EMPLOYEES'
RETIREMENT SYSTEM,; _
Name of lnvessjpr
By: = �.
Signature
Name: THOMAS MOUTES
Title: GENERAL MANAGER
GENERAL PARTNER:
John Hancock ' er Resou ce
Corpo :!E
By:
Ngmg sC.
Title: V i Cil. �f'�it fiUAIIA
APPROVED AS TO FORM
�/-EP= O'IYATTORNEY DATE
(61135661;7) -25 -
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement"), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions.
Executed this 4 day of January , 2012
LIMITED PARTNER:
John Hancock Life Insurance Company(U.S.A)
Name of Invest-Kr/
By:
Signature
Name: Scott Hartz
Title: Executive Vice President
GENERAL PARTNER:
John Hancock Timber Resource
Corporation
By:
Name:
Title:
(131136661;7) - 24 -
SCHEDULE 1
Names and Addresses of Limited Partners Units
USAA Master Trust (Pensions and RSP) 1000
9800 Fredericksburg Road
San Antonio, TX 78288
City of Miramar Firefighters' Retirement Plan 20
c/o Pension Resource Center
4306 Northlake Blvd., #206
Palm Beach Gardens, FL 33410
Church of God Benefits Board, Inc. (fbo Ministers' Retirement Plan) 20
P.O. Box 4608
4205 North Ocoee Street
Cleveland, TN 37320
Board of Trustees of the Employees' Pension Plan of the City of 80
Clearwater, Florida
112 South Osceola Avenue
Clearwater, FL 33756
Westchester Community College Foundation, Inc. 12
Hartford Hall
75 Grasslands Road
Valhalla, NY 10595
Hidalgo Family Investors LLC 40
165635 th Street NW
Washington, D.C. 20007
RaAmBre, LLC 100
282 Little Harbour Lane
Naples, FL 34102
John Hancock Life Insurance Company (U.S.A.) 250
John Hancock Place, PO Box 111
Boston, MA 02117
Los Angeles City Employees' Retirement System 200
City of Los Angeles
360 E. Second Street, 8th Floor
Los Angeles, CA 90012-4207
TOTAL 1722
{B1129935; 12}
EXHIBIT A-FORM OF ADVISORY AGREEMENT
ii
{B1129935; 12}
EXHIBIT A
HANCOCK TIMBERLAND XI LP
ADVISORY AGREEMENT
as of
2012
{61129976;4}
Table of Contents
Page
ARTICLE1 Definitions...............................................................................................................1
ARTICLE 2 General Duties of the Advisor..................................................................................2
ARTICLE 3 Execution Authority; Power of Attorney...................................................................4
ARTICLE 4 Bank Accounts; Short-term Investments..................................................................4
ARTICLE5 Records...................................................................................................................5
ARTICLE 6 REIT Qualification; Compliance with Law................................................................5
ARTICLE 7 No Guaranty; Standard of Care...............................................................................6
ARTICLE 8 Use of Third Parties; Contracting with Subsidiaries.................................................6
ARTICLE9 Compensation.........................................................................................................7
ARTICLE 10 Expenses of the Advisor........................................................................................7
ARTICLE 11 Expenses of the Partnership .................................................................................7
ARTICLE 12 Limits of Advisor Responsibility.............................................................................8
ARTICLE 13 Conflicts of Interest................................................................................................9
ARTICLE14 Confidentiality........................................................................................................9
ARTICLE15 Term; Termination...............................................................................................10
ARTICLE 16 Default, Bankruptcy, Etc. of the Advisor..............................................................11
ARTICLE 17 Action Upon Termination.....................................................................................11
ARTICLE18 Miscellaneous .....................................................................................................12
i
{B]129976;4)
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (this "Agreement") is entered into effective as of
2012, by and between Hancock Timberland XI LP, a Delaware limited
partnership (the "Partnership") and Hancock Natural Resource Group, Inc., a Delaware
corporation (the "Advisor").
RECITAL
The Partnership has been organized for the purpose of buying, selling, holding and
financing commercial timberland properties and securities of entities organized for the same
purpose. The Partnership expects to acquire commercial timberland properties and securities
of entities buying or owning commercial timberland properties through one or more subsidiaries.
The Advisor is registered as an investment adviser under the Investment Advisers Act of
1940 (the "Advisers Act") and is engaged in the business of providing investment management
and advisory services with respect to investments in commercial timberland properties and for
providing management and administrative services with respect to the ownership of commercial
timberland properties.
NOW, THEREFORE, it is agreed that the Advisory Agreement shall be amended and
restated in its entirety as follows:
ARTICLE 1
DEFINITIONS
The following terms, as used in this Agreement, shall have the following meanings:
Affiliate: any person entity, company, corporation, limited partnership, general
partnership, or joint venture ("Person"), that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, another Person.
One Person shall be deemed to be in control of a second Person if it owns more than 50% of
the voting securities or has the right to appoint a majority of the directors of, or exercises
substantially similar control over, the second Person.
Governmental Authority: any government, political subdivision, or other entity
exercising executive, legislative, judicial, regulatory or administrative functions of a government
or political subdivision in the United States.
Internal Revenue Code: the Internal Revenue Code of 1986.
Investment Guidelines: the investment objectives and guidelines of the Partnership
pursuant to which the Advisor will perform its duties, a copy of which is attached as Exhibit A.
Registration: the registration of the Partnership's Units under the Securities Act of 1933
and causing such Units to be listed on a United States National Securities Exchange.
Subsidiary: any Person more than 50% of the equity securities of which is owned
directly, or indirectly through one or more intermediaries, by another Person.
(B1129976;4)
Timberland: commercial timberland properties including fee ownership and leasehold
interests in timber producing real estate, timber cutting contracts and other rights related to
timber within and outside the United States.
Timberland Investments: investments in Timberland and Timberland Securities
consistent with the Investment Guidelines, whether made by the Partnership directly or through
one or more Subsidiaries.
Timberland Securities: securities (both debt and equity) of a direct or indirect owner of
Timberland managed, directly or indirectly, by the Advisor or controlled by the Partnership or
any of its Affiliates, provided, Timberland Securities shall not include any publicly traded
securities.
ARTICLE 2
GENERAL DUTIES OF THE ADVISOR
The Advisor shall use its best efforts to present to the Partnership a continuing and
suitable investment program consistent with the Investment Guidelines. Subject to the
supervision of the general partner of the Partnership ("General Partner") and upon its direction,
and consistent with the Investment Guidelines, the Advisor shall:
(i) serve as the Partnership's investment advisor, with its obligations to
include providing research and economic and statistical data in
connection with the Partnership's Timberland Investments;
(ii) investigate and evaluate opportunities to make Timberland Investments,
make recommendations concerning such opportunities to the General
Partner and in connection therewith conduct site inspections, analyze
timber and timber product supply and demand in the regional and
international markets and evaluate each potential Timberland Investment
on a discounted cash flow basis and from the perspective of portfolio
diversification in terms of geography, species, age class, end product and
land ownership (fee simple or lease) and for factors such as water
access, soil fertility, climate, health of species, proximity to transportation
and processing facilities, capital costs needed for improvements, effects
of governmental legislation on projected management and capital
expenses and environmental factors, such as the existence of
endangered plant and wildlife species and possible environmentally
hazardous materials;
(iii) act as attorney-in-fact or agent in acquiring and disposing of Timberland
Investments and in handling, prosecuting and settling any claims of the
Partnership and its Subsidiaries;
(iv) administer the day-to-day operations of the Partnership and its
Subsidiaries;
(v) obtain for the Partnership and its Subsidiaries the services of
accountants, legal counsel, appraisers, insurers, brokers, engineers,
environmental consultants and such other professionals as the Advisor
deems necessary or advisable;
- 2 -
(B1129976;4}
(vi) investigate, select and conduct relations and enter into appropriate
contracts on behalf of the Partnership and its Subsidiaries with other
individuals, corporations and entities in furtherance of the investment
activities of the Partnership and its Subsidiaries;
(vii) develop, implement, periodically review and update long term plans and
annual budgets for Timberland and identify and implement silvicultural
practices that it believes will maximize total returns; monitor and adjust
the long term plans and budgets in anticipation of, and in response to,
market conditions;
(viii) arrange for site preparation, seeding, planting, fertilization, irrigation,
timber marketing and sales, timber inventory and mapping, growth and
yield analysis, harvest scheduling, road, bridge and gate construction and
maintenance, surveys of insect disease or other damage, control of
weeds and insect pests, periodic thinning of timber stands, controlled
burning, irrigation, property boundary line maintenance, surveys and
aerial surveys and undertake such other activities associated with the
direct operation and protection of Timberland as are reasonably
appropriate and customary;
(ix) obtain for the Partnership and its Subsidiaries such services as may be
required for activities relating to Timberland including obtaining the
services of local property managers;
(x) exercise or abstain from exercising any option, warrant, privilege or right,
including without limitation voting rights, with respect to any Timberland
Securities purchased by the Partnership or its Subsidiaries, issue orders
for, or make purchases or sales of Timberland Securities directly to or
with a broker, dealer or other person; and cause discounts, commissions,
premiums and other fees, charges and expenses to be paid to brokers
and dealers in connection with any of the transactions described in this
subsection (x);
(xi) administer such day-to-day bookkeeping and accounting functions as are
required for the proper management of the assets of the Partnership and
its Subsidiaries, contract for audits and prepare or cause to be prepared
such reports as may be required by any governmental authority in
connection with the ordinary conduct of the Partnership's and its
Subsidiaries' business, review the accounting of income and expenses,
report on the financial status of the Partnership's Timberland Investments;
(xii) provide office space, office equipment and the use of accounting or
computing equipment when required, and provide personnel necessary
for the performance of the foregoing services; and
(xiii) prepare, or cause to be prepared:
(A) within 60 days after the end of each of the first three quarters of
each fiscal year of the Partnership, beginning with the first full quarter
after [DATE OF CLOSING], the Partnership (a) an unaudited
- 3-
{61129976;4}
consolidated balance sheet as at such quarterly period, (b) unaudited
consolidated statements of operations for such quarterly period, and (c)
an unaudited consolidated statement of distributable cash for such
quarterly period, all of which shall be prepared in accordance with
generally accepted accounting principles;
(B) within 120 days after the end of each fiscal year of the
Partnership, an annual report containing (a) an audited consolidated
balance sheet as of the end of such fiscal year, and (b) audited
consolidated statements of operations, shareholders' equity and of
changes in financial position for such fiscal year, all of which shall be
prepared in accordance with generally accepted accounting principles
and accompanied by an auditor's report containing an opinion of the
Partnership's independent accountants;
(C) together with the annual reports described in subsection (B) a
report in narrative form summarizing the status of the Partnership's
Timberland Investments; and a report of the activities of the Partnership
and its Subsidiaries during the fiscal year then ended; and
(D) such other reports and information as may be reasonably
requested by the General Partner from time to time.
ARTICLE 3
EXECUTION AUTHORITY; POWER OF ATTORNEY
The Advisor shall have the authority to execute all documents in the Partnership's and
its Subsidiaries' names reasonably required for, and to do all things reasonably relating to, the
operation and management of Timberland Investments under this Agreement in a manner
consistent with the provisions of this Agreement, the long term management plans and annual
budgets; provided, anything in this Agreement to the contrary notwithstanding, the Advisor is
authorized to take any action it reasonably believes necessary or desirable to protect and
preserve the Partnership's Timberland Investments.
