Each Option Agreement provides for customary representations, warranties and covenants from the Bandon Seller party thereto, which representations, warranties and covenants will survive for a period of one year from closing. Each Option Agreement provides that the Bandon Seller party thereto will indemnify the Company for breaches of such Bandon Seller’s representations, warranties and covenants, provided that the maximum amount of such indemnification will not exceed 10% of the portion of the aggregate Purchase Price payable pursuant to such Option Agreement.
The termination of any Option Agreement will cause the automatic termination of the other Option Agreements.
On August 22, 2018, the Company issued a press release announcing the entry into the Sale Agreement and the Company’s exercise of its options pursuant to the Option Agreements. A copy of the press release was filed as Exhibit 99.1 to the Company’s Current Report on Form8-K filed with the Securities and Exchange Commission on August 22, 2018.
Credit Facility Amendment
The Company is a party to that certain Fifth Amended and Restated Credit Agreement, dated as of December 1, 2017 (the “Credit Agreement”) by and among CatchMark Timber Operating Partnership, L.P., as borrower, the Company and its wholly-owned subsidiaries, as guarantors, CoBank, ACB, as administrative agent, joint lead arranger, sole bookrunner, swingline lender and issuing lender, AgFirst Farm Credit Bank, as joint lead arranger and syndication agent, and Coöperatieve Rabobank U.A., New York Branch, as documentation agent, and certain financial institutions, as lenders. On August 22, 2018, the Credit Agreement was amended to, among other things, add a new $140,000,000 seven-year term loan credit facility (the “TermA-4 Loan Facility”) and to decrease the commitment under the seven-year multi-draw term credit facility from $265,000,000 to $200,000,000, as well as to make certain technical changes to permit the borrower to create a profits interest incentive program, subject to the Company approving such a program. The TermA-4 Loan Facility will bear interest at an adjustable rate equal to a base rate plus 0.70% or a LIBOR rate plus 1.70%, and will terminate and all amounts outstanding under the TermA-4 Loan Facility will be due and payable on August 22, 2025.
The Company will file the Sale Agreement, the Option Agreements and the amended Credit Facility as exhibits to the Company’s Quarterly Report on Form10-Q for the quarter ending September 30, 2018. The foregoing descriptions of the Sale Agreement, the Option Agreements and the amendments to the Credit Facility and the transactions contemplated thereby do not purport to be complete and are subject to and qualified in their entirety by reference to the terms of the respective agreements.
Forward-Looking Statements
This report containsforward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking. Forward-looking statements are not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Forward-looking statements in this report include, but are not limited to, statements about the expected timing of the completion of the proposed transactions and other statements that are not historical facts.
Forward-looking statements are based on a number of assumptions involving judgments and are subject to risks, uncertainties and other factors that could cause actual results to differ materially from our historical experience and present expectations. Such risks and uncertainties include, but are not limited to, the risks that the conditions to the closing of one or both of the proposed transactions may not be satisfied; the length of time necessary to consummate one or both of the proposed transactions may be longer than contemplated for various reasons; the acquired Bandon assets and operations may not be integrated successfully or integration costs may be higher than anticipated; the expected benefits of the proposed transactions may not be fully realized or may take longer to realize than expected; the diversion of management time on transaction-related matters; the potential impact of the announcement or consummation of the proposed transactions on relationships with customers, suppliers, competitors, and management and other employees; and litigation risks related to the proposed transactions. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We make no representations or warranties (express or implied) about the accuracy of any forward-looking statements contained in this report, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
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