TITLE









Exhibit

10.16




 




FIFTH

AMENDMENT TO




MASTER TIMBER MANAGEMENT AGREEMENT




 




(Canada Operations)




 




THIS FIFTH AMENDMENT (the “Amendment”) is dated as of the lst day of

December, 2000, by and between HANCOCK NATURAL RESOURCE GROUP, INC., a

Delaware corporation (hereinafter referred to as “HNRGI” or the “Client”), and ORM

RESOURCES CANADA LTD., a British Columbia company (hereinafter

referred to as “Manager”).  Capitalized

terms not otherwise defined in this Amendment shall have the meanings given

therefor in that certain Master Timber Management Agreement effective as of

January 1, 1998, as amended by the agreements listed on Exhibit A

hereto (herein collectively the “Master Agreement”).




WHEREAS, the parties hereto are parties to the Master Agreement, and




WHEREAS, the parties wish to amend the Master Agreement, all as set

forth herein,




NOW, THEREFORE, the parties hereby agree as follows:




1.             Extension of Term.  The term of the

Master Agreement is hereby extended for an additional one (1) year period

commencing January 1, 2001 and continuing through and including

December 31, 2001.




2.             Property Management Service Fee.  Exhibit lA of

the Master Agreement is hereby replaced by Exhibit lA to this

Amendment.  This replacement is

effective as of January 1, 2001.




3.             Decision Making and Signing

Authority.  Effective immediately, Exhibit 1B of

the Master Agreement is hereby replaced by Exhibit 1B to this Amendment.




4.             Real Estate Sales Contract.  Effective

immediately, Exhibit 2A of the Master Agreement is hereby replaced by Exhibit

2A to this Agreement.




5.             Additional Services.  The compensation for

additional management services outlined in Exhibit 1A of the Master

Agreement is hereby replaced by Exhibit B of this Agreement.  This replacement is effective as of

January 1, 2001.




6.             Disposition and Acquisition Time

and Material Fees.  The compensation for disposition and

acquisition services outlined in Exhibit lA of the Master Agreement is

hereby replaced by Exhibit 3B to this Agreement.  This replacement is effective as of

January 1, 2001.




7.             Plans and Endowments.  Effective

immediately, Section 4.02 of the Master Agreement (as previously amended by the

Amendment dated December 29, 1998) is amended by deleting the definition

of “Plans and Endowments” therein and inserting the following in its stead:




 





























 




“Plans and Endowments means pension fund or retirement plans and

accounts, endowments or foundations domiciled in the United States or Canada

and organized and operated pursuant to the United States or Canadian law

primarily or exclusively for the benefit of persons living within those

jurisdictions; provided, however, that the terms “endowments” and “foundations”

shall not include organizations or entities that own or acquire timberlands for

conservation, environmental enhancement, wildlife protection or purposes other

than commercial timberland activities.”




8.             Manager’s Primary Duties and

Responsibilities.  Effective January 1, 2001, Section 1.02

of the Master Agreement shall be amended by including the following additional

Manager duties and responsibilities:




(r)            Manager shall

participate in timber landowner association working groups and committees, such

as PFLA, WFPA, OFIC, and CFA, at a level to be mutually determined by Client

and Manager.




(s)           Manager shall

support Client’s efforts in client service, including support in planning and

implementation of routine client tours, and in responding to routine

property-related client information requests.




(t)            Manager shall

assist Client in periodic, routine special projects, including cost

benchmarking, data tracking, reporting, or mapping requests that potentially

add value to Client’s properties. Manager shall not be responsible for

out-of-pocket expenses associated with such projects, nor is this section

intended to address large-scale projects.




(u)           Manager shall

monitor and participate in forest research cooperatives as needed, so that

Manager’s forest management planning and implementation reflects the currently

publicly available knowledge and technology. All new strategies and tactics in

property management shall be pre-approved by Client.




(v)           Manager shall

collect clonal family data on trees to be planted (when available) and record

the information within the stand level data system as part of the standard

planting information process.




(w)          Manager shall provide

and maintain a Forest Inventory System and a Forest Mapping System (including

GIS) for Client, which shall include the parameters set forth in Exhibits 2D

and 2E, respectively.




 




2





























 




Existing Section 2.02(e) is amended by continuing the last sentence

thereof as follows: “and a forest suppression plan; said plans to be updated

annually by May 31.”