In order to facilitate the acquisition, disposition and operation of the Partnership's
Timberland Investments and the provision of the services (including without limitation the
opening and operation of bank accounts referred to in this Agreement), the execution of leases,
purchase and sale agreements (or assignment and assumption agreements if a purchase and
sale agreement was executed in the Advisor's name or that of an Affiliate of the Advisor),
easements and other contracts, applications for operating permits and other similar actions in
the name of the Partnership and its Subsidiaries, upon the request of the Advisor, the
Partnership and its Subsidiaries shall execute and deliver one or more limited powers-of-
attorney in favor of the Advisor substantially in the form of Exhibit B. The Advisor shall only act
under the power-of-attorney in accordance with its rights and obligations and subject to any
limitations contained in this Agreement.
ARTICLE 4
BANK ACCOUNTS; SHORT-TERM INVESTMENTS
The Advisor shall maintain one or more bank accounts, either in the name of the Advisor
or if directed by the Partnership, in the name of the Partnership or one or more of its
Subsidiaries, into which income generated by the Timberland Investments and other amounts
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{61129976;4}
funded by the Partnership including working capital reserves shall be deposited. If such
accounts are maintained in the Advisor's name, the Advisor shall not commingle in such
accounts any moneys held by the Advisor for its own account or for the account of another client
and such accounts shall be designated as accounts for which the Advisor is acting as agent for
the benefit of the Partnership or one of its Subsidiaries . If such accounts are maintained in the
name of the Partnership or one of its Subsidiaries, the Advisor and the appropriate sub-
manager shall be provided with appropriate evidence of authority as needed to permit access to
such accounts for the administration of this Agreement and the management of the relevant
Timberland Investment. Cash not required for a pending acquisition, scheduled capital
improvement, working capital reserves or other expense contemplated by the relevant long term
management plan and annual budget shall be distributed to the Partnership no less frequently
than quarterly.
The Advisor shall either remit all cash to or as directed by the Partnership, or deposit
such cash in one or more bank accounts as provided in this Article 4. Nothing in this
Agreement, or in any policy, guideline or other directive issued pursuant to this Agreement, shall
be deemed to authorize the Advisor (nor shall the Advisor be responsible) to undertake the
short-term investment of any cash held for the account of the Partnership or any of its
Subsidiaries pending the closing of any acquisition of a Timberland Investment or of any cash
generated by any Timberland Investment.
ARTICLE 6
RECORDS
The Advisor shall maintain appropriate books of account and records relating to services
performed pursuant to this Agreement, which books of account and records shall be available
for inspection by representatives of the Partnership upon reasonable notice during ordinary
business hours.
ARTICLE 6
REIT QUALIFICATION; COMPLIANCE WITH LAW
Anything else in this Agreement to the contrary notwithstanding, (i) with respect to any
Subsidiary of the Partnership which has elected to be taxed as a real estate investment trust
under the Internal Revenue Code, the Advisor shall refrain from any action that would adversely
affect the status of such Subsidiary as a real estate investment trust, (ii) the Advisor shall refrain
from any action that would make the Partnership or any of its Subsidiaries subject to the
Investment Company Act of 1940, as amended, and related matters, violate any law, rule,
regulation or statement of policy of any Governmental Authority having jurisdiction over the
Partnership or any of its Subsidiaries, or otherwise not be permitted by the limited partnership
agreement of the Partnership or the charter documents of any Subsidiary, except if such action
shall be ordered by the General Partner, in which event the Advisor shall promptly notify the
General Partner of the Advisor's judgment that such action would adversely affect such status
or violate any such law, rule or regulation, limited partnership agreement or other charter
documents and shall refrain from taking such action pending further clarification or instructions
from the General Partner. In addition, the Advisor shall take such affirmative steps which, in its
judgment made in good faith, or in the judgment of the General Partner as transmitted to the
Advisor in writing, would prevent or cure any action described in (i) or(ii) in this Article 6.
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(81129976;4)
ARTICLE 7
NO GUARANTY; STANDARD OF CARE
In the performance of the services under this Agreement, the actions of the Advisor shall
be based on its professional judgment and experience and consistent with the long term
management plans and annual budgets, as updated from time to time, and the Investment
Guidelines, but in no way shall the undertakings or recommendations of the Advisor or the
development of the long term management plans and annual budgets be considered or
construed as a guarantee of the performance of or of any specific return with respect to any of
the Partnership's Timberland Investments or guarantee that performance of any of the
Partnership's Timberland Investments will equal or exceed any projected return.
The Advisor shall discharge its duties under this Agreement with the care, skill,
prudence, and diligence under the circumstances then prevailing that an institutional investor,
reasonably experienced in the business of investing in commercial timberland would use in
investing its own funds. All activities of the Advisor shall be conducted in a timely, efficient,
orderly and professional manner by the Advisor and its agents.
ARTICLE 8
USE OF THIRD PARTIES; CONTRACTING WITH SUBSIDIARIES
The Advisor shall provide personnel responsible for discharging the Advisor's duties and
obligations under this Agreement who shall be experienced in the performance of the various
functions for which they are retained. The Advisor may provide some or all of the services
under this Agreement either directly or indirectly through one or more agents, sub-managers or
independent contractors, any of which may be an Affiliate of the Advisor, including its property
management Subsidiaries, Hancock Forest Management, Inc. ("HFM"), which the Advisor
intends to hire to provide local property management services in the United States, and
Hancock Forest Management (NZ) Limited ("HFM (NZ)"), which the Advisor intends to hire to
provide local property management services in New Zealand; provided that (i) the use of any
such third party shall not relieve the Advisor from its obligations under this Agreement; (ii)
whenever feasible, the terms of any such third party's appointment shall be in writing; and (iii) in
the case of an Affiliate(s) of the Advisor, the fees and expenses of such Affiliate(s) are not in
excess of fees and expenses which are reasonably appropriate and customary, are no less
favorable than those which could be obtained in an arm's length, transaction with an unrelated
third party provided in the case of HFM and its subsidiaries, the fees of HFM and its subsidiaries
are at or below fees charged by third party timberland property managers for comparable
services on comparable properties. To verify compliance with the foregoing standard, the
Advisor will undertake the procedures set forth in Exhibit C with respect to HFM and
comparable procedures with respect to Affiliates.
The Advisor or an investment advisory Affiliate of the Advisor may enter into advisory
agreements to provide investment management and advisory services with respect to
investments in commercial timberland properties and for providing management and
administrative services with respect to the ownership of commercial timberland properties
comparable to those provided under this Agreement directly with one or more Subsidiaries of
the Partnership, provided the fees and expenses of the Advisor or such investment advisory
Affiliate of the Advisor shall not be in excess of the fees and expenses paid to the Advisor under
this Agreement and shall not include any Performance Incentive Fee (defined in Exhibit D).
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{61129976;4}
ARTICLE 9
COMPENSATION
Fees for the Services rendered by the Advisor shall be as set forth in Exhibit D. The
Advisor shall be entitled to deduct such fees from the cash flow generated by the Timberland
Investments. If, in the case of any Timberland Investment which is made by a Subsidiary of the
Partnership and/or consists of Timberland Securities, any investment management fees are
paid to the Advisor or an Affiliate of the Advisor by such Subsidiary or any other owner of the
Timberland, the fees set forth in Exhibit D shall be reduced by an amount equal to the
investment management fees paid by such Subsidiary or other owner.
ARTICLE 10
EXPENSES OF THE ADVISOR
Without regard to the compensation received by the Advisor from the Partnership
pursuant to this Agreement, the Advisor shall bear the following expenses incurred in
connection with the performance of its duties under this Agreement:
(i) employment expenses of the personnel employed by the Advisor;
(ii) travel and other expenses paid to directors, officers and employees of the
Advisor, except travel and other expenses of such persons who are
directors, officers and employees of the General Partner incurred in their
capacity as such and when acting on behalf of the Partnership;
(iii) rent, telephone, utilities, office furniture, equipment and machinery and
other office expenses of the Advisor, except to the extent such expenses
relate solely to an office maintained by the Partnership separate from the
office of the Advisor; and
(iv) miscellaneous administrative expenses incurred in supervising,
monitoring and inspecting the Partnership's Timberland Investments or
relating to performance by the Advisor of its obligations hereunder.
ARTICLE 11
EXPENSES OF THE PARTNERSHIP
The Partnership shall pay all its expenses not payable by the Advisor, and, without
limiting the generality of the foregoing, the following expenses of the Partnership shall be paid
by the Partnership:
(i) the cost of borrowed money by the Partnership or any of its Subsidiaries;
(ii) taxes on income and taxes and assessments on Timberland, if any, and
all other taxes applicable to the Partnership or any of its Subsidiaries;
(iii) legal, auditing, accounting and other fees of professionals engaged on
behalf of the Partnership or any of its Subsidiaries;
(iv) expenses of forming Subsidiaries of the Partnership and of revising,
amending, converting or modifying the Partnership's or any of its
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{B1129976;4}
Subsidiaries' organizational documents, the Registration or winding up
the Partnership or any of its Subsidiaries;
(v) travel and other expenses paid directors, officers and employees of the
General Partner incurred in their capacities as such (but not in their
capacities as officers or employees of the Advisor or the General Partner
when not acting on behalf of the Partnership) and fees and travel and
other expenses paid to advisors, contractors, mortgage services,
consultants, and other agents and independent contractors employed by
or on behalf of the Partnership;
(vi) expenses directly connected with the acquisition and disposition of the
Partnership's Timberland Investments (including brokerage and sales
commissions);
(vii) all costs and expenses associated with the direct operation of each of the
Partnership's Timberland Investments, as described in the applicable long
term management plan or annual budget, or as otherwise agreed to by
the Partnership, including but not limited to the reasonable fees and
expenses of property managers for preparation of long term management
plans, fees and expenses of property managers and other contractors,
appraisers, property specific insurance, improvement, maintenance,
repair, leasing, timber cruises, environmental surveys, property
surveillance, inventory, site preparation and reforestation, road and
building construction and maintenance, insect, animal and stocking
control, and such other activities associated with the direct operation and
protection of the Partnership's Timberland Investments as are reasonably
appropriate and customary;
(viii) all insurance costs incurred in connection with the Partnership or any of
its Subsidiaries or in connection with any officer and director indemnity
agreement to which the Partnership or any of its Subsidiaries is a party;
(ix) expenses connected with payments of dividends or interest or
contributions in cash or any other form made or caused to be made by
the General Partner to the limited partners of the Partnership;
(x) all expenses connected with communications to the limited partners of the
Partnership; and
(xi) expenses relating to any office or office facilities maintained by the
Partnership or any of its Subsidiaries separate from the office of the
Advisor.
ARTICLE 12
LIMITS OF ADVISOR RESPONSIBILITY
The Advisor, its shareholders, directors, officers, employees and Affiliates will not be
liable to the Partnership or any of its Subsidiaries, their respective partners, shareholders, or
others, except by reason of acts constituting bad faith, fraud, willful or wanton misconduct or
gross negligence. The Partnership and its Subsidiaries shall reimburse, indemnify and hold
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{B1129976;4)
harmless the Advisor, its shareholders, directors, officers and employees and its Affiliates for
and from any and all expenses, losses, damages, liabilities, demands, charges and claims of
any nature whatsoever in respect of or arising from any acts or omissions of the Advisor
undertaken in good faith and in accordance with the standard set forth above pursuant to the
authority granted to it by this Agreement.
