Document:

TITLE

Exhibit 10.12

 

AMENDMENT TO

MASTER TIMBER MANAGEMENT

AGREEMENT

 

THIS

AMENDMENT TO MASTER TIMBER MANAGEMENT AGREEMENT

(“Amendment”) is made and entered into on December 29, 1998, by and

between ORM

RESOURCES CANADA LTD., a British Columbia company (“ORM”) and HANCOCK

NATURAL RESOURCE GROUP, INC. (“HNRG”), to amend that certain Master

Timber Management Agreement dated December 5, 1997 originally between HNRG

and H.A. Simons, Ltd. (“Simons”) (“Master Agreement”).  The effective date of this Amendment shall

be January 1, 1999 (“Effective Date”). 

Pursuant to an Assignment and Assumption Agreement, a copy of which is

attached hereto as Exhibit 1, and with consent of HNRG, Simons assigned,

and ORM assumed, all rights, obligations, benefits and privileges of Simons

under the Master Agreement accruing on or after the Effective Date.  For good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, ORM and HNRG hereby

agree as follows

 

1.             Non Compete Provisions.  Subsection 4.02, Non Compete,

of the Master Agreement shall be replaced in its entirety by the following

provisions:

 

4.02  Non Compete.  So long as this Master Agreement shall

remain in effect, Manager agrees that neither Manager nor its affiliates will

compete with Client by (a) performing, offering to perform or soliciting

timberland portfolio investment services for Plans and Endowments investing in

timberlands within the Continental United States or Canada; (b) soliciting

or attempting to raise timberland investment capital from Plans and Endowments

for timberland investments within the Continental United States or Canada; or

(c) managing timberland properties in the Continental United States or

Canada owned or managed for Plans and Endowments.  In addition, recognizing Client’s need to protect its legitimate

business interests, and as a further inducement to Client to continue to enter

into this Master Agreement, Manager hereby covenants and agrees with Client

that during the term of this Master Agreement, Manager will not, directly or

indirectly, for itself or any other person, business or entity:  (x) have any ownership interest in any

Competing Business (other than passive ownership of publicly-traded securities

constituting less than a 1% interest), provided that Manager’s continuing

ownership of any ownership interest in an entity that was not a Competing

Business when such investment was made, but subsequently becomes a Competing

Business as a result of a sale of an interest therein to a Plan or Endowment by

a person or entity not controlled by Manager, shall not constitute a breach of

this clause (x) as long as Manager neither manages or operates such

entity, nor owns more than 5% of the entity from and after the date that it

becomes a Competing Business, unless otherwise agreed in writing by Client; or

(y) attempt to employ or recruit, or assist any other person or entity in

employing or recruiting, for or on behalf of any Competing Business, any

employee who is employed by Client.

 

 

Manager

represents and warrants that neither it nor any of its affiliates presently

conducts any of the activities described in clauses (a), (b), (c) or (x)

of this Section 4.02, except insofar as the units of interest in Pope

Resources, A Delaware Limited Partnership (“Pope”) are publicly traded.  Pope and Manager or its other affiliates may

be deemed to provide timberland portfolio investment services for, or to manage

timberlands beneficially owned by, Plans or Endowments that purchase such, units.  Notwithstanding the foregoing, Manager

covenants and agrees that, so long as this Master Agreement shall remain in

effect, neither Manager nor any of its affiliates will issue any new interests

that are publicly traded in the United States which constitute an interest in

any entity that owns or manages timberlands located in the Continental United

States of Canada; except for the issuance of new interests in conjunction with

any option, incentive or compensation programs of Manager or its affiliates for

the benefit of its officers, directors, employees, or agents.  Nothing in this Section 4.02 shall be

deemed to apply to the issued units of Pope existing as of the effective date

of this Master Agreement.

 

For

purposes of this Section 4.02, “affiliate” shall mean any person or entity

(whether now existing or hereafter created) that is controlled by, in control

of, or under common control with Manager, and shall in any event include Pope.