Existing Section 2.02(f) is amended by adding the following at the end

thereof: “Manager shall further assist Client and its representatives in

resolving legal parcel problems and other land use problems.”




Existing Section 2.02(m) is amended by deleting the first sentence

thereof and inserting the following in its stead: “Manager shall be responsible

for performing all usual and customary timberland management functions,

including but not limited to negotiating terms of and preparing all easements,

licenses and other land use agreements on forms pre-approved by Client.”




9.             Insurance.  Effective

January 1, 2001, Section 5.01 of the Master Agreement shall be amended as

follows:




•             In

subsection (a)(i) delete the two references to “$500,000” and insert in their

stead “$2,000,000.”




•             Add

the following sentence at the end of subsections (a)(i) and (ii) and (b)(i):




“Such policy shall name

Client, its subsidiary companies and the owner of each property that is subject

to this Master Agreement as an Additional Insured.”




•             Add

the following phrase after the word “emergency” in subsection (b): “(provided, however,

that Manager shall immediately notify Client of each such waiver).”




•             In

subsection (b)(i) delete the reference to “$500,000” and insert “$1,000,000” in

its stead.




10.          Use of Name: Press Releases.  Effective

immediately the Master Agreement is amended by including the following

provision:




“Section

11.  Use of Name: Press Releases:  Not less than five (5) business days prior

to distributing any press release, sales or marketing literature or other

written material to unaffiliated third parties, which refers to the other party

or any of its affiliates by name, or that make reference to or representations

about the nature of the relationship in which the parties are engaged, Manager

or Client (as the case may be) shall furnish the other party with a copy of

such materials and shall refrain from distribution thereof if the other party

reasonably objects in writing within five (5) business days of its receipt

thereof.  Each party agrees to cooperate




 




 




3





























 




with the other to facilitate any desired press release or other written

communication, to promptly review any suggested material (or the pertinent

provisions thereof which refer to such party), to generally permit the use of

its name by the other party in any factually accurate description of this

Master Agreement, and to not unreasonably object to the manner in which its

name may be used.  Each party also

acknowledges that communications to Plans and Endowments (and their advisors

and consultants) that are invested in Ultimate Client Portfolios will be made

periodically and will necessarily disclose the existence of this Master

Agreement, identify and refer to the parties by name, and each party agrees

that the use of its name in such communications need not be approved.  Similarly, each party acknowledges that

communications required by the Securities and Exchange Commission will be made

periodically, and may disclose the existence of this Master Agreement, identify

and refer to the parties by name, and each party agrees that the use of its

name in such communications need not be approved.”




11.          Miscellaneous.  This Amendment and

all exhibits and schedules hereto constitute an integral part of the Master

Agreement.  Except as expressly amended

by this Amendment, the Master Agreement shall remain in full force and effect.




IN WITNESS WHEREOF, the parties hereto have executed this Amendment by

and through their properly authorized officers on the date first specified

above.




	

  CLIENT:


  	

   


  	

   


  	

  MANAGER:


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  HANCOCK

  NATURAL RESOURCE


  GROUP, INC., a Delaware corporation


  	

   


  	

  ORM

  RESOURCES CANADA LTD.,


  a British Columbia corporation


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

  DNL


  
	

  By:


  	

  [Confidential Treatment for the omitted material has been

  requested and has been filed separately with the Securities and Exchange

  Commission]


  	

   


  	

  By:


  	

  /s/ Allen E. Symington


  
	

   


  	

  [Confidential Treatment for the omitted material has been

  requested and has been filed separately with the Securities and Exchange

  Commission]


  	

   


  	

   


  	

  Allen

  E. Symington


  Chairman and Chief Executive Officer


  
	

   


  	

  Senior

  Vice President


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
							





4





























 




EXHIBIT A


TO FIFTH AMENDMENT




List of Amendments

to Master Agreement




Amendments

to Master Agreement




1.             Consent to Assignment of Master

Timber Management Agreement dated December 29, 1998




2.             Amendment dated December 29,

1998




3.             Second Amendment dated July 26,

1999




4.             Third Amendment dated August 6,

1999




5.             Fourth Amendment dated December 23,

1999




 




Work

Authorizations




1.             Number OPA C0001 dated January 17,

2000




2.             Number OPA C0002 dated April 3,

2000




 




5





























 




EXHIBIT 1B


TO FIFTH AMENDMENT


DECISION MAKING AND SIGNING AUTHORITY


Canadian Properties




	

  CATEGORY


  	

   


  	

  MANAGER’S

  AUTHORITY ($US)


  
	

  1.