ARTICLE 13
CONFLICTS OF INTEREST
The Advisor may now or in the future maintain or manage properties and provide
discretionary or nondiscretionary advisory services for a number of other accounts and clients,
including the Advisor's own account, general investment accounts of its Affiliates, and various
unregistered separate accounts of John Hancock Life Insurance Company (U.S.A.) (one of the
Advisor's Affiliates). Depending upon investment objectives, policies and guidelines, cash
availability and other factors, the Advisor,may render advice or take action with respect to such
other accounts and clients which is similar to or differs from the advice rendered or the timing or
nature of the action taken with respect to the Partnership's Timberland Investments, and
accordingly, transactions for such other accounts and clients may or may not be consistent with
transactions with respect to the Partnership's Timberland Investments. It is understood that the
Advisor, its stockholders, officers, directors, Affiliates, agents, representatives and employees,
and any other account, client or Affiliate of the Advisor or its Affiliates, may have, acquire,
increase, decrease or dispose of positions in investments, including without limitation
Timberland Investments, at or about the time that the Advisor is acquiring or disposing of
positions in the same or similar investments with respect to the Partnership's Timberland
Investments. When opportunities occur which are consistent with the investment objectives,
policies and operating guidelines of more than one account or client, it is the policy of the
Advisor to not favor one account or client over another, and to allocate such investment
opportunities to the particular accounts or clients involved in accordance with Advisor's
Investment Allocation Policy as from time to time in effect. A copy of the Advisor's Investment
Allocation Policy as of the date of this Agreement is attached as Exhibit E.
Directors, officers, employees and agents of the Advisor or of its Affiliates may serve as
directors, officers, employees, agents, nominees or signatories of the General Partner. When
executing documents while acting in such capacities for the Partnership, such persons shall use.
their respective titles in the General Partner. Such persons shall receive no compensation from
the Partnership for their services to the Partnership in any such capacities.
ARTICLE 14
CONFIDENTIALITY
(i) Each party hereby agrees and covenants to keep confidential any non-
public information ("confidential information") relating to the other party's
business, finances and operations to which it obtains access and that it
will take all reasonable precautions to protect such confidential
information of the other party or any part thereof from any use, disclosure
or copying except as expressly authorized by this Agreement or such
party, or as required by applicable law, provided however, the Advisor,
the Partnership and the General Partner acknowledge that each has
obligations to disclose and deliver information to one or more of the
limited partners of the Partnership, and this Article 14 shall not prohibit
such disclosure and delivery obligations.
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For greater certainty, the Advisor hereby agrees and covenants to keep
confidential any confidential information relating to the business, finances
and operations of the Partnership and the Timberland Investments to
which it obtains access and that it will take all reasonable precautions to
protect such confidential information from any use, disclosure or copying
except as expressly authorized by this Agreement; provided that the
Advisor may disclose confidential information to (i) its directors, officers,
employees, agents, attorneys and affiliates, (ii) its professional advisors,
agents and subcontractors, provided that the Advisor shall simultaneously
disclose the confidential nature thereof and request that such person hold
confidential the confidential information substantially in accordance with
the terms of this Article 14, (iii) any federal or state regulatory authority
having jurisdiction over the Advisor, or (iv) to any other person (x) to the
extent, reasonably necessary to comply with any law, rule, regulation,
order, subpoena or other legal process applicable to the Advisor or (y) as
appropriate in connection with any litigation to which the Advisor is a
party.
(iii) Confidential information of a party shall not include information which has
been disclosed to the public, becomes available to the public through no
fault of the other party or which is disclosed to the other party by a third
party who had lawfully obtained such information and without a breach of
the third party's confidentiality obligations.
(iv) Upon termination of this Agreement, the Advisor shall forthwith deliver to
the Partnership all records, documents and books of account which are in
the possession or control of the Advisor and which relate directly or
indirectly to the Timberland Investments; provided, however, that the
Advisor may retain copies of such records, (x) to the extent reasonably
necessary to comply with documents and books of account, any law, rule,
regulation, order, subpoena or other legal process applicable to the
Partnership or (y) as appropriate in connection with any litigation to which
the Advisor is a party.
ARTICLE 15
TERM; TERMINATION
This Agreement shall continue from the date first above written until disposition of the
last Timberland Investment unless sooner terminated as provided in Article 16 or by action in
writing or vote at a meeting of limited partners of the Partnership holding at least 66.67% of the
`Pro Rata Percentage' (as defined in the Amended and Restated Limited Partnership
Agreement of the Partnership), which termination shall be effective on thirty (30) days prior
written notice to the Advisor.
Article 17 shall govern the rights, liabilities and obligations of the parties upon
termination of this Agreement; and, except as provided in Article 17, such termination shall be
without further liability of either party to the other than for breach or violation of this Agreement
prior to termination.
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{61129976;4}
ARTICLE 16
DEFAULT, BANKRUPTCY, ETC. OF THE ADVISOR
At the sole option of the Partnership, this Agreement may be terminated immediately
upon written notice of such termination from the General Partner to the Advisor if any of the
following events shall have occurred:
(i) the Advisor shall have violated any material provision of this Agreement
and, after written notice from the General Partner of such violation, shall
have failed to cure such default within thirty (30) days;
(ii) a petition shall have been filed against the Advisor for an involuntary
proceeding under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, and such petition shall not have been
dismissed within ninety (90) days of filing; or a court having jurisdiction
shall have appointed a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Advisor for any substantial portion of
its property, or ordered the winding upon or liquidation of its affairs, and
such appointment or order shall not have been rescinded or vacated
within ninety (90) days of such appointment or order; or
(iii) the Advisor shall have commenced a voluntary proceeding under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have made any general assignment for the benefit of
creditors, or shall have failed generally to pay its debts as they became
due.
The Advisor agrees that, if any of the events specified in subsections (ii) or (iii) of this
Article 16 shall occur, it will give written notice thereof to the General Partner within seven (7)
days following the occurrence of such event.
ARTICLE 17
ACTION UPON TERMINATION
From and after the effective date of any termination of this Agreement pursuant to
Article 15 or 16, the Advisor shall be entitled to no compensation for services rendered
hereunder for the then-current term of this Agreement, but shall be paid, on a pro rata basis, all
compensation due for services performed prior to such termination. Upon such termination, the
Advisor immediately shall:
(i) pay over to the Partnership all monies collected and held for the account
of the Partnership or any of its Subsidiaries by it pursuant to this
Agreement, after deducting therefrom any accrued Fees and
reimbursements for its expenses to which it is then entitled;
(ii) deliver to the General Partner a full and complete accounting, including a
statement showing all sums collected by it and a statement of all sums
held by it for the period commencing with the date following the date on
its last accounting to the General Partner; and
(B1129976;4}
(iii) deliver to the General Partner all property and documents of the
Partnership and any Subsidiary of the Partnership then in its custody or
possession.
ARTICLE 18
MISCELLANEOUS
(a) Notices. Any notice, approval or other communication required or permitted
under this Agreement shall be in writing and shall be delivered personally or by
commercial overnight courier service, or sent by certified, registered or express
mail, postage prepaid, and shall be deemed duly given when so delivered to the
following addresses:
To the Advisor: Hancock Natural Resource Group, Inc.
Floor 26
99 High Street
Boston, MA 02110-2320
Attn: Director, Portfolio Management
and Client Service
To the Partnership: Hancock Timberland XI LP
Floor 26
99 High Street
Boston, MA 02110-2320
Attn: General Partner
Either party hereto may from time to time by notice in writing served upon the other as
aforesaid designate a different mailing address or a different or additional person to which all
such notices or demands thereafter are to be addressed.
(b) Waivers and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions
hereof may be waived only by a written instrument signed by the Partnership and
the Advisor or, in the case of a waiver, the party waiving compliance, provided no
amendment may be made to: (i) the provisions of Article 2 which would reduce
the scope of the Advisor's services, (ii) the Investment Guidelines attached as
Exhibit A, (iii) the provisions of Article 6, (iv) the provisions of Article 7 which
would reduce the standard of care of the Advisor, (v) the provisions of Article 9
or the Fee Schedule attached as Exhibit D which would increase the fees paid to
the Advisor, (vi) the provisions of Article 11 to expand the expenses payable by
the Partnership, (vii) the provisions of Article 12 in a manner which would modify
the exculpation or indemnification standards in a manner adverse to the
Partnership or the limited partners, (viii) the provisions of Article 15 in a manner
which would limit the Partnership's ability to terminate this Agreement, or (ix) this
Section (b), unless approved by action in writing or vote at a meeting of limited
partners of the Partnership holding at least 66.67% of the `Pro Rata
Percentages'. No delay on the part of any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege under this
Agreement, nor any single or partial exercise of any right, power or privilege
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(B1129976;4)
hereunder, preclude any other or further exercise thereof or the exercise of any
other right, power or privilege under this Agreement.
(c) Cumulative Remedies. The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies which any party may otherwise
have at law or in equity. The rights and remedies of any party arising out of or
otherwise in respect of any inaccuracy in or breach of any representation,
warranty, covenant or agreement contained in this Agreement shall in no way be
limited by the fact that the act, omission, occurrence or other state of facts upon
which any claim of any such inaccuracy or breach is based may also be the
subject matter of any other representation, warranty, covenant or agreement
contained in this Agreement (or in any other agreement between the parties) as
to which there is no inaccuracy or breach.
(d) Binding Effect. This Agreement and the rights, covenants, conditions and
obligations of the respective parties hereto and any instrument or agreement
executed pursuant hereto shall be binding upon the parties and be binding upon
the successors, assigns and legal representatives of the respective parties
hereto.
(e) Further Assurance. Each of the parties hereto shall execute such further
documents and other papers and perform such further acts as may be
reasonably required or desirable to carry out the provisions of this Agreement.
(f) Incorporation of Amendments to Applicable Law. Any references to a law or
to any regulations or administrative pronouncements thereunder, shall be
deemed to include a reference to any amendments thereof and any successor
provisions thereto.
(g) Assignment. Neither this Agreement nor any rights or obligations under this
Agreement may be assigned by either party without the prior written consent of
the Partnership or the Advisor, as appropriate, provided that the consent of the
Advisor shall not be unreasonably withheld, and provided that the Partnership
may assign this Agreement in whole or part to an Affiliate of the Partnership
without the consent of, but upon notice to, the Advisor.
(h) Counterparts. This Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) Section Headings. The section headings of this Agreement are for convenience
of reference only and shall not be deemed to alter or affect any provision hereof.
(j) Governing Law and Venue. The validity of this Agreement and of any of its
terms or provisions, as well as the rights and duties of the parties to this
Agreement, shall be governed by the laws of the Commonwealth of
Massachusetts (without regard to any conflict of laws provisions) to the extent
such laws have not been preempted by applicable federal law.
(k) NCREIF. Article 14, "Confidentiality", notwithstanding, nothing in this Agreement
shall prevent or prohibit the Advisor from submitting property level or portfolio
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(B1129976;4}
level performance data to the National Counsel of Real Estate Investment
Fiduciaries ("NCREIF"), for inclusion in the NCREIF Timberland Index.
(1) Severability. Should one or more provisions of this Agreement be held by any
court to be invalid, void or unenforceable, the remaining provisions shall
nevertheless continue in full force.
(m) Independent Contractor. In the performance of this Agreement, the Advisor
and its employees and subcontractors shall, for all purposes herein, be deemed
to be acting as independent contractors and not as officers, employees or agents
of the Partnership.
