Item 1.01
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Entry into a Material Definitive Agreement
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On July 6, 2018, CatchMark Timber
Operating Partnership, L.P, a wholly owned subsidiary of CatchMark Timber Trust, Inc. (CatchMark), completed its previously announced (and as previously disclosed in the Current Report on Form 8-K on May 18, 2018) investment of
$200 million of common equity investment in Creek Pine Holdings, LLC (Holdings), funded using a combination of
cash-on-hand
and borrowings under
CatchMarks senior credit facility. Also on that date Holdings and affiliates of BTG Pactual Timberland Investment Group, Highland Capital Management, Medley Capital LLC, British Columbia Investment Management Corporation and other equity
investors (collectively, the Preferred Investors) completed their previously announced investment of $925.9 million investment in a joint venture, TexMark Timber Treasury, L.P. (Triple T), for purposes of completing the
transactions contemplated by the Crown Pine Purchase Agreement (as described below).
On July 6, 2018, Triple T (through its
indirect, wholly owned subsidiary, Creek Pine, LLC, a Delaware limted liability company (Creek Pine)) completed the previously announced transactions contemplated by the Crown Pine Purchase Agreement (the Crown Pine Purchase
Agreement) by and among Creek Pine, as assignee of Holdings of its rights and obligations under the Crown Pine Purchase Agreement, Crown Pine Timber 1, L.P. (CP Timber 1), Crown Pine Parent, L.P. (CP Parent), Crown Pine
REIT, Inc. (CP REIT) and GPT1 LLC (together with CP Parent and CP REIT, the Sellers). Pursuant to the Crown Pine Purchase Agreement, Creek Pine acquired all of the outstanding partnership interests in CP Timber 1 for
approximately $1.37 billion in cash (the Acquisition), subject to finalizing certain purchase price adjustments. CP Timber 1 and its subsidiaries are the fee simple owners of 1,099,875 gross acres of fee simple lands located in
Southeast Texas.
The purchase price was financed through the proceeds of the equity contributions to Creek Pine described above and a
$600 million, seven-year term loan made pursuant to the terms and conditions of a credit agreement, dated July 6, 2018 between Creek Pine REIT, LLC (Creek Pine REIT), Creek Pine Intermediate, LLC, Creek Pine, Creek Pine Timber
GP, LLC, CoBank ACB, as administrative agent, and the lenders party thereto.
Borrowings under the term loan bear interest at a floating rate equal to LIBOR or a base rate, plus a margin determined based upon a
loan-to-value
ratio and are secured by all of the assets of Creek Pine REIT and its subsidiaries.
In connection with the completion of the transactions contemplated by the Crown Pine Purchase Agreement, on July 6, 2018, Holdings and
the Preferred Investors entered into an agreement of limited partnership in connection with Triple T (the Joint Venture Agreement). The Joint Venture Agreement provides for a term of five years (extendable, subject to certain
approvals, to 7 and 10 years), preferred return to the Preferred Investors in priority to Holdings, subsequent preferred return to Holdings and, finally, participation by Holdings, on the one hand, and the Preferred Investors, on the other hand, in
remaining distributions in percentages equal to 50%/50% or 80%/20%, respectively, depending upon the occurrence of certain contingencies. In addition, the Joint Venture Agreement provides for a board where designees of Holdings will hold the
majority of the votes, certain major decisions requiring the consent of Holdings and a majority of the board designees appointed by Preferred Investors and certain refinancing options in favor of Holdings.
In connection with the Joint Venture Agreement, a subsidiary of CatchMark has entered into an asset management agreement (the Asset
Management Agreement), pursuant to which CatchMark will receive an asset management fee equal to 1%, subject to reduction in certain circumstances, of the value of the equity contributions from the Preferred Investors of Triple T during the
term of the Joint Venture Agreement.
The foregoing descriptions of the Joint Venture Agreement and the Asset Management Agreement (the
Transaction Agreements) and the transactions contemplated thereby do not purport to be complete descriptions and are subject to and qualified in their entirety by reference to the Transaction Agreements, copies of which are either
attached hereto as Exhibits 10.1 and 10.2, respectively, the terms of which are incorporated herein by reference.