  	

  Timber sales contracts


  stumpage and log sales including salvage and miscellaneous forest products


  	

   


  	

  [Confidential Treatment for the omitted material contained

  in the entire column has been requested and has been filed separately with

  the Securities and Exchange Commission]


  
	

  2.


  	

  Logging

  and trucking contracts


  	

   


  	

   


  
	

  3.


  	

  Land Use permits


  i.e., road use, rock/gravel/leases, regulatory permits, licenses (inc.

  hunting), ferns, oil and gas, etc.


  	

   


  	

   


  
	

  4.


  	

  Budgeted Capital

  Expenses


  contracts and checks, i.e., site prep, planting, herbicide, PCT, logging

  roads, etc.


  	

   


  	

   


  
	

  5.


  	

  Budgeted Operating

  Expenses


  checks; except management fees


  	

   


  	

   


  
	

  6.


  	

  Budgeted Operating

  Expenses


  checks; management fees


  	

   


  	

   


  
	

  7.


  	

  All

  legal invoices


  	

   


  	

   


  
	

  8.


  	

  Disposition of

  properties — with


  HNRIC/COF approval closing costs; expenses; manager’s compensation; P&S

  contracts and closing documents


  	

   


  	

   


  





 




 




6





























 




All

Client contracts to be signed by authorized preparer and a minimum of two

authorized individuals up to respective limits of their signing authority.




 




Manager — to provide and update list of its authorized

individuals periodically.




	

  Authorized

  HNRGI Associates:


  	

   


  	

  Chief

  Operations Officer


  
	

   


  	

   


  	

  Director

  of Forest Operations & Stewardship


  
	

   


  	

   


  	

  Northwest

  Regional Manager


  
	

   


  	

   


  	

  Northwest

  Regional Foresters


  





Decision-making

authority:




	

   


  	

  •


  	

   


  	

  Budget

  approval must be made by the HNRGI Northwest Regional Manager and Director of

  Forest Operations & Stewardship,;


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  •


  	

   


  	

  Dispositions

  require approval of Hancock Natural Resource Investment Committee and JHLICo

  Committee of Finance; except that dispositions under [Confidential Treatment for the omitted material has

  been requested and has been filed separately with the Securities and Exchange

  Commission] must be approved by (i) a Regional Forest Manager or

  Director of Forest Operations & Stewardship, and


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  •


  	

   


  	

  All

  recorded instruments (including deeds) to be signed by authorized officers of

  JHLICo, John Hancock Timber Resource Corp., HNRGI or other legal owner,

  respectively.


  





 




7





























 




Exhibit 1A


To Fifth Amendment


Property Management Service Fee


Canadian Properties /Canadian Dollars




	

  Property


  	

   


  	

  Acreage

  Forecast 


  (as of 10/31/00)


  	

   


  	

  Base

  Rate 


  CDN$/Acre Fee


  
	

  Lake Cowichan


  	

   


  	

  32,302


  	

   


  	

  [Confidential Treatment for the

  omitted material contained in the entire column has been requested and has

  been filed separately with the Securities and Exchange Commission]


  
	

  Comox


  	

   


  	

  28,639


  	

   


  	

   


  
	

  Total


  	

   


  	

  60,941


  	

   


  	

   


  





 




 




8





























 




EXHIBIT 2A


TO FIFTH AMENDMENT




Real Estate Sales

Contract




1.             Contract

of Purchase and Sale — British Columbia




2.             Contract

of Purchase and Sale — Comox Timber LTD.




 




9





























 




EXHIBIT 2D


TO FIFTH AMENDMENT




Computerized

Mapping System Requirements




The computerized mapping system shall be a system that is reasonable

and customary for the mapping and spatial analysis of large forest land bases

in the Pacific Northwest.  Such a system

will provide, but not necessarily be limited to the following:




Collection of data using GPS units.




Downloading data from GPS units to the mapping system.




Collection of data from heads-up digitizing, digitizing pads and

scanners.




Importing map and other spatial data from external public and private

sources using common data transfer formats.




Editing and maintenance functions for the spatial databases.