(n) Not a Partnership or Joint Venture. The Advisor and the Partnership are not
partners or joint venturers with each other, and nothing herein shall be construed
so as to make them such partners or joint venturers or impose any liability as
such on either of them.
(o) Form ADV Part II. The Partnership acknowledges receipt of Part II of the
Advisor's Form ADV filed with the Securities and Exchange Commission, as
required by Rule 204-3 under the Advisers Act, at least 48 hours prior to the date
of execution of this Agreement.
(p) Entire Agreement. This Agreement (including the Exhibits attached hereto)
embodies the entire understanding of the parties, supersedes any prior
agreements or understandings with respect to the subject matter hereof.
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{B1129976;4}
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, under seal, as of the day and year first above written.
Hancock Timberland XI LP
By: John Hancock Timber Resource Corporation,
its General Partner
By:
Name:
Title:
Hancock Natural Resource Group, Inc.
By:
Name:
Title:
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{81129976;4}
EXHIBIT A
INVESTMENT GUIDELINES
Investment Policy. The Partnership seeks to acquire Timberland Investments. The
Partnership expects to make at least four different Timberland Investments. The Timberland
represented by the Timberland Investments and acquired with no less than 50% of the
aggregate capital of the Partnership will be located in at least two of the three primary
timberland regions in the United States (West, North and South). Not more than 50% of the
capital of the Partnership may be invested in Timberland Investments where the Timberland is
located outside of the United States (with Argentina, Australia, Brazil, Canada, Chile, New
Zealand, Uruguay and western Europe, including the Scandinavian countries, Ireland, and the
UK to be considered by the Advisor). The Timberland constituting the Timberland Investments
will be diversified by species, age class and end products. The Timberland Investments are
expected to be primarily in Timberlands but may be made through the acquisition of Timberland
Securities.
The Partnership seeks to preserve and protect its capital base, realize profits from the
long term appreciation in market value of Timberland Investments, and provide distributions of
current income to its limited partners quarterly.
Acquisition Policies. Prior to making a Timberland Investment, the Advisor will conduct
site inspections, analyze timber and timber product supply and demand in the regional and
international markets and evaluate each potential Timberland Investment on a discounted cash
flow basis and from the perspective of portfolio diversification in terms of geography, species,
age class, end product and land ownership (fee simple or lease) and for factors such as water
access, soil fertility, climate, health of species, proximity to transportation and processing
facilities, capital costs needed for improvements, effects of governmental legislation on
projected management and capital expenses and environmental factors, such as the existence
of endangered plant and wildlife species and possible environmentally hazardous materials.
For each such Timberland Investment, the Advisor will develop (or review, in the case of an
investment in Timberland Securities) a long term plan, annually update such plan and prepare
annual operating budgets which will identify the timber management practices that it believes
will maximize the productivity of the Timberland Investment. Except for Timberland Securities,
Timberland Investments will not be acquired from the Advisor or any of its Affiliates. Any
Timberland Securities acquired by the Partnership from the Advisor or any of its Affiliates will be
acquired at a price not in excess of the Advisor's or the Affiliate's historic cost.
Investment Holding Period. The Partnership intends to take up to two years to acquire
Timberland Investments (unless extended for up to one additional year in the discretion of the
Advisor and for a second additional year if the limited partners of the Partnership holding at
least 66.67 percent of the Pro Rata Percentages (as defined in the Partnership's Limited
Partnership Agreement) approve), to hold each of its Timberland Investments for approximately
twelve years unless the Partnership elects Registration, and to take up to two years to dispose
of Timberland Investments (unless extended) in preparation for a winding-up of the Partnership.
Borrowinq Policies. The Partnership expects to borrow funds for acquisitions of
Timberland Investments and working capital purposes. Timberland Investments may be
purchased with (or refinanced using) debt. Any debt shall be non-recourse to the Partnership
{B1129976;4}
(except for customary recourse provisions) and shall be secured only by the Timberland
Investments. The principal amount of any such debt shall not exceed 55% of the then current
market value of the Timberland Investment securing such debt and the aggregate principal
amount of all debt then outstanding shall not exceed 35% of the greater of the then current
market value of all Timberland Investments and the aggregate proceeds of the Offering.
Entities in which the Partnership has purchased Timberland Securities and has a controlling
interest will be subject to the same debt restrictions, provided the foregoing percentages shall
not apply to debt of such entities (or liens on Timberland owned by such entities) to the extent
that such debt is evidenced by notes payable to the Partnership or other equity holders. The
term "debt" as used in this paragraph shall not include a promissory note issued to a seller of
Timberland in an "installment sale"where the Timberland is held in a direct or indirect subsidiary
of the Partnership, the promissory note issued by such subsidiary is without recourse to the
purchased Timberland, the promissory note is entitled to the benefits of a letter of credit in an
initial amount at least equal to the principal amount of such promissory note, the obligation of
the subsidiary to reimburse the issuer of the letter of credit for drawings thereunder is fully
collateralized and such collateral is sufficient to fund the obligations of the subsidiary under the
promissory note.
{81129976;4}
EXHIBIT B
POWER OF ATTORNEY
Hancock Timberland XI LP whose address is 99 High Street, Boston, MA 02110 (the
"Partnership"), does hereby name, constitute and appoint Hancock Natural Resource Group,
Inc. whose address is 99 High Street, 26th Floor, Boston, MA 02110, as its true and lawful
Attorney-in-Fact to do the following in its name, place and stead, such acts by said Attorney-in-
Fact to have the same force, effect and validity as if done by the Partnership through its duly
authorized officers or representatives:
(1) Acquisitions. Execute and deliver on behalf of the Partnership a purchase and sale
agreement and other documents, instruments and certificates for the acquisition and transfer of
the property listed on Schedule A hereto ("Property"), including, without limitation, all deeds,
bills of sale, assignments of leases and other rights, affidavits and evidences of authority of the
Partnership to consummate the acquisition of the Property;
(2) Dispositions. Execute and deliver on behalf of the Partnership one or more
agreements, instruments and documents necessary or desirable to effect the disposition of the
Property or a portion of the Property, as indicated thereon;
(3) Operation of Property. Execute and deliver on behalf of the Partnership one or more
leases, easements, and other contracts, applications for operating permits and other
agreements relating to the operation and management of the Property including relating to the
improvement, development repair and maintenance of the Property and the opening and
operation of bank accounts; and
(4) Further Authority. Execute and deliver on behalf of the Partnership amendments to
any of the foregoing agreements and do all things reasonably necessary to comply with the
terms and provisions of any such agreement.
Except as expressly set forth above, this power of attorney shall not be construed to
authorize the Attorney-in-Fact to sell, transfer, hypothecate, pledge or otherwise encumber the
Partnership's interest in any property.
{B1129976;4)
IN WITNESS WHEREOF, executed this
Power-of-Attorney on the day of 20_
ATTEST: HANCOCK TIMBERLAND XI LP
By: John Hancock Timber Resource Corporation,
its General Partner
By:
Name:
Title:
STATE OF
COUNTY OF
On this day of 200_, before me, the undersigned officer,
personally appeared who acknowledged him/herself to be the
of John Hancock Timber Resource Corporation and that
s/he, being authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself/herself as
My Commission expires
Notary Public
(B1129976;4)
EXHIBIT C
POLICY FOR
CONFIRMATION OF HANCOCK FOREST MANAGEMENT, INC. PROPERTY
MANAGEMENT FEES
Purpose
To independently and credibly confirm to the Advisor's Hancock Timber Resource Group
("HTRG") investors that the property management fees charged to investors, on a property by
property basis, by HTRG's timberland property management subsidiary, Hancock Forest
Management, Inc. ("HFM"), are "at or below fees charged by third-party timberland property
managers for comparable services on comparable properties" (herein "Fee Standard"). HTRG
is a division of the Advisor.
Procedure
HTRG will, at its own expense, hire one or more third parties (herein "Consultants") to annually
review HFM property management fees applicable to each HTRG investor property (herein
"HFM Fees"). The Consultants will be requested to provide a specific confirmation as to
whether or not, in the Consultant's sole opinion, HFM Fees comply with the Fee Standard on a
property-by-property basis. It is anticipated that the Consultant will base its confirmation on an
analysis of the timberland property management market that includes review of, at a minimum,
the following sources of information:
a) HTRG supplied information and analysis
b) Market survey data
c) Other sources of market information (i.e. Plan Sponsor, RFP results)
d) Specific consultant knowledge
Qualified Consultants
The following firms or individuals are pre-approved for consideration as potential Consultants,
based on their respective professionalism, industry knowledge, reputation, credibility and lack of
conflicts of interest:
• PricewaterhouseCoopers
• KPMG
• James W. Sewall Company
• Sizemore and Sizemore
• Jaakko P6yry .
HTRG will disclose to its investors any material contractual or other relationships that may exist
between the Consultants and HTRG at the time of any specific Confirmation, as defined below.
HTRG may revise this list from time to time. Upon request, HTRG will disclose to investors
when Consultants are added or deleted from this list, together with a summary describing the
basis for such revisions. It is initially anticipated that the specific Consultants for a particular
Confirmation will be selected on the basis of a Request for Proposals ("RFP") submitted to all
{B1129976;4)
Consultants in order to gain a full understanding of capabilities, cost structure and other
potential sources of information.
Timing
The specific Consultants analysis (herein "Confirmation") for the first year of Confirmation is
expected to be completed no later than 90 days following the date HFM is engaged to provide
services, directly or indirectly, to Hancock Timberland XI LP in order to confirm the HFM Fees.
Thereafter, Confirmations will be completed no later than December 31st of every year, with the
objective of confirming the HFM Fees to be applied during the subsequent calendar year.
Upon request, a copy of the Confirmation, edited to remove confidential and proprietary
information, will be provided to investors.
Confirmation Review Process
The Confirmation shall indicate whether, in the sole opinion of the Consultant, the HFM Fees
comply with the Fee Standard.
A. In the event the Confirmation indicates that the HFM Fees are in compliance with
the Fee Standard, then the HFM Fees shall remain in effect for the respective
year.
B. In the event the Confirmation indicates that the HFM Fees are not in compliance
with the Fee Standard, the Consultant shall indicate the rationale for its decision
and indicate the adjustments to the HFM Fees it believes are necessary in order
to comply with the Fee Standard.
If Section B above is applicable, then, within 15 days of the receipt of the respective
Confirmation, HTRG shall elect one of the following options:
1) Accept the Consultant's recommendation and thereafter appropriately
adjust the HFM Fees for the period covered by the specific Confirmation.
or
2) Submit the respective timberland property management to an RFP
process (at HTRG expense with the Consultant's participation in the RFP
oversight) directed to third party property managers. The results of the
RFP (herein "RFP Results") shall be provided to the Consultant for use in
re-evaluating its initial Confirmation.
a) If, based upon an analysis of the RFP Results, the Consultant concludes
that the HFM Fees are in compliance with the Fee Standard, the HFM
Fees shall remain in effect during the respective year.
b) If, based upon an analysis of the RFP Results, the Consultant concludes
that the HFM Fees still do not comply with the Fee Standard, HTRG will
assess the relative merits of the various proposals of the third party
property managers based on a set of key criteria including, but not limited
to, the following: specific client objectives, perceived level and quality of
service to be provided, relevant property management experience and
estimated transition costs. Based on this assessment, HTRG shall
thereafter either: 1) elect to transfer the property management for the
applicable property from HFM to one or more of the third party property
{B1129976;4)
managers, or 2) adjust the HFM Fees for the period covered by, and
pursuant to, the Confirmation, as it may be revised due to the analysis of
the RFP Results.