 

Notwithstanding

any other provision of this Section 4.02, it is understood and agreed that

nothing herein shall prohibit Manager or its affiliates from advertising,

soliciting, marketing for sale, or selling or conveying any timberland or other

property now or hereafter owned by Manager or its affiliates to a Plan or

Endowment, provided that neither Manager nor its affiliates shall provide

management services for any timberland conveyed to such Plan or Endowment after

closing.  In conjunction with any such

sale, an affiliate of Manager may create or cause to be created a publicly

traded vehicle to facilitate the sale.

 

The

provisions of this Section 4.02 shall survive termination of this Master

Agreement for a period of (i) twenty-four calendar months with respect to

each Plan and Endowment that is invested in an Ultimate Client Portfolio

managed by Client and (ii) twelve calendar months with respect to any

other Plan or Endowment.

 

Manager

and Client hereby expressly agree that damages may not compensate Client

adequately for a breach of this `Section 4.02, and acknowledge that absent

this Section 4.02 Client would not have entered into this Master

Agreement.  Therefore, to the maximum

extend permitted by law, upon establishment of a breach of this

Section 4.02, the parties hereby specifically agree that Client shall be entitled

to specific performance of the provisions of this Section 4.02, and in the

event that Client brings any action for specific performance of this

Section 4.02 Manager waives any objection or right to object to the

suitability or availability of specific performance as a remedy for breach of

this Section 4.02, including without limitation any objection based on the

adequacy of damages or the irreparable nature of the injury claimed by

Client.  The foregoing, however,

 

2

 

shall

not be deemed to constitute a waiver by Manager of its right to participate in

the litigation, to dispute whether a breach of this Section 4.02 occurred

or whether the scope of the equitable relief requested by Client is appropriate

and consistent with the strict enforcement of the provisions of this

Section 4.02.

 

For

purposes of this Section 4.02 the following terms shall have the

corresponding meanings ascribed below:

 

“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 United States or Canadian law primarily or exclusively for

the benefit of persons living within those jurisdictions.

 

“Competing

Business” means any business that acquires, owns and/or manages timberlands

within the Continental United States or Canada primarily or exclusively for the

benefit of Plans and Endowments.

 

“Ultimate

Client Portfolio” means the several JMLICO separate accounts and other entities

described in the first WHEREAS clause above, for which Client provides

timberland portfolio investment services.

 

2.             Notices.  Section 7, Notices,

is hereby amended to change the address of the Manager as follows:

 

	

  AS TO THE MANAGER:

  	

  ORM Resources Canada Ltd.

  
	

   

  	

  Suite 300

  
	

   

  	

  475 West Georgia Street

  
	

   

  	

  Vancouver, B.C. Canada V6B 4M9

  
	

   

  	

  Attention: 

  Charles Goodbrand

  
	

   

  	

   

  
	

  AND TO:

  	

  Olympic Resource Management LLC

  
	

   

  	

  19245 Tenth Avenue NE

  
	

   

  	

  Post Office Box 1780

  
	

   

  	

  Poulsbo, Washington 98370

  
	

   

  	

  Attention: 

  Thomas Gilkey

  

 

3.             Additional Terms

and Conditions.

 

3.1          Bank

Accounts and Signatories.  Bank accounts have been established as set

forth in Section 1.05, Income and Expenses; Bank Accounts, of the Master

Agreement.  Prior to the Effective Date,

ORM shall designate, subject to HNRG approval, appropriate individuals for

signatories on HNRG bank accounts.

 

3.2          Insurance

and Bonding.  Prior to the Effective Date, ORM shall

provide evidence satisfactory to HNRG that ORM is maintaining the insurance

required of the Manager under Section 5.01 of the Master Agreement

including, but not necessarily limited to, commercial general liability

insurance, automobile liability insurance, worker’s compensation liability

coverage and fidelity bond.

 

3

 

4.             Miscellaneous.

 

4.1          Notice.  All notices to be provided hereunder shall

be provided in accordance with the notice procedures contained in the Master

Agreement.

 

4.2          Governing Law/Venue.  This Agreement shall be governed in all

respects, including as to validity, interpretation and effect, by the laws of

the Commonwealth of Massachusetts.

