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EXHIBIT 10.9.1
TIMBER PURCHASE AGREEMENT
By this Agreement, executed as of the 29th day of December, 0000,
XXXXXX RESOURCES, LLC ("Kinzua"), an Oregon Limited Liability Company, and
PIONEER RESOURCES, LLC ("Pioneer"), an Oregon limited liability company, agree
as follows:
1. PURCHASE AND SALE. Kinzua hereby purchases from Pioneer and
Pioneer hereby sells to Kinzua "the Timber" (as defined in Section 2, below) on
the real property described on Exhibit A attached hereto, which is approximately
42,420 acres situated in Wheeler, Morrow, Umatilla and Grant Counties, Oregon
(hereinafter "the Premises").
2. THE TIMBER. The term "the Timber" shall mean the merchantable
timber standing or lying on the Premises during the term of this Agreement which
is included in the following description:
2.1 VOLUME. 19,295 MBF, net short log Xxxxxxxx scale, to
be selected by Kinzua from the timber located on the Premises in accordance with
the logging plan described in Section 12.2 below.
2.2 SPECIES. Ponderosa xxxx, Xxxxxxx fir, western larch,
white fir, Xxxxxxxxx spruce, and lodgepole pine.
2.3 SIZE. For standing trees, tree segments which will
produce a 16' log to a minimum 6" top, inside bark diameter. For down trees,
tree segments which will produce an 8' log to a minimum 6" top, inside bark
diameter.
3. PRICE. The purchase price for the Timber is Five Million Five
Hundred Fifty-Six Thousand Nine Hundred Sixty Dollars ($5,556,960). Kinzua shall
account for and report to Pioneer, in accordance with Sections 6 and 7 of this
Agreement, all volumes of the Timber harvested from the Premises and all volumes
of timber in excess of 19,295 MBF harvested from the Premises. Kinzua shall pay
Pioneer, in addition to said purchase price, the following stumpage price for
any excess volumes of timber incidentally cut or removed by Kinzua: $288/MBF,
net short log Xxxxxxxx scale, all species, camp run. However, nothing in the two
preceding sentences shall be construed to allow Kinzua to cut or remove any
volume of timber substantially in excess of the volume set forth in Section 2.1,
above, or unilaterally to make any material variance in the logging plan
approved by Pioneer pursuant to the provisions of Section 12.2, below.
4. REMOVAL SCHEDULE. Subject to unusual weather conditions or
other events of force majeure, Kinzua will use its best efforts to complete
harvest and removal of the Timber not later than September 30, 1999. Kinzua will
promptly notify and confer with Pioneer as soon as Kinzua knows of circumstances
that may prevent compliance with the schedule set forth above. Notwithstanding
any such unusual weather conditions or other events of force majeure, the
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period within which Kinzua shall be required to harvest and remove the Timber
shall not extend beyond December 31, 1999.
5. TERMS OF PAYMENT.
5.1 On execution of this Agreement, Kinzua will pay to
Pioneer Five Million Five Hundred Fifty-Six Thousand Nine Hundred Sixty Dollars
($5,556,960) in full satisfaction of the purchase price for the Timber. Upon
receipt of the $5,556,960, Pioneer shall deliver to Kinzua a Timber Deed in the
form attached hereto as Exhibit B.
5.2 If, for any reason, the volume of merchantable logs
removed from the Premises is less than 19,295 MBF, the purchase price shall not
be adjusted and no portion thereof shall be refundable or rebatable, it being
understood and agreed that Kinzua shall have all risk with respect to existing
and future volumes of timber on the Premises and all risk of loss.
5.3 Unless directed otherwise in writing, Kinzua shall
make payments to Pioneer at its address set forth in this Agreement for the
purpose of providing notice.
6. UTILIZATION STANDARDS. Kinzua shall remove from the Premises
any merchantable log manufactured from severed timber. Merchantable logs shall
be those logs containing 5 board feet or more of sound, usable wood, and having
a minimum log diameter of 6" inside the bark at the small end and having a
minimum of 8 feet in length. Any log containing less than one-third net
merchantable volume that is inadvertently transported to a log yard shall be the
property of Kinzua, but Kinzua shall have no obligation to pay for such culls.