In the event of any disparity between this Policy and the Advisory Agreement with the
Partnership, the provisions of the Advisory Agreement shall control. HTRG may amend this
Policy from time to time upon written notice to investors.
{B1129976;4}
EXHIBIT D
FEE SCHEDULE
The Advisor shall be paid the following fees, calculated at the rates set forth below and as
described in the following paragraphs.
Fee Rate Schedule
Annual Management Fee 95 basis points .95% on Account Value
Performance Incentive Fee 20% of returns over 7% IRR
Annual Management Fee(AMF)
The Partnership shall pay the Advisor in USD an annual management fee ("AMF") in
quarterly installments in arrears. Each quarterly installment will be one fourth of the AMF
calculated using the Applicable Fee Rates above on the Account Value as of the end of
each quarter. In calculating the AMF for any quarter, the Account Value of Timberland
Investments shall be the lesser of(a) or(b)where:
"(a)" is the aggregate Invested Capital (defined below) of all Timberland Investments of
the Partnership calculated by averaging the Invested Capital at the end of the
preceding quarter and the Invested Capital at the end of the current quarter.
Invested Capital of Timberland Investments acquired during the current quarter shall
be prorated daily for the period from the date of acquisition to the end of the current
quarter. Invested Capital of Timberland Investments disposed of during the current
quarter(excluding timber sales) shall be prorated daily for the period from the date of
disposition to the beginning of the current quarter; and
"(b)" is the aggregate Market Value of all Timberland Investments of the Partnership
calculated by averaging the Market Values of such Timberland Investments, as
determined for the first and last days of the quarter. The Market Value of Timberland
Investments acquired during the current quarter shall be prorated daily for the period
from the date of acquisition to the end of the current quarter. The Market Value of
Timberland Investments disposed of during the current quarter (excluding timber
sales) shall be prorated daily for the period from the date of disposition to the
beginning of the current quarter.
Performance Incentive Fee (PIF)
The Partnership shall pay the Advisor a Performance Incentive Fee ("PIF") in USD equal to:
twenty percent (20%) of the aggregate amounts distributed, including the Hypothetical
Liquidation Value deemed distributed in connection with any Hypothetical Liquidation, to
Partnership in excess of the amount necessary to obtain a Real Annual Internal Rate of
Return (defined below) of seven percent 7.0%.
{B1129976;4}
The PIF shall be determined and paid in full on the date of disposition of the last Timberland
Investment or if sooner, upon the Registration, the winding up of the Partnership or termination
of this Agreement. If the PIF is due prior to the disposition of the last Timberland Investment, it
will be determined as if all Timberland Investments not previously disposed of had undergone a
Hypothetical Liquidation on such date, and the Hypothetical Liquidation Value were then
distributed to Partnership.
For purposes of the calculation of the PIF, (a) payment of the PIF shall not be included as a
reduction in the internal rate of return for Timberland Investments, but payments of the AMF
shall be applied as a reduction in the internal rate of return and (b) payment of withholding taxes
by the Partnership, any of its Subsidiaries or any owner of Timberland where the Timberland
Investment is in Timberland Securities, shall not be included as a reduction in the internal rate of
return for Timberland Investments
Payments of fees will not be rebated, other than due to error in computations.
The AMF is separate, distinct and unaffected by the PIF.
Payment of the Annual Management Fee and the Performance Incentive Fee shall be in USD
and all determinations of Invested Capital, Fair Market Value, Hypothetical Liquidation Value
and Real Cash Flows shall be in USD using the exchange ratio in effect at the time of
determination.
In the event of a Registration, the PIF shall be paid by the Partnership from the proceeds of the
initial public offering.
Definitions
"CPI-U Index" means the monthly Consumer Price Index for all Urban Consumers ("CPI-
U") published by the United States Bureau of Labor Statistics, as most recently published. If
such Index is no longer published, then CPI-U Index shall mean the index selected by the
Advisor and agreed to by the Partnership, which agreement shall not be unreasonably withheld,
which provides a similar measurement of inflation in the United States.
"Hypothetical Liquidation" means as of any date, a hypothetical liquidation in which all
Timberland Investments acquired under this Agreement and not previously disposed of were
sold for their then Market Values, reduced (other than in connection with a Hypothetical
Liquidation upon termination of this Agreement) by estimated disposition charges.
"Hypothetical Liquidation Value" means the amount that would be available for
distribution to the Partnership following a Hypothetical Liquidation after all debts and obligations
related to the Timberland Investments were paid in full (but without reduction for the PIF),
provided in the event of a Registration, Timberland Investments will not be valued at their then
Market Value, but will be deemed to have the aggregate value of the Partnership's units of
limited partnership interest outstanding immediately prior to the initial public offering of units of
limited partnership interest of the Partnership (subject to adjustment as may be appropriate in
light of any reorganization, recapitalization or reclassification of the units of limited partnership
interest of the Partnership or other restructuring of the Partnership), based upon the average of
{B1129976;4)
the prices at the close of trading on five consecutive trading days, the first of which shall be the
day upon which units of limited partnership of the Partnership are first offered to the public.
"Invested Capital" means with respect to each Timberland Investment of the
Partnership, the purchase price of such Timberland Investment (including any acquisition
indebtedness and any transaction costs) and increased by any expenditures made with respect
to such Timberland Investment which, under generally accepted accounting principles, are to be
capitalized and not expensed, in each case as adjusted for inflation by the CPI-U Index based
on the date such amount was paid, less the then current cost basis allocable to any portion of a
Timberland Investment previously sold. With respect to a Timberland Investment which is a
Timberland Security, Invested Capital of such Timberland Security shall be an amount
determined by multiplying the aggregate "Invested Capital" (determined in accordance with the
preceding sentence) of all Timberland owned (directly or indirectly) by the issuer of the
Timberland Security by the percentage ownership of the issuer represented by that Timberland
Security.
"Market Value" means with respect to each Timberland Investment of the Partnership,
the fair market value as determined in the most recent appraisal (or update)for such Timberland
obtained by the Advisor, or if no such appraisal is available, the fair market value shall be
deemed the book value of such Timberland Investment (i.e. its purchase price, including
acquisition indebtedness and transaction costs) as adjusted in accordance with generally
accepted accounting principles. With respect to a Timberland Investment represented by a
Timberland Security, the Market Value of such Timberland Security shall be the "Market Value"
(determined in accordance with the preceding sentence) of all Timberland owned (directly or
indirectly) by the issuer of the Timberland Security multiplied by the percentage ownership of
the issuer represented by that Timberland Security.
"Real Annual Internal Rate of Return" means the annual discount rate that causes the
net present value of the Real Cash Flows to be zero.
"Real Cash Flows" means: (a)the capital contributions made by or for the benefit of the
Partnership (including, without limitation, the Partnership's initial capital contribution); and (b)
the distributions made (or deemed to be made in the case of withholding taxes) to the
Partnership pursuant to this Agreement, in each case based on the actual date such
contribution or distribution was made (or deemed made in the case of withholding taxes) divided
by the Re-based CPI-U Index for the month during which such contributions or distributions
occurred (or were deemed to occur in the case of withholding taxes). For the purposes of this
definition, any withholding taxes required to be withheld in respect of any partner of the
Partnership (whether withheld by the Partnership, any issuer of a Timberland Security or owner
of the underlying Timberland including any Subsidiary or Affiliate of the Partnership) shall be
deemed a cash distribution to the Partnership as of the date of such withholding.
"Re-based CPI-U Index" for a particular month means the CPI-U Index for that month
divided by the CPI-U Index for the current month.
(B1129976;4)
EXHIBIT E
INVESTMENT ALLOCATION POLICY
This Investment Allocation Policy describes the policy and procedures that the Advisor follows in
allocating timberland acquisition opportunities ("Investment Opportunities") among the various
accounts and portfolios managed by the Advisor("Portfolios").
Policy
When Investment Opportunities occur which are consistent with the objectives and guidelines of
more than one Portfolio, it is the policy of the Advisor not to favor any one Portfolio over
another, and to allocate such Investment Opportunities to the particular Portfolios involved in an
equitable manner, based upon a variety of factors, including the respective investment
objectives, then-current investment and cash positions, and other factors relevant to a particular
Investment Opportunity or Portfolio.
General Procedures
Each Investment Opportunity is unique and presents its own characteristics, requirements and
risk factors. Similarly, the investment policies and guidelines for each Portfolio ("Guidelines")
may vary from Portfolio to Portfolio. The suitability of any Investment Opportunity for a
particular Portfolio is the central consideration in the Advisor's investment allocation procedures.
This assessment includes such factors as diversification by geography (including timber
markets and timber species), total projected rate of return including cash flow and appreciation
components, liquidity, the use of internal or external debt, and, where relevant, possible taxes
and before and/or after-tax cash flow and/or income.
Based upon the relevant criteria, the Advisor sets forth a preferred amount to be allocated to
each Portfolio for which the Investment Opportunity is suitable. Allocation of Investment
Opportunities shall be made without preference for or against any Portfolio, but rather is based
upon the suitability analysis described above.
In the event the aggregate preferred amounts of all suitable Portfolios exceed the amount
necessary to fund the Investment Opportunity (i.e. an Investment Opportunity is
oversubscribed), all suitable Portfolios willing to participate in the Investment Opportunity shall
be allocated a portion of the Investment on a pro rata basis based upon the preferred amount
for each Portfolio. The pro-ration will adjust for considerations such as investment size
objectives, avoidance of impractically small residual allocations, and the particular
characteristics of the Investment Opportunity, including any specific transaction criteria
determined by the seller or the marketplace. In the event that the Investment Opportunity is
oversubscribed and cannot be allocated pro rata (due to such factors as minimum size
constraints, parcelization considerations, transaction criteria and the like), the Advisor will use
its best judgment to approximate the intended allocation by accommodating Portfolios on a first-
in, first-out basis according to the date, indicated by a signed contract or similar instrument, of
their respective capital allocation.
The Advisor will communicate information regarding Investment Opportunities to clients based
on suitability and known interest in accordance with the applicable provisions of the relevant
agreements. It is the responsibility of the Advisor's Director of Client Account Management (or
{B1129976;4}
a successor in the organization as might be determined from time to time) to oversee this policy
and attendant procedures, as amended from time to time.
{B1129976;4)
SUBSCRIPTION BOOKLET
UNITS OF LIMITED PARTNERSHIP INTERESTS OF HANCOCK TIMBERLAND XI LP
Name of Subscriber: City of Clearwater, Florida
Date of Subscription: February 15, 2011
0
Amount of Subscription for Units : Aggregate US$ 8,000,00
Principal Place of Business 112 South Osceola Avenue
Clearwater, FL 33756
Jurisdiction of Formation or
Incorporation: State of Florida
102836971(B1236635;2)
SUBSCRIPTION BOOKLET
UNITS OF LIMITED PARTNERSHIP INTERESTS OF HANCOCK TIMBERLAND XI LP
This booklet contains instructions for completing and mailing documents. Instructions for
sending funds appear in the Subscription Agreement. The following documents must be
executed and delivered by you to invest in units of limited partnership interests of Hancock
Timberland XI LP (the "Units").
Investor Documents
Subscription Agreement, including two signature pages.
2. Two copies of a signature page to the Amended and Restated Limited Partnership
Agreement.
3. Form W-8 or Form W-9.
There may also be additional or different documents required under the securities laws
of your jurisdiction or state, and/or if you are a person or entity resident or organized outside of
the United States.