 

4.3          Miscellaneous.  Except as

specifically amended, all terms and conditions of the Master Agreement shall

remain in full force and effect.

 

4.4          Counterparts.  This Agreement may

be executed in counterparts, each of which shall be deemed an original and both

of which together shall constitute one and the same instrument.

 

IN

WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the

date first written above.

 

	

  HANCOCK NATURAL

  RESOURCE

  	

  ORM RESOURCES CANADA

  LTD.

  
	

  GROUP, INC.

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By

  	

  /s/

  Unreadable

  	

   

  	

  By

  	

  /s/

  Thomas M. Ringo

  	

   

  
	

   

  	

  Its

  	

    Vice President

  	

   

  	

   

  	

  Thomas Ringo

  
	

   

  	

   

  	

   

  	

  Its Treasurer

  
							

 

4SECOND AMENDMENT TO MASTER TIMBER MANAGEMENT AGREEMENT

Exhibit

10.13

 

SECOND

AMENDMENT TO

MASTER TIMBER MANAGEMENT AGREEMENT

 

(Canada Operations)

 

THIS SECOND AMENDMENT (the “Amendment”) is dated as of the 26th day of

July, 1999, 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 in the Master

Timber Management Agreement dated as of December 5, 1997 and effective as of

January 1, 1998 by and between Client and H.A. Simons Ltd. (“Simons”) (as

amended, the “Master Agreement”).

WHEREAS, Client and Simons were parties to the Master Agreement.

WHEREAS, as of January 1, 1999, Manager acquired certain assets of

Simons Reid Collins, the forestry management division of Simons.

WHEREAS, in connection with the acquisition of assets by Manager,

Manager and Simons entered into that certain Assignment and Assumption

Agreement dated as of December 29, 1998 (the “Assignment Agreement”),

whereby Manager was assigned and assumed certain rights and obligations of

Simons under the Master Agreement. 

Client gave its consent thereto pursuant to that certain Consent to

Assignment of Master Timber Management Agreement dated as of December 29,

1998.  In addition, Manager and Client

entered into that certain Amendment to Master Timber Management Agreement dated

as of December 29, 1998 and intended to be effective as of January 1, 1999.

WHEREAS, the parties wish to further amend the Master Agreement with

respect to matters from and after January 1, 1999, all as set forth herein.

NOW, THEREFORE, the parties agree as follows:

1.             Decision

Making and Signing Authority. 

Exhibit 1B of the Master Agreement is hereby replaced by Exhibit

1B to this Amendment.  This

replacement is effective as of January 1, 1999.

2.             Additional

Services.  Pursuant to

Section 1.03 of the Master Agreement, Client may from time to time engage

Manager to directly provide certain additional services including the services

described in said section (the “Additional Services”).  With respect to the Additional Services, the

parties agree to the following procedures:

a.             The scope of

Additional Services shall be set forth in a Work Authorization in form attached

hereto as Exhibit A and incorporated herein by reference (“Work

Authorization”).  Rates charged for

Additional Services shall be at an employee hourly base rate (employee hourly

base rate is annual salary before bonus, expressed as an hourly rate) times [Confidential Treatment for the omitted material has

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

Commission]

1

 

 to equal the billable hourly rate.  The cost of materials will be billed at cost.  The mileage will be billed at [Confidential Treatment for the omitted material has

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

Commission] rats per mile (CDN). 

The rates shall apply, without change, for the term of the Master

Agreement unless otherwise specifically provided in this Master Agreement or

the Work Authorization.  All requests

for Additional Services shall be accompanied by a completed and executed Work

Authorization.  Upon execution by both

parties, each Work Authorization shall be deemed incorporated herein by

reference.

b.             Payment for

Additional Services and expenses shall be in accordance with the applicable

Work Authorization and this Master Agreement.

c.             Manager will

be reimbursed by Client for reasonable travel expenses incurred directly in

connection with the performance of Additional Services only to the extent that

all such travel expenses have been approved in advance by Client or the travel

expenses are provided