7. SCALING.
7.1 All loads shall be weighed at the Kinzua log yards
with a scale ticket that notes gross, tare, and net weights. All mixed species
loads will be 100 percent rollout scaled. Loads sorted by species shall be
scaled one in five on a random basis to determine the applicable board foot per
pound conversion factor to be used to calculate the volume of those loads
weighed, but not scaled. Scaling will follow the rules and procedures identified
under the U.S. Forest Service Handbook, FSH2409.11, and/or the "Official Rules"
of the Columbia River Log Scaling and Grading Bureau, January 1, 1982 Edition,
Reprinted January 1, 1995. All scaling will be done at the expense of Kinzua and
through an independent third party log scaling and grading bureau using one of
the above identified procedures.
7.2 Kinzua shall provide Pioneer monthly with copies of
volume reports showing the amount of Timber removed from the Premises during the
preceding month and the amount of any timber in excess of 19,295 MBF so removed.
Each such volume report shall be accompanied by payment from Kinzua to Pioneer
for any such excess timber.
8. TERM.
8.1 Kinzua shall have from the date hereof until
September 30, 1999 (the
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"Termination Date"), to cut and remove the Timber from the Premises, provided
that in the case of an event of force majeure the Termination Date shall be
extended for the period of delay caused by such event of force majeure, but in
no event shall such Termination Date be extended beyond December 31, 1999.
Thereafter, all right, title, and interest to the Timber shall revert to
Pioneer. Upon the expiration of the term of this Agreement or any earlier
termination of this Agreement, Kinzua shall execute and deliver to Pioneer a
recordable termination and release of all rights, titles, interests, powers and
privileges of Kinzua under this Agreement, in form and substance reasonably
acceptable to Pioneer.
8.2 Pioneer acknowledges that Kinzua will finance all or
a portion of the purchase price with a secured loan from U.S. Bank. Should
Kinzua default on its loan payments to U.S. Bank pursuant to said secured loan,
such that U.S. Bank or a Successor (as hereinafter defined) by the terms of U.S.
Bank's security agreement with Kinzua commences action to succeed to Kinzua's
rights under this Agreement, then and only then the Termination Date shall be
extended for the benefit of U.S. Bank or such Successor to the extent reasonably
necessary to cut and remove the balance of the Timber not yet cut and removed by
Kinzua from the Premises, but in any event not later than September 30, 2000;
provided, however, if U.S. Bank or such Successor shall at any time discontinue
or abandon such action to succeed, then the extension pursuant to this Section
8.2 shall be deemed to be rescinded and no longer effective. For purposes of
this Section 8.2, the term "Successor" shall mean any successor or assignee of
U.S. Bank other than Kinzua or Xxxx Xxxxxx or any person or entity affiliated
with or related to Kinzua or Xxxx Xxxxxx.
8.3 During the term of this Agreement as defined in
Sections 8.1 and 8.2, above, Pioneer will not cut or remove any merchantable
timber standing on the Premises.
9. PIONEER'S TITLE. Pioneer hereby warrants that it has not
granted or created any liens, claims, and encumbrances of any kind against the
Timber or the Premises since October 9, 1998, except those specified on Exhibit
C, attached hereto and by this reference made a part hereof.
10. PASSAGE OF TITLE; RISK OF LOSS. Title to the Timber shall pass
to Kinzua upon Pioneer's execution and delivery of the Timber Deed. Kinzua
assumes all risk of loss, damage, or injury to the Timber by fire, windstorm,
pestilence, act of God, act of government or other casualty not caused by
Pioneer's negligence.
11. TAXES. Pioneer shall pay all taxes levied against the
Premises, including fire patrol tax, during the term hereof, and Kinzua shall
pay all taxes levied by reason by Kinzua's harvest and removal of the Timber and
any excess timber, including without limitation, the harvest, severance and
privilege tax.
12. HARVEST PRACTICES. Kinzua shall conduct its logging operations
on the Premises in an efficient, workmanlike manner, in accordance with standard
good logging practices as the same prevail in eastern Oregon and pursuant to the
provisions of the Oregon Forest Practices Act and in accordance with the
following special provisions:
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12.1 Kinzua shall at Kinzua's expense perform all
requirements of the Oregon Forest Practices Act applicable to Kinzua's activity
on the Premises, including filing and delivering all notices to the State
Forester required by the Oregon Forest Practices Act.