Questions regarding these investment documents should be directed to: Tim Cayen,
John Hancock Distributors LLC, c/o Hancock Natural Resource Group, Inc., 99 High Street,
26th Floor, Boston, Massachusetts 02110-2320, (617) 747-1600.
-2-
{B1236635;2)
UNITS OF LIMITED PARTNERSHIP INTERESTS OF HANCOCK TIMBERLAND XI LP
INSTRUCTIONS FOR COMPLETING AND DELIVERING DOCUMENTS
The attached legal documents will be used to issue the Units of Hancock Timberland XI
LP (the "Partnership"). It is essential that the documents be completed accurately and fully. If
executing them, please pay particular attention to the following points:
The address of your principal place of business must be used on the documents. If a
different address is to be used for correspondence and/or copies of correspondence are to be
forwarded to a professional adviser, please provide instructions on an attached sheet.
A. SUBSCRIPTION AGREEMENT, including two signature pages
On both copies of the signature page insert the date, provide other
information requested and sign.
2. Both copies should be signed in the same manner (i.e., if one is signed
"XYZ, Inc.", they all should be so signed). Please type or print name of
the Investor on the line above the officer's or principal's signature line and
the name and office (or other capacity) of the signer on the lines below
the officer's or principal's signature line.
3. The Subscription Agreement should be read in its entirety. It contains
various statements and representations by you upon which the
Partnership and its affiliates will rely.
B. SIGNATURE PAGE TO AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT
Both copies should be dated.
2. Both copies should be signed in the same manner and by the same
officer or principal as the Subscription Agreement.
3. Type or print your name where indicated.
C. FORM W-8 or W-9
Form W-8 (for non-U.S. Investors) or Form W-9 (for US investors) must
be completed and signed in the same manner and by the same officer or
principal as the Subscription Agreement.
-3-
{81236635;2}
D. DELIVERY INSTRUCTIONS
All originally executed copies of the documents listed above which apply to you
shall be sent so they arrive at the below address ON OR BEFORE, 5:00 P.M.,
BOSTON TIME, June 30, 2011 (unless extended to a date on or before
December 22, 2011), to:
John Hancock Distributors LLC
c/o Hancock Natural Resource Group, Inc.
99 High Street, 26th Floor
Boston, Massachusetts 02110-2320
Attn: Tim Cayen
Telephone No. 617 747 1600
(81236635;2)
SUBSCRIPTION AGREEMENT
Hancock Timberland XI LP
John Hancock Distributors LLC
c/o Hancock Natural Resource Group, Inc.
99 High Street, 26th Floor
Boston, Massachusetts 02110-2320
Attention: Tim Cayen
Dear Ladies and Gentlemen:
Reference is made to the offering of units of limited partnership interests of Hancock
Timberland XI LP (the "Partnership") pursuant to the terms of the Confidential Private
Placement Memorandum, dated December 9, 2010, as amended (the "Memorandum").
Capitalized terms shall have the respective meanings ascribed to them in the Memorandum,
unless otherwise specifically defined herein.
The undersigned (the "Investor") agrees as follows:
Subscription for Units.
(1) The Investor agrees, subject to acceptance and approval by John
Hancock Timber Resource Corporation (the "General Partner") and Hancock Natural Resource
Group, Inc. (the "Advisor"), to become a limited partner of the Partnership, to subscribe for and
acquire the number of units of limited partnership interests of the Partnership ("Units") which
may be purchased for the aggregate amount set forth below its signature on the signature page
attached to this Subscription Agreement (the "Agreement") in the amount of US$100,000 per
Unit subscribed for by the Investor at a closing to take place on or before June 30, 2011 (unless
extended to a date on or before December 22, 2011), and otherwise in accordance with the
terms and conditions described in the Memorandum (the "Closing") and thereafter on terms and
conditions in accordance with the Memorandum and herein. All payments of the price of each
Unit (the "Unit Price") shall be paid in immediately available U.S. funds. Subject to the terms
and conditions set forth herein, the Investor's obligation to subscribe for and pay for such Units
shall be complete and binding upon the execution and delivery of this Agreement.
The Closing: Payment by the Investor: Failure to Pay.
(1) The Investor will become a limited partner of the Partnership in respect of
the Units subscribed for by it at the Closing in accordance with the provisions of the
Memorandum, the Partnership Agreement and herein. The Closing will occur as described in
the Memorandum. The Investor will be notified at least 10 days prior to the date of the Closing
as to the portion of the Unit Price due with respect to the Units subscribed for and purchased by
the Investor. If no Timberland Investment has been identified prior to the Closing, the portion of
the Unit Price representing not more than 2 percent of the Investor's aggregate Unit Price for
the Units subscribed for and purchased by the Investor will be due at the Closing. If one or
more Timberland Investment(s) have been identified prior to the Closing, up to 100 percent of
the aggregate Unit Price due with respect to the Units subscribed for and purchased by the
{B1236635;2) - 5 -
Investor may be required to be made at the Closing. Subject to the foregoing, if less than 100
percent of the aggregate Unit Price due with respect to the Units subscribed for and purchased
by the Investor is paid at the Closing, the balance of such Unit Price shall be made as
Timberland Investments are identified by the Advisor upon notice given by the Advisor and the
General Partner at any time during the Acquisition Period.
(2) The first payment of the Unit Price for the Units shall be paid by wire
transfer of funds on or prior to the date when due in immediately available U.S. funds, in
accordance with the wire instructions provided by the Advisor to the Investor prior to the
Closing.
(3) If an Investor fails in any instance to pay the full amount of any installment
of its subscription when due and such failure continues for two business days after notice of
such failure is given, or the Investor fails in two or more instances to pay the full amount of any
installment of its subscription when due, the Partnership may, in its sole discretion and in
addition to exercising any other rights or remedies afforded by law or at equity, take any one or
more of the following actions, to which the Investor hereby consents:
(a) Commence legal or other proceedings against the Investor to
collect the due and unpaid amount plus interest thereon at a per
annum rate equal to the lesser of (i) 4% plus the "Prime Rate" as
reported in The Wall Street Journal, or (ii) the highest rate
permitted by law) and the expenses of collection, including
reasonable attorneys' fees, or to deduct such amount from future
distributions to the Investor;
(b) Upon notice, prohibit the Investor from paying additional
installments of its subscription; and
(c) Upon notice, require the Investor to sell (and the Investor hereby
agrees to sell) its Units to a person designated by the Partnership
who agrees to pay the unpaid amount of any defaulted Unit Price
of the Investor's subscription and to assume the Investor's other
obligations to the Partnership, at a purchase price equal to 75% of
the aggregate Unit Price then paid.
The Partnership may, in its sole discretion, cease taking any action commenced
under this paragraph 3 or restore any right of the Investor reduced or terminated pursuant to this
paragraph 3 prior to a sale of the Investor's Units pursuant to clause (c) above.
III. Representations and Warranties of the Investor.
The Investor hereby represents and warrants to the Partnership and the General Partner
as follows, and the Investor acknowledges that the Partnership and the General Partner intend
to rely on such representations and warranties.
(1) SUITABILITY. THE INVESTOR HAS CAREFULLY READ AND
UNDERSTANDS THIS AGREEMENT, THE PARTNERSHIP AGREEMENT, THE
[B1236635;2) - 6 -
MEMORANDUM AND THE EXHIBITS THERETO, HAS CONSULTED PROFESSIONAL
ADVISORS REGARDING THE OFFERING AS IT HAS DEEMED NECESSARY, HAS
EVALUATED THE RISKS OF INVESTING IN THE UNITS, AND HAS DETERMINED THAT
SUCH UNITS ARE A SUITABLE INVESTMENT FOR IT.
(2) ACCREDITED INVESTOR STATUS. Please indicate which one or
more of the following is applicable to the Investor.
(a) The Investor is an organization described in Section 501(c)(3) of
the Internal Revenue Code, a corporation, Massachusetts or
similar business trust, or partnership, not formed for the specific
purpose of acquiring the Units offered, with total assets in excess
of US$5,000,000. ?
(b) The Investor is a trust, with total assets in excess of
US$5,000,000, not formed for the specific purpose of acquiring
the Units offered, whose purchase is directed by a sophisticated
person as described in Rule 505(b)(2)(ii) of the Securities Act of
1933, as amended (the "Act"). ?
(c) The Investor is a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of US$5,000,000, or it is an
employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA") and
the decision to invest in the Units has been made by a plan
fiduciary, as defined in Section 3(21) of ERISA, which is either a
bank, savings and loan association, insurance company, or
registered investment advisor, or has total assets of
US$5,000,000 or, is a self-directed plan, with investment
decisions made solely by persons that are accredited investors. X
(d) The Investor is an entity in which all of the equity owners are
accredited investors. ?
(e) The Investor is a natural person whose individual net worth (or
joint net worth with the Investor's spouse) exceeds US$1,000,000.
As used herein, "net worth" means total assets (excluding
principal residence) at fair market value less total liabilities
(excluding principal residence mortgage). ?
(f) The Investor a natural person who had an individual income in
excess of US$200,000 in each of the two most recent years or
joint annual income with the Investor's spouse in excess of
US$300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year.
O
(B1236635; 2} - 7 -
(g) The Investor does not qualify in any of the above accredited
investor categories. ?
(3) QUALIFIED PURCHASER STATUS. Please indicate which one or
more of the following is applicable to the Investor.
To the extent that the Partnership claims exemption from registration under the
Investment Company Act of 1940 in reliance on Section 3(c)(7) thereof, Units may only be
acquired by investors who are "qualified purchasers" (as defined in Section 2(a)(51) of the
Investment Company Act of 1940). Please indicate the basis of "qualified purchaser" status of
the Investor by checking the applicable statement or statements. In connection therewith, the
Investor must read below for the definition of "investments" and for information regarding the
valuation of "investments," respectively.
(a) A company, partnership or trust that owns not less than
US$5,000,000 in "investments" and that is owned directly or indirectly by or for two or more
natural persons who are related as siblings or spouse (including former spouses), or direct lineal
descendants by birth or adoption, spouses of such persons, the estates of such persons, or
foundations, charitable organizations or trusts established by or for the benefit of such persons
(a "Family Company"). ?
(b) A trust that is not covered by (a) above as to which the trustee or
other person authorized to make decisions with respect to the trust, and each settlor or other
person who has contributed assets to the trust, is a person described in clause (a), (c), (d) or (f)
hereof. ?
(c) A person, acting for its own account or the accounts of other
qualified purchasers, who in the aggregate owns and invests on a discretionary basis not less
than US$25,000,000 in "investments." ?
(d) A qualified institutional buyer as defined in paragraph (a) of Rule
144A under the Securities Act, acting for its own account, the account of another qualified
institutional buyer, or the account of a qualified purchaser, provided that (i) a dealer described in
paragraph (a)(1)(ii) of Rule 144A shall own and invest on a discretionary basis at least
US$25,000,000 in securities of issuers that are not affiliated persons of the dealer and (ii) a plan
referred to in paragraph (a)(1)(D) or (a)(1)(E) of Rule 144A, or a trust fund referred to in
paragraph (a)(1)(F) of Rule 144A that holds the assets of such a plan, will not be deemed to be
acting for its own account if investment decisions with respect to the plan are made by the
beneficiaries of the plan, except with respect to investment decisions made solely by the
fiduciary, trustee or sponsor of such plan. X
(e) A company, partnership or trust, each beneficial owner of the
securities of which is a qualified purchaser. PLEASE NOTE: This certification does not apply to
beneficiaries of an irrevocable trust. ?