Links to attribute data

stored in resource attribute databases (such as forest inventory), creating the

ability to analyze 


data by spatial characteristics with the capability to link to a harvest

scheduling system.




Automated standard map making processes.




Processes for creating custom maps.




Processes for making standard and ad hoc queries of the spatial

databases.




Automated backups of the spatial databases.




Downloading the spatial data into one or more standard export formats.




Downloading any attribute (non-spatial) data into standard ASCII

tables.




 




10





























 




EXHIBIT 2E


TO FIFTH AMENDMENT




Forest Inventory

System Requirements




The computerized inventory system shall be a system that is reasonable

and customary for the management of large forest inventories in the Pacific

Northwest.  Such a system will provide

but not necessarily be limited to the following:




Collection of data using field data recorders or cruise cards.




Downloading data from the field data recorders to the inventory system.




Entering, storing and maintaining plot data in the inventory databases.




Compilation of plot data for specified aggregations of plots.




Loading and storage of compiled cruise results into the forest inventory

databases as stand tables.




Processes for entering,

storing, editing and maintaining stand level characteristics such as site, age,

gross and net volumes, avg. DBH, stems per acres, and other pertinent

data.  Such data shall be in total by

stand, by species or other aggregation as appropriate.




Processes for updating of inventory information for annual growth by

stand and projecting such growth over time.




Processes for editing and maintenance functions for the various

inventory databases.




Obtaining stand areas from the computerized mapping system.




Processes for production of standard forest inventory reports.




Processes for development of standard and ad hoc queries of the

inventory databases.




Automated backups of the inventory databases.




Downloading the cruise and inventory data into standard ASCII tables.




 




11





























 




EXHIBIT B


TO FIFTH AMENDMENT


Rate Schedule for Additional Services




Time will be billed at the following rates:




	

  Position

  Category


  	

   


  	

  Billing

  Rate (CDN$/hour)


  
	

  Clerk


  	

   


  	

  [Confidential Treatment for the

  omitted material contained in the entire column has been requested and has

  been filed separately with the Securities and Exchange Commission]


  
	

  Administrative Assistant


  	

   


  	

   


  
	

  Technician


  	

   


  	

   


  
	

  Forester/Analyst I


  	

   


  	

   


  
	

  Forester/Analyst II


  	

   


  	

   


  
	

  Senior Forester/Analyst III


  	

   


  	

   


  
	

  Manager/Area Manager


  	

   


  	

   


  
	

  Director/Region Manager


  	

   


  	

   


  
	

  Executive


  	

   


  	

   


  





 




Expenses will be billed as follows:




Mileage                                  CDN

[Confidential Treatment for the omitted

material has been requested and has been filed separately with the Securities

and Exchange Commission] / mile




Materials and Services        [Confidential Treatment for the omitted material has

been requested and has been filed separately with the Securities and Exchange

Commission]  times actual cost




 




12





























 




EXHIBIT 3B


TO FIFTH AMENDMENT


DISPOSITION AND ACQUISITION TIME AND MATERIALS FEES




	

  Position

  Category


  	

   


  	

  Billing

  Rate  (CDN$/Hour)


  
	

  Clerk


  	

   


  	

  [Confidential Treatment for the

  omitted material contained in the entire column has been requested and has

  been filed separately with the Securities and Exchange Commission]


  
	

  Administrative Assistant


  	

   


  	

   


  
	

  Technician


  	

   


  	

   


  
	

  Forester/Analyst I


  	

   


  	

   


  
	

  Forester/Analyst II


  	

   


  	

   


  
	

  Senior Forester/Analyst


  	

   


  	

   


  
	

  Manager/Area Manager


  	

   


  	

   


  
	

  Director/Region Manager


  	

   


  	

   


  
	

  Executive


  	

   


  	

   


  





 




Markup to Cost of

Materials and Services      [Confidential Treatment for the omitted material has

been requested and has been filed separately with the Securities and Exchange

Commission]  




(Note: Services meaning and intending to refer to services

contracted to others by Manager.)




Mileage charges                                               CDN

[Confidential Treatment for the omitted

material has been requested and
  has been filed separately with the

Securities and Exchange Commission]




*Rates listed are for typical classifications of

positions that will be used for disposition and acquisition services.  Other job classifications may be used with

prior written agreement between Manager and Client.




 




13