12.2 Kinzua shall prepare a logging plan for each of the
operations listed in Exhibit A. These plans must be submitted to and approved by
Pioneer prior to commencement of any activity pursuant to this Agreement and
Pioneer shall not withhold approval unreasonably. These plans shall include,
among other things, the names, addresses, and telephone numbers of the logging
contractor and his field representatives, type of logging equipment to be used,
roads to be used, and dates for cutting, yarding, hauling, and current brush
piling and cleanup operations. The plan shall conform to the terms of this
Agreement. A breach of any logging plan approved by Pioneer pursuant to this
Section shall be considered a breach of this Agreement.
12.3 Felling of merchantable trees shall be done so as to
minimize breakage and waster.
12.4 Kinzua shall pay all costs of labor and materials and
shall keep the properties of Pioneer free from liens and encumbrances.
12.5 Pioneer may temporarily suspend Kinzua's operations
in periods of extreme fire danger or whenever, in Pioneer's reasonable judgment,
they might cause excessive damage to lands, water quality, roads or forest soils
because of weather conditions during extreme wet periods.
12.6 Upon completion of all logging operations under this
Agreement, Kinzua shall promptly remove all equipment, refuse, wire rope,
litter, scrap and trash brought onto the Premises or deposited along access
roads by Kinzua, its agents, contractors or employees. All lunch-box garbage,
empty oil and grease containers, empty cans or anything of a nonbiodegradable
nature shall be removed from the Premises on a daily basis.
12.7 Kinzua shall be responsible for any trespass outside
the Premises boundary marked on the ground by Pioneer.
12.8 In the event any fuel oil, petroleum products, or
other hazardous wastes are deposited on any part of the Premises or along any
access roads as a result of any activities of Kinzua or Kinzua's contractors,
Kinzua shall promptly notify Pioneer of such fact and shall also immediately
remove and clean up the same in full compliance with all provisions of State and
Federal law. Kinzua shall defend, indemnify and save harmless Pioneer against
any and all losses, expenses, damages, claims, fines, charges, liens,
liabilities, actions, causes of action or proceedings of any kind relating to
the environmental condition of the Premises and arising directly or indirectly
out of or in connection with the acts or omissions of Kinzua or any of its
agents, contractors or employees.
13. ROAD CONSTRUCTION, USE AND MAINTENANCE. Kinzua agrees to and
shall comply
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with the following terms and provisions in constructing, using and maintaining
all logging roads:
13.1 Kinzua shall have the right to build such temporary
roads upon the Premises as may be necessary to log the Premises. No road shall
be constructed, and no existing road shall be used, until such planned
construction or use has been disclosed to and approved by Pioneer as part of the
logging plan. In constructing any road, Kinzua shall abide by applicable State
and Federal laws.
13.2 Pioneer shall be responsible for deferred maintenance
charges assessed under the Cooperative Maintenance Agreement with the US Forest
Service for any volume hauled over costs share roads. Kinzua shall be
responsible for any other current maintenance or for paying for maintenance of
roads used in performing this Agreement except that if there are other users for
commercial hauling, performance of or payment for maintenance will be a
responsibility shared in proportion to use with such other users. Road
maintenance shall include keeping culverts, culvert catch basins, and ditches
free of debris, grading the road surface, and adding of rock to maintain road
surface during periods of log hauling. Within a reasonable period of time after
termination of log hauling, Kinzua shall leave roads in a condition equal to or
better than existed prior to Kinzua's logging and hauling operations. Kinzua
shall pay all costs in connection with maintenance work attributable to Kinzua's
use of the roads.
14. PRESERVATION OF SURVEY MONUMENTS. Kinzua is responsible for
preservation of survey monuments. Should Kinzua destroy or damage any said
monument during Kinzua's operations, Kinzua shall have the monuments replaced by
a registered professional land surveyor licensed in Oregon, and shall effect the
appropriate filing of the resurvey with the County Surveyor.
15. DAMAGE TO RESERVED TREES. Reserved trees are those on or off
the Premises, including wildlife trees, not to be cut by Kinzua. If Kinzua's
activities result in damage to reserved trees as determined by Pioneer, Kinzua
shall take such trees and pay for such trees as liquidated damages double the
fair market value therefor. If the State Forest Practices Officer determines
that Kinzua has damaged wildlife trees or logs, then Kinzua will be required to
remedy the problem in accordance with the State's instructions at Kinzua's
expense.
16. SLASH DISPOSAL. Kinzua will be responsible for disposal of
slash as required by the Oregon Forest Practice Rules and Statutes except for
burning. Pioneer will be responsible for burning.
17. REFORESTATION. Pioneer shall be responsible for reforestation
work and costs complying with State requirements except in situations where a
violation of the logging plans (referenced in paragraph 12.2) by Kinzua or its
contractor has created a reforestation liability. In that case Kinzua is liable
for the costs of reforestation to a level acceptable to Pioneer in its
reasonable discretion.
18. FIRE PRECAUTIONS AND SUPPRESSION. During the time that this
Agreement remains in force, Kinzua shall independently make every reasonable
effort to prevent and
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suppress forest fires on the Premises. Kinzua shall be responsible for any
expense, liability, or claims of liability resulting from any default by Kinzua
in performance of its obligations under this Section 18. Kinzua shall defend,
indemnify and hold harmless Pioneer from all liability to governmental
authorities or to public or private parties arising out of Kinzua's violation of
law, or from fire resulting from Kinzua's negligent acts or omissions or willful
misconduct.
19. ASSUMPTION OF RISKS AND INDEMNITY.
19.1 Pioneer has made no representations as to the present
or future conditions of or on its property or the character or amount of traffic
on any access roads. Kinzua assumes all risks of personal injury or property
damage to itself and its employees, agents and contractors in connection with
operations under this Agreement.
19.2 Kinzua shall pay for all damage to Pioneer's property
and to the property of any third parties resulting directly or indirectly from
negligent acts or omissions or willful misconduct by Kinzua, its employees,
agents, or contractors in performing this Agreement.
19.3 Kinzua shall defend, indemnify and save harmless
Pioneer against any and all losses, expenses, damages, claims, fines, charges,
liens, liabilities, actions, causes of action or proceeding of any kind
whatsoever (whether or not arising on account of damage to or loss of property,
or injury to or death of any person) arising directly or indirectly out of or in
connection with the acts or omissions of Kinzua or any of its agents,
contractors or employees, except those caused solely by Pioneer's negligence.
The foregoing indemnification in favor of Pioneer includes, without limitations,
any claim for injury to persons or property, nuisance, mechanics' and
materialmen' liens, workers' compensation or unemployment taxes, fines and
penalties, and any environmental damages. Kinzua shall perform all its
obligations and carry on all its operations and activities hereunder as an
independent contractor and entirely at its own risk and responsibility. Kinzua
shall be responsible for activities of its subcontractors. Kinzua will reimburse
Pioneer for all costs reasonably incurred by Pioneer to defend against such
claims through attorneys of Pioneer's choice.
19.4 Pioneer expressly disclaims, and Kinzua expressly
acknowledges such disclaimer, making or giving any warranty regarding the costs
or feasibility of logging such timber; Kinzua acknowledges relying solely upon
Kinzua's own estimates of said costs and feasibility.
20. INSURANCE. At all times during the period of this Agreement
and any extension thereof or until all work required by this Agreement is
completed, Kinzua shall have in effect comprehensive property damage and
personal injury liability insurance, including coverage for motor vehicles, as
required by this section. The insurance shall be in the amounts specified and
shall afford the coverage as described below.
Kinzua shall have worker's compensation insurance meeting statutory
requirements for all Kinzua's employees, and shall require Kinzua's contractors
and subcontractors to have worker's compensation insurance covering all
employees involved in operations hereunder.
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Kinzua shall furnish to Pioneer certificates of insurance evidencing
that the required insurance has been issued to Kinzua or to its contractors or
subcontractors, as the case may be, and is in force on the date of the
certificates. The insurance shall be written by a company or companies
authorized to do business in the State of Oregon. The issuing company or
companies shall agree on the certificate or an attachment thereto that Pioneer
shall be given thirty (30) days prior written notice of intended cancellation of
the insurance. Pioneer, its agents, owners and employees shall be named as
additional insured parties under all said property damage, comprehensive and
personal injury liability insurance policies. Kinzua shall at all times during
the period of this Agreement and any extension thereof or until all work
required by this Agreement is completed have in effect loggers broad form
property damage and public liability insurance coverage, with the contractual
liability exclusion deleted, in the amounts specified below:
Bodily Injury or Death:
Each Person $2,000,000
Each Occurrence $2,000,000
Property Damage:
Any One Occurrence $2,000,000
If any said policy shall lapse or shall be canceled at any time during
the life of this Agreement, Pioneer shall have the right immediately to suspend
all of Kinzua's logging activities hereunder until insurance requirements are
fully met by Kinzua.
21. EXAMINATION OF LOCATIONS AND CONDITIONS. It is understood that
Kinzua, before signing this Agreement, has made a careful examination thereof
and an analysis of all requirements and specifications set forth herein; that
Kinzua has independently evaluated the character of the work required, and has
not relied upon estimates by Pioneer, and that Kinzua has made a careful
examination of the Premises and the location and conditions of work. Pioneer in
no case will be responsible for any loss or cost that may be suffered by Kinzua
as a result of the failure of Kinzua to be so informed.
22. AUTHORIZED REPRESENTATIVE; INSPECTION. Pioneer and its
designated field representative or representatives shall have the right to
inspect progress of work, and to issue instructions in regard to required
compliance with the terms of this Agreement. Pioneer, through its authorized and
designated representative or representatives, shall at all times be allowed
access to all parts of the logging operations and work locations of Kinzua, and
shall be furnished such information and assistance by Kinzua, or the designated
representative or representatives of Kinzua, as may be required to make a
complete and detailed inspection.
23. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement shall be settled by arbitration, except any claim for
injunctive relief pursuant to Section 24.2.1 below or any action in equity to
enforce specific performance pursuant to Section 24.2.3 below. Arbitration shall
take place before a panel of three arbitrators, one chosen by Pioneer, one by
Kinzua and the third chosen by the first two. The arbitration shall be held in
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such place in the metropolitan Portland, Oregon area as may be specified by the
arbitrators or a majority of them and shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
decision of the panel shall be final and binding and may be enforced, if
necessary, in any court of competent jurisdiction. The determination of which
party (or combination of them) bears the costs and expenses incurred in
connection with any such arbitration proceeding shall be determined by the
panel. The panel shall have no power or jurisdiction to consider evidence with
respect to or to render any award of or judgment for punitive damages
24. DEFAULT.
24.1 Time and strict performance hereunder are the essence
of this Agreement, and it is agreed that any one of the following shall
constitute an event of default:
24.1.1 Failure by Kinzua to pay any amount owing to
Pioneer under this Agreement on or before the due date thereof.
24.1.2 Failure by either party to keep and perform
any agreement, covenant or condition hereunder (other than a payment default by
Kinzua under Section 24.1.1), if such failure shall continue for a period of
thirty (30) days after written notice thereof from the other party, provided,
however, if such failure to perform is not curable within such 30-day period, it
shall not be an event of default if the non-performing party, promptly after
such notice, commences such actions as shall be necessary to cure such failure,
diligently pursues such curative action and completes the cure of such failure
as soon as reasonably possible.
24.2 In the event Kinzua defaults in any manner set forth
herein, Pioneer shall have the right to exercise any one or more of the
following rights, powers, and remedies, which shall, to the full extent
permitted by law, be cumulative and not alternative:
24.2.1 to obtain injunctive relief with respect to
any breach of or default under this Agreement; provided, however, Pioneer shall
not have the right to enjoin harvest practices which comply with the provisions
of this Agreement; and provided further, no injunction against Kinzua with
respect to a breach or default by Kinzua shall be effective against the Bank or
a Successor (as defined in Section 8.2), but nothing in this section shall
prevent Pioneer from obtaining an injunction against the Bank or such Successor
for its own acts or omissions in breach or violations of this Agreement.
24.2.2 to recover damages from Kinzua's breach of
contract;
24.2.3 to specifically enforce this Agreement by
suit in equity.
24.3 Nothing contained in this Section 24 shall be deemed
or construed to extend the Termination Date as determined under Section 8 above.
25. ATTORNEY'S FEE. In the event any arbitration, suit or action
is filed by either party
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hereto to enforce any of the terms, covenants or provisions of this Agreement,
or to rescind the same, the party prevailing in any such proceeding, or any
appeal therefrom, shall be entitled to reasonable attorney's fees at the trial
level and on appeal or review to be established by the arbitration panel or
Court, and expert witness fees, together with all costs otherwise recoverable
under Oregon law, from the non-prevailing party.
26. ACCESS. Pioneer makes no representations or warranties,
express or implied, with respect to rights of access to any portion of the
Premises.
Pioneer hereby assigns to Kinzua, which assignment shall terminate upon
the expiration or earlier termination of this Agreement, Pioneer's rights in any
easements, permits, or licenses granting Pioneer ingress and egress to the
Premises over or through land owned by third parties, provided that such
assignment shall be non-exclusive and Pioneer shall continue to have and may
also exercise all such rights.
27. ASSIGNMENT. Pioneer shall have the right to assign this
Agreement, in whole or in part, without the consent of Kinzua. Kinzua shall not
have the right, without Pioneer's prior written consent, to assign this
Agreement, in whole or in part, either voluntarily or by operation of law;
except that Pioneer agrees that it will not unreasonably withhold its consent to
(i) Kinzua's assignment of a security interest in its interest in this Agreement
and the Timber to its bank; and (ii) Kinzua's assignment of its interest in this
Agreement and in the Timber to a purchaser(s) of Kinzua's manufacturing
facilities.
28. REPRESENTATIONS. Each party represents that: it is a limited
liability company duly organized, and validly existing, and in good standing
under the laws of Oregon and is qualified and licensed to do business in Oregon;
it has full power and authority to execute and perform this Agreement and that
all action necessary to confirm such authority has been duly and lawfully taken,
except that, with respect to Pioneer, the consent and/or subordination of
Pioneer's lenders may be necessary; upon execution hereof, this Agreement shall
constitute its valid, legally binding obligation; neither execution nor
performance of this Agreement will violate the terms of any provision of its
Articles of Incorporation, Bylaws, Operating Agreement or any note, loan
agreement, commitment agreement, lease or other material contract or agreement
to which it is a party, except that, with respect to Pioneer, the consent and/or
subordination of Pioneer's lenders may be necessary. Each party shall delivery
to the other a certified copy of a resolution of its Management Committee
authorizing the execution of this Agreement or such other evidence of authority
that is reasonably acceptable to the other.
29. NOTICES. Any notice or demand required or permitted to be
given under the terms of this Agreement shall be deemed to have been duly given
or made if given by any of the following methods:
29.1 Deposited in the United States mail, in a sealed
envelope, postage prepaid, by registered or certified mail, return receipt
requested, or hand delivered, respectively addressed as follows:
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If to Pioneer: Xxxxx X. Xxxxxxxx
Pioneer Resources, LLC
00 X. Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
If to Kinzua Xxxx Xxxxxx
Kinzua Resources, LLC
00000 Xxxxx Xxxx
Xxxxxx, XX 00000
29.2 Sent to the above address via an established national
overnight delivery service (such as Federal Express) charges prepaid; or
29.3 Sent via any electronic communications method,
provided the sender obtains written confirmation of receipt of the
communications by the electronic communication equipment at the office of the
addressee listed above; provided also that, if this method is used, the party
shall immediately follow such notice with a second notice in one of the methods
set forth in subsections 29.1 or 29.2 above.
Notices shall be effective three business days after mailing if sent by
United States mail, one business day after dispatch is sent by overnight
delivery service, and upon receipt if hand delivered or sent by an electronic
communications method.
30. MODIFICATION. No modification of this Agreement shall be valid
unless made in writing and duly executed by Pioneer and Kinzua.
31. NO WAIVER. The failure of either party to insist upon prompt
and strict performance of any of the terms or conditions in this Agreement shall
not constitute a waiver of such party's right to insist upon strict performance
thereafter or in other instances.
32. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the state of Oregon, except for its
rules pertaining to conflicts of laws.
33. COUNTERPARTS, EXECUTION BY FACSIMILE. This Agreement may be
executed in several counterparts, each of which will be deemed to be an original
and all of which will together constitute one in the same instrument.
Delivery of an executed copy of this Agreement by facsimile
transmission will be deemed to be an execution and delivery of this Agreement on
the date of such transmission by the party so delivering such a copy, provided
that the party so delivering such a copy via facsimile transmission shall
deliver the executed original of this Agreement to the other party herein within
three (3) days of the date of delivery of the copy sent via the facsimile
transmission.
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34. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This document
constitutes the entire agreement between the parties and merges and replaces all
prior negotiations, discussions, representations, warranties, and agreements of
the parties with respect to the subject matter hereof. Because this Agreement
has been the subject of negotiation between the parties, the rule of
construction that any ambiguity is to be construed against the drafter shall not
apply. This Agreement shall be binding upon and inure to the benefit of the
respective successors and permitted assigns of the parties. In the event of any
conflict between this Agreement and any exhibit attached hereto, the terms of
this Agreement shall be controlling.
35. CLOSING.
35.1 This transaction shall close in escrow at Oregon
Title Insurance Company, Eugene, Oregon, on or before December 29, 1998,
provided that if (a) the conditions set forth in Section 35.2 have not been
satisfied or waived by Kinzua and (b) Pioneer has not unconditionally received
the $5,556,960 purchase price in cash, both on or before December 30, 1998, then
this Agreement shall be deemed automatically terminated and neither party shall
have any further rights or obligations hereunder.
35.2 Kinzua's obligations to close are subject to and
conditioned upon written approval from its Lender, U.S. Bank, of (i) this
Agreement, (ii) the Timber Deed attached hereto as Exhibit B, (iii) the
Subordination Agreement to be provided by Pioneer's Lender, First Union National
Bank, and (iv) a commitment from a title insurance company to insure the first
lien of U.S. Bank's security interest in the Timber, subject only to exceptions
to title which U.S. Bank shall approve.
35.3 Kinzua shall pay all title insurance costs, recording
fees and other closing costs in connection with such closing.
Executed as of the date first set forth above.
PIONEER RESOURCES, LLC KINZUA RESOURCES, LLC
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxx
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Name: Xxxxx X. Xxxxxxxx Name:
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Title: Vice President Title: President
Schedule of Exhibits:
A: Legal Description of Premises
B: $5,556,960 Timber Deed
C: Exceptions to Title
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EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
(THE PORTIONS OF THE FOLLOWING DESCRIBED PROPERTIES OWNED BY PIONEER RESOURCES, LLC)
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PIONEER RESOURCES, LLC STUMPAGE CONTRACT TO KINZUA RESOURCES, LLC
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UNIT BLOCK SALE NAME LEGAL DESCRIPTION ACRES
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Pilot Rock Desolation Bomber T7S, R32E, Sec 35 640
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Pilot Rock Desolation Starveout T8S, R32E, Secs 1, 2, 11, 12 1,500
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Pilot Rock Desolation Spring T6S, R33E, Sec 6; X0X, X00X, Sec 1 (portion Northeast of 380
Desolation Creek)
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Pilot Rock Xxxxxxxx Xxxx, Xxxxxx, Xx X0X, X00X, Secs 1-5, 8-17, 20-24, 26-29; T6S, R31E, Secs 5-9 16,920
Name, Rush, Snake
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Pilot Rock Xxxxxxx Xxxxxxx T5S, R30E, Secs 24, 25, 36; X0X, X00X, Secs 19, 29-32 4,360
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxx 0 Xxxxx X0X, X00X, Secs 13, 22-26, 36 2,760
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxx 0 Xxxxx X0X, X00X, Xxxx 0, 0, 0, 00-00, 00-00, 00 (Xxxxx half), 35 (North 9,300
of 21 road)
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Xxxxxxx Xxxx 0 Xxxxxx X0X, X00X, Secs 34 (South half), 35 (South of 21 road) 600
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxx 0 Xxxxxxxxx X0X, X00X, Secs 23-26, 35, 36 2,600
---------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxx 0 Xxxxx Xxxxx X0X, X00X, Secs 5-9, 16-18, 20 3,360
---------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL 42,420
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13
EXHIBIT B
STATUTORY BARGAIN AND SALE TIMBER DEED
PIONEER RESOURCES, LLC, an Oregon limited liability company ("Grantor")
conveys to KINZUA RESOURCES, LLC, an Oregon limited liability company
("Grantee"), without any covenants or warranties of title except as expressly
set forth below, all of the "Timber" (as defined below) on those certain parcels
of land situated in Wheeler, Morrow, Umatilla and Grant Counties, Oregon,
described below:
SEE EXHIBIT A ATTACHED HERETO
AND INCORPORATED HEREIN (the "Land")
Together with the rights to enter upon the Land, to cut and remove the
Timber and to build, maintain and repair roads, all subject to and in accordance
with the provisions of the Timber Purchase Agreement, which is defined below.
The true consideration for this conveyance is the sum of $5,556,960.
As used herein, the term "Timber" shall mean the merchantable timber
standing or lying on the Land during the term of this Deed which is included in
the definition of "Timber" set forth in the Timber Purchase Agreement.
Grantee shall have until September 30, 1999 (the "Termination Date") to
cut and remove the Timber. Provided however, at the election of Grantee, the
Termination Date shall be extended for the period of any delay(s) in Grantee's
harvest and removal of the Timber due to acts of God, acts of government, labor
disputes, strikes, weather conditions or other events of force majeure beyond
the reasonable control of Grantee. If any such extension shall apply, Grantee
shall use its best efforts to complete its full performance hereunder as soon as
possible thereafter. Notwithstanding the foregoing, in no event shall the
Termination Date be extended beyond December 31, 1999; provided, however, the
Termination Date may be extended under certain other limited circumstances, to
the extent expressly provided in the Timber Purchase Agreement, to a date not
later than September 30, 2000.
On the Termination Date, all right, title and interest in and to any
remaining Timber shall revert automatically to the Grantor herein, it successors
and assigns, without the requirement of any action by any party hereto.
Grantor hereby warrants to Grantee that Grantor has not granted or
created any liens, claims, and encumbrances of any kind against the Timber or
the Land since October 9, 1998, except those specified on EXHIBIT B attached
hereto and incorporated herein.
This Timber Deed has been executed and delivered, and accepted, subject
to the terms and provisions of that certain Timber Purchase Agreement dated as
of December 29, 1998 between Grantor and Grantee ("Timber Purchase Agreement"),
which by this reference is hereby incorporated herein.
14
EXECUTED as of the 29th day of December, 1998.
GRANTOR:
PIONEER RESOURCES, LLC, an Oregon
limited liability company
By:
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Vice President
STATE OF )
--------------------
)ss.
County of )
--------------------
This instrument was acknowledged before me on December ___, 1998, by
Xxxxx X. Xxxxxxxx, Vice President of PIONEER RESOURCES, LLC, an Oregon limited
liability company.
------------------------------------
NOTARY PUBLIC FOR OREGON
My Commission Expires:
--------------
[NOTARIAL SEAL]
Upon recording return to:
Kinzua Resources, LLC
00000 Xxxxx Xxxx
Xxxxxx, XX 00000
15
15
EXHIBIT C
TO TIMBER PURCHASE AGREEMENT
Exceptions to Title
1. Deed of Trust, Fixture Filing and Security Agreement With Assignment of
Rents, dated as of October 9, 1998, from Pioneer Resources, LLC
("Grantor") to Oregon Title Insurance Company, as Trustee ("Trustee"),
in trust for the benefit of First Union National Bank, as
Administrative Agent for the Lenders referred to therein
("Beneficiary"), as recorded in the public records of Xxxxxxx County,
Oregon.
2. Deed of Trust, Fixture Filing and Security Agreement With Assignment of
Rents, dated as of October 9, 1998, from Pioneer Resources, LLC
("Grantor") to Oregon Title Insurance Company, as Trustee ("Trustee"),
in trust for the benefits of First Union National Bank, as
Administrative Agent for the Lenders referred to therein
("Beneficiary"), as recorded in the public records of Xxxxxx County,
Oregon.
3. Deed of Trust, Fixture Filing and Security Agreement With Assignment of
Rents, dated as of October 9, 1998, from Pioneer Resources, LLC
("Grantor") to Oregon Title Insurance Company, as Trustee ("Trustee"),
in trust for the benefit of First Union National Bank, as
Administrative Agent for the Lenders referred to therein
("Beneficiary"), as recorded in the public records of Umatilla County,
Oregon.
4. Deed of Trust, Fixture Filing and Security Agreement With Assignment of
Rents, dated as of October 9, 1998, from Pioneer Resources, LLC
("Grantor") to Oregon Title Insurance Company, as Trustee ("Trustee"),
in trust for the benefit of First Union National Bank, as
Administrative Agent for the Lenders referred to therein
("Beneficiary"), as recorded in the public records of Grant County,
Oregon.
16