(f) A natural person (including any person who holds a joint,
community property or other similar shared ownership interest in the partnership with that
{B1236635; 2) - 8 -
person's qualified purchaser spouse) who owns not less than US$5,000,000 in "investments."
The Investor does not qualify in any of the above qualified purchaser
categories. ?
DEFINITION OF "INVESTMENTS."
The term "investments" means:
(1) Securities, other than securities of an issuer that controls, is controlled by,
or is under common control with, the investor that owns such securities, unless the issuer of
such securities is:
(i) an investment company or a company that would be an investment
company but for the exclusions provided by Sections 3(c)(1) through 3(c)(9) of the Investment
Company Act of 1940 or the exemptions provided by Rule 3a-6 or 3a-7 promulgated under the
Investment Company Act of 1940, or a commodity pool; or
(ii) a Public Company (as defined below); or
(iii) a company with shareholders' equity of not less than US$50,000,000
(determined in accordance with generally accepted accounting principles) as reflected on the
company's most recent (and in any event not more than sixteen months old) financial
statements;
(2) Real estate held for investment purposes;
(3) Commodity Interests (as defined below) held for investment purposes;
(4) Physical Commodities (as defined below) held for investment purposes;
(5) To the extent not securities, Financial Contracts (as defined below)
entered into for investment purposes;
(6) In the case of an investor that is a company that would be an investment
company but for the exclusions provided by Section 3(c)(1) or 3(c)(7) of the Investment
Company Act of 1940, or a commodity pool, any amounts payable to such investor pursuant to
a firm agreement or similar binding commitment pursuant to which a person has agreed to
acquire an interest in, or make capital contributions to, the investor upon the demand of the
investor; and
(7) Cash and cash equivalents held for investment purposes.
Real estate that is used by the investor or a Related Person (as defined below) of
the investor for personal purposes, or as a place of business, or in connection with the conduct
of the trade or business of such investor or a Related Person of the investor, will NOT be
considered real estate held for investment purposes, provided that real estate owned by an
(B1236635;2) - 9 -
investor who is engaged primarily in the business of investing, trading or developing real estate
in connection with such business may be deemed to be held for investment purposes.
However, residential real estate will not be deemed to be used for personal purposes if
deductions with respect to such real estate are not disallowed by section 280A of the Code.
A Commodity Interest or Physical Commodity owned, or a Financial Contract
entered into, by the investor who is engaged primarily in the business of investing, reinvesting,
or trading in Commodity Interests, Physical Commodities or Financial Contracts in connection
with such business may be deemed to be held for investment purposes.
For purposes of determining the amount of investments owned by an investor
that is a company, there may be included investments owned by majority-owned subsidiaries of
the investor and investments owned by a company ("Parent Company") of which the investor is
a majority-owned subsidiary, or by a majority-owned subsidiary of the investor and other
majority-owned subsidiaries of the Parent Company.
In determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person's investments any investment held jointly with such
person's spouse, or investments in which such person shares with such person's spouse a
community property or similar shared ownership interest. In determining whether spouses who
are making a joint investment in the Partnership are qualified purchasers, there may be included
in the amount of each spouse's investments any investments owned by the other spouse
(whether or not such investments are held jointly). There shall be deducted from the amount of
any such investments any amounts specified by paragraph 2(a) under VALUATIONS OF
INVESTMENTS below incurred by such spouse.
In determining whether a natural person is a qualified purchaser, there may be
included in the amount of such person's investments any investments held in an individual
retirement account or similar account the investments of which are directed by and held for the
benefit of such person.
As used herein, the following terms shall have the meaning set forth below:
"Commodity Interests" means commodity futures contracts, options on
commodity futures contracts, and options on physical commodities traded on or subject to the
rules of:
(i) any contract market designated for trading such transactions under the
Commodity Exchange Act and the rules thereunder; or
(ii) any board of trade or exchange outside the United States, as
contemplated in Part 30 of the rules under the Commodity Exchange Act.
"Family Company" means a company, partnership or trust that owns not less
than US$5,000,000 in "investments" and that is owned directly or indirectly by or for two or more
natural persons who are related as siblings or spouse (including former spouses), or direct lineal
descendants by birth or adoption, spouses of such persons, the estates of such persons, or
foundations, charitable organizations or trusts established for the benefit of such persons.
- 0 -
{B1236635;2)
"Financial Contract" means any arrangement that:
(i) takes the form of an individually negotiated contract, agreement, or option
to buy, sell, lend, swap, or repurchase, or other similar individually negotiated transaction
commonly entered into by participants in the financial markets;
(ii) is in respect of securities, commodities, currencies, interest or other rates,
other measures of value, or any other financial or economic interest similar in purpose or
function to any of the foregoing; and
(iii) is entered into in response to a request from a counter party for a
quotation, or is otherwise entered into and structured to accommodate the objectives of the
counterparty to such arrangement.
"Physical Commodities" means any, physical commodity with respect to which a
Commodity Interest is traded on a market specified in the definition of Commodity Interests
above.
"Public Company" means a company that:
(i) files reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended from time to time; or
(ii) has a class of securities that are listed on a Designated Offshore
Securities Market, as defined by Regulation S of the Securities Act.
"Related Person" means a person who is related to the investor as a sibling,
spouse or former spouse, or is a direct lineal descendant or ancestor by birth or adoption of the
investor, or is a spouse of such descendant or ancestor, provided that, in the case of a Family
Company, a Related Person includes any owner of the Family Company and any person who is
a Related Person of such an owner.
VALUATIONS OF INVESTMENTS.
The general rule for determining the value of investments in order to ascertain
whether an investor is a qualified purchaser is that the value of the aggregate amount of
investments owned and invested on a discretionary basis by the investor shall be their fair
market value on the most recent practicable date or their cost. This general rule is subject to
the following provisos:
(1) In the case of Commodity Interests, the amount of investments shall be
the value of the initial margin or option premium deposited in connection with such Commodity
Interests; and
(2) In each case, there shall be deducted from the amount of investments
owned by the investor the following amounts:
{B1236635:2) - 11 -
(a) The amount of any outstanding indebtedness incurred to acquire the
investments owned by the investor.
(b) A Family Company, in addition to the amounts specified in clause 2(a)
above shall have deducted from the value of such Family Company's investments any
outstanding indebtedness incurred by an owner of the Family Company to acquire such
investments.
(4) SUPPLEMENTAL INFORMATION.
Units?
(a) Was the Investor organized for the specific purpose of acquiring the
Yes ? No X
PLEASE NOTE: If the answer to question 4(a) is "Yes", each Person who is an
equity owner of the Investor must complete a copy of this Part III of the Subscription Agreement
as if such person were directly acquiring the Units.
(b) With respect to its acquisition of the Units, is the Investor a participant-
directed defined contribution plan (such as a 401(k) plan), or a partnership or other investment
vehicle (x) in which its partners or participants have or will have any discretion as to their level of
investment in the Investor or in investments made by the Investor (including the Investor's
investment in the Units), or (y) that is otherwise an entity managed to facilitate the individual
decisions of its beneficial owners to invest in the Partnership?
Yes ? No X
(c) Assuming that the Investor will own less than 10% of the voting securities
of the Partnership, does the Investor count as one beneficial owner under Section 3(c)(1) of the
Investment Company Act of 1940?
Yes X No ?
If the answer to question 4(c) is "No," under Section 3(c)(1) of the Investment
Company Act of 1940, assuming that the Investor will own less than 10% of the voting securities
of the Partnership, how many beneficial owners does the Investor count as?
(d) Is the Investor a private investment company or a non-U.S. investment
company exempt from registration under the Investment Company Act of 1940, in reliance on
Section 3(c)(1), 3(c)(7) or 7(d) thereof?
Yes ? No X
30,1996?
If the answer to question 4(d) is "Yes," was the Investor formed on or before April
(61236635; 2) - 12 -
Yes ? No ?
If the answer to the previous question is "Yes," has the Investor obtained the
consent of its direct and indirect beneficial owners to be treated as a "qualified purchaser' as
provided in Section 2(a)(51)(c) of the Investment Company Act of 1940 and the rules and
regulations thereunder?
Yes ? No ?
(5) ERISA INFORMATION. Please indicate which one or more of the
following is applicable to the Investor.
(a) The Investor is a pension, profit-sharing, annuity or employee benefit plan
(a "Plan") described in ERISA, whether or not subject to ERISA, or a "plan" as defined in
Section 4975(e)(i) of the Code, or the Investor is an entity whose underlying assets include Plan
assets by reason of investments by "benefit plan investors" as defined under Section 3(42) of
ERISA. X
If the answer to question 5(a) is "Yes," is the Investor subject to ERISA?
Yes ? No X
If the Investor is an entity whose underlying assets include plan assets by reason
of investments by benefit plan investors under Section 3(42) of ERISA, indicate the percentage
of the entity held by benefit plan investors:
(b) If the Investor is acquiring the Units as a trustee or custodian for an
Individual Retirement Account, the Investor is a qualified IRA custodian or trustee. ?
(c) The Investor is acquiring the Units with funds that constitute, directly or
indirectly, assets of any employee benefit plan subject to ERISA or to Section 4975 of the Code.
13
(d) The Investor is subject to ERISA. ?
(6) OPPORTUNITY TO VERIFY INFORMATION. The Partnership, the
General Partner and the Advisor have answered all inquiries posed by the Investor concerning
the Partnership and/or investment in the Units, have provided all information regarding the
Partnership and the Units that the Investor has requested, and have provided the Investor an
opportunity to pose such questions and request such information.
(7) DUE ORGANIZATION. It has been duly formed and is validly existing
under the laws of the state or other jurisdiction of its organization with full authority to invest in
the Partnership; its chief executive office and principal place of business are as set forth on the
signature page to this Agreement; its purchase of the Units in accordance with the terms of this
Agreement, the Partnership Agreement and the Memorandum has been authorized by all
necessary corporate or other action; no proceedings exist for its merger, reorganization or
dissolution; its purchase of the Units, and its actions thereto related, will not violate its
(B1236635;2) -13-
organizational documents, or any agreement, instrument or restriction or any statute, regulation,
court or agency order to which it is a party or by which it or its assets are bound; and each of
this Agreement and the related agreements required to be signed in connection herewith have
been validly authorized and executed by it and each constitutes its binding and valid obligation,
enforceable against it in accordance with its terms.
(8) INVESTMENT INTENT. It is acquiring the Units on its own behalf, for
investment and not with a view to resale or redistribution in whole or in part.
(9) LIMITED TRANSFERABILITY. It understands that it must bear the
economic risk of this investment for an indefinite period of time; that the Units are being offered
only to qualified investors pursuant to an exemption from the registration requirements of the
Act and that even if resale of the Units is otherwise permitted by the Partnership Agreement, no
resale of the Units may be made unless the Units are subsequently registered under the Act or
an opinion of counsel states that an exemption from such registration is available.
(10) NO RELIANCE. It has not relied in connection with the investment in the
Units upon any representations, warranties, agreements or statements other than those set
forth in this Agreement, the Partnership Agreement or the Memorandum, including but not
limited to any statement, recommendation or advice of the Advisor, the Partnership, the General
Partner, John Hancock Distributors LLC, or any of their respective affiliates or any
representative of the same.
(11) KNOWLEDGE AND EXPERIENCE. Please indicate yes or no.
(a) It is experienced in making and has made investments of a type
similar to that of the Units in the past.
X_ yes no
(b) It has purchased, on one or more occasions in the past, privately
placed restricted securities.
X yes no
(12) NO NEED FOR LIQUIDITY. It has no need for liquidity in connection with
its purchase of the Units.
(13) NO BORROWINGS. It has not borrowed any portion of its contribution to
the Partnership, either directly or indirectly, from the Partnership, the Advisor or any affiliate of
the foregoing.
(14) (a) PATRIOT ACT REPRESENTATIONS. The funds to be used to pay
the Unit Price by the Investor are not directly or indirectly derived from activities that may
contravene federal, state or international laws and regulations, including anti-money laundering
laws and regulations. The Investor is not, nor is any affiliate of the Investor, a Prohibited Person
(as defined below) and to the extent the Investor is acting as agent or nominee for any person in
connection with this Agreement, or otherwise has beneficial owners that are not disclosed to the
Partnership or the Advisor, (i) it has carried out due diligence to establish the identities of such
{B1236635; 2) -14-
beneficial owners and (ii) based on such due diligence, the Investor reasonably believes that no
such beneficial owners are Prohibited Persons.
The foregoing representations and warranties are understood to be relied upon by the
Partnership and the Advisor and shall survive indefinitely, and the Investor agrees to promptly
notify the Advisor in writing if any of the foregoing representations and warranties shall no
longer be true and correct.
"Prohibited Persons" means (i) persons, entities or organizations listed in Executive
Order No. 13224 (September 23, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism) and any
related legislation or similar Executive Orders (ii) persons, entities or organizations named on
the List of Specially Designated Nationals and Blocked Persons maintained by the Office of
Foreign Assets Control ("OFAC"), Department of Treasury, as such list may be amended from
time to time, or any similar list maintained or administered by OFAC, (iii) any senior foreign
political figure, and member of a senior foreign political figure's immediate family or any close
associate of a senior foreign political figure, unless the Advisor, after being specifically notified
by the Investor in writing that it is such a person, entity or organization, conducts further due
diligence, and determines that the relationship between such person and the Investor does not
affect the operations of the Partnership or the Advisor's ability to perform its duties as advisor to
the Partnership or (iv) any foreign bank which does not have physical presence in any country.
(b) PATRIOT ACT COVENANTS. The Investor shall, in connection with its
obligations under this Agreement, comply with all provisions applicable to it of the Trading with
the Enemy Act (50 U.S.C. App §1 et. seq.), the foreign asset control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V) and any enabling legislation or
Executive Order relating thereto and the anti-money laundering provisions of Title III of Public
Law 107-56 (October 26, 2001, the USA PATRIOT ACT).
(15) U.S. PERSON. check here if true: _; the Investor is a United States
person within the meaning of Section 7701 of the Internal Revenue Code of 1986, (the "Code")
(i.e., is not any of the following (as defined in the Code): a nonresident alien individual, foreign
partnership, foreign corporation, foreign estate, foreign trust, other foreign entity or organization,
or grantor trust having a foreign person as an owner).
(16) FOR RESIDENTS OF MASSACHUSETTS:
THE UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS AND MAY NOT BE SOLD OR
TRANSFERRED UNLESS THE UNITS ARE SUBSEQUENTLY REGISTERED UNDER SUCH
LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
IV. Conditions to the Closing.
The Investor's obligation to purchase and pay for the Units is subject to the fulfillment, to
the Investor's satisfaction, prior to or at the Closing, of the following conditions:
- 15 -
{B1236635;2)
(1) The Advisor, the General Partner and the Partnership shall have
performed and complied with all agreements and conditions required by this Agreement and the
Memorandum to be performed or complied with by it prior to or at the Closing.
(2) All proceedings, documents and instruments incident to the transactions
contemplated hereby shall be satisfactory to the Investor and the Investor shall have received
all such counterpart originals or certified or other copies of such documents as it may
reasonably request.
The obligation of the Partnership to sell and accept payment for the Units is subject to
the fulfillment, to the Partnership's, the General Partner's and the Advisor's satisfaction, prior to
or at the Closing, of the following condition:
The Partnership shall have received and accepted Subscription Agreements for
at least 1,000 Units on or before the Closing (which may include this Agreement).
V. General.
(1) This Agreement (i) shall be binding upon the Investor and its successors
and assigns, (ii) shall inure to the benefit of the Partnership and its successors and assigns and
(iii) and its validity and the validity of any of its terms or provisions, as well as the rights and
duties of the parties to this Agreement, shall be governed by the laws of the State of Florida
(without regard to any conflict of laws provisions) to the extent such laws have not been
preempted by applicable federal law. Any action at law or in equity to enforce or interpret the
provisions of this Agreement shall be brought in a federal or state court of competent jurisdiction
in Pinellas County, Florida. Each party agrees that any such court shall have in personam
jurisdiction over it and consents to service of process in any manner authorized by Florida law.
(2) Except as provided in Section II, and in the Delivery Instructions
accompanying this Agreement, all communications from the Partnership to the Investor or from
the Investor to the Partnership shall be in writing, and shall be deemed effective when delivered
in person or sent by a nationally recognized overnight courier, if to the Investor, addressed to
the Investor at its address then appearing on the records of the Partnership or if to the
Partnership, addressed to:
Hancock Timberland XI LP
c/o Hancock Natural Resource Group, Inc.
99 High Street, 26th Floor
Boston, Massachusetts 02110-2320
Attn: Tim Cayen
or such other address of which the Partnership or the Advisor notifies the Investor.
(3) If the Investor acquires any additional Units, all applicable representations
and warranties made herein shall be deemed to have been made by the Investor with respect to
such interests or obligations.
{61236635; 2) - 6 -
(4) If any provision of this Agreement is invalid or unenforceable under any
applicable law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such applicable law. Any provision
hereof which may be held invalid or unenforceable under any applicable law shall not affect the
validity or enforceability of any other provision hereof.
(5) All agreements, representations and warranties contained herein or made
in writing by or on behalf of either party hereto in connection herewith shall survive the
execution and delivery of this Agreement and the sale and purchase of the Units.
(6) This Agreement and all terms hereof may be changed, waived,
discharged or terminated only with the written consent of the Investor and the Partnership.
(7) This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which taken together shall constitute one agreement.
(8) The headings in this Agreement are for convenience of reference only,
and shall not limit or otherwise affect the meaning hereof.
(9) Neither this Agreement nor any amounts paid or payable as Unit Price
hereunder by the Investor may be assigned by the Advisor, the General Partner or the
Partnership without the consent of the Investor.
{61236635; 2} - 7 -
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the 15th
day of February, 2011.
BOARD OF TRUSTEES OF THE EMPLOYEES'
PENSION PLAN OF THE CITY OF
CLEARWATER, FLORIDA
By:
A44"?P?
Frank V. Hibbard
Chairperson ,??S?I•°Frt
Approved r Attest: W.
r
Ito,
;l.k4bt-. TER ??.
Stua A Kaufm n Rosemarie Call
Pension ttorn y City Clerk
Investor Tax Identification No. 596000289
Telephone Number: (727)562-4532
FORM OF ENTITY:
TX Corporation Investor's Principal Business
Partnership and Chief Executive Office
Trust Address:
Other, specify:
112 South Osceola Avenue
Clearwater, FI 33756
Investor's Jurisdiction of Organization or Formation:
State of Florida
{81236635; 2} -18-
Aggregate Subscription for Units:
US$8,000,000
All payments of distributions (all payments will be made in U.S. dollars) will be made by wire
transfer.
Wire Account Information:
Acct. Name: City of Clearwater - Cash Account
Acct. No.: 2616542
Bank Name: Northern Trust
ABA number: 071000152
FFC Name:
FFC number:
Please send all original correspondence to (check one):
_ the above address; or
X the following address:
Finance Director
City of, Clearwater
PO Box 4748
Clearwater, FL 33758-4748
Interested party information
Name:
Title (if applicable):
Company (if applicable):
Address:
Address:
Phone:
Email:
Relationship to Investor (legal advisor, trustee, agent, consultant, etc.)
(131236635;2) -19-
Please send the following reports:
capital call notices
distribution notices
financial statements
copies of tax forms upon request (K-1's, etc.)
all correspondence
Please attach a separate page for additional interested parties.
(B1236635;2) -20-
SUBSCRIPTION AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the 15th,
day of February, 2011.
BOARD OF TRUSTEES OF THE EMPLOYEES'
PENSION PLAN OF THE CITY OF
CLEARWATER, FLORIDA
By:
Frank V. Hibbard
Chairperson
FORM OF ENTITY:
-X_ Corporation
Partnership
Trust
Other; specify:
Attest:
X4d-? clai t
Rosemarie Call
City Clerk
S?oFr??
Investor's Principal Business
and Chief Executive Office
Address:
112 South Osceola Avenue
Clearwater, FI 33756
Investor's Jurisdiction of Organization or Formation:
State of Florida
- 2'I -
(B1236635;2)
Approved as to form:
Aggregate Subscription for Units:
US$8,000,000
All payments of distributions (all payments will be made in U.S. dollars) will be made by wire
transfer.
Wire Account Information:
Acct. Name: City of Clearwater - Cash Account
Acct. No.: 2616542
Bank Name: Northern Trust
ABA number: 071000152
FFC Name:
FFC number:
Please send all original correspondence to (check one):
_ the above address; or
X the following address:
Finance Director
City of Clearwater
PO Box 4748
Clearwater FL 33758-4748
Interested party information
Name:
Title (if applicable):
Company (if applicable):
Address:
Address:
Phone:
Email:
Relationship to Investor (legal advisor, trustee, agent, consultant, etc.)
{B1236635;2) -22-
Please send the following reports:
capital call notices
distribution notices
financial statements
copies of tax forms upon request (K-1's, etc.)
all correspondence
Please attach a separate page for additional interested parties.
{51236635;2) -23-
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement"), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions.
Executed this 15th day of February, 2011.
LIMITED PARTNER:
BOARD OF TRUSTEES OF THE EMPLOYEES'
PENSION PLAN OF THE CITY OF
CLEARWATER, FLORIDA
By:
Frank V. Hibbard
Chairperson yS?oFry
Approved as to form: Attest:
C'
(B1236635-12)
Rosemarie Call
City Clerk
Name of Investor
-24-
Pension Attorney
GENERAL PARTNER:
John Hancock Timber Resource
Corporation
By:
Name:
Title:
{61236635; 2} -25-
HANCOCK TIMBERLAND XI LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT SIGNATURE PAGE
The undersigned, having received and reviewed the Confidential Private Placement
Memorandum of Hancock Timberland XI LP dated December 9, 2010, as amended (the
"Memorandum"), and the Amended and Restated Limited Partnership Agreement of Hancock
Timberland XI LP (the "Partnership Agreement"), hereby becomes a party to the Partnership
Agreement and agrees to all of the terms and provisions of the Partnership Agreement and to
be bound by all of its terms and provisions.
Executed this 15th day of February, 2011.
Chairperson
BOARD OF TRUSTEES OF THE EMPLOYEES'
PENSION PLAN OF THE CITY OF
CLEARWATER, FLORIDA ,
By: "OL??
Frank V. Hibbard
West:
LIMITED PARTNER:
vFrt
r
Rosemarie Call
City Clerk
{B1236635;2)
GENERAL PARTNER:
John Hancock Timber Resource
Corporation
By: _
Name:
Title:
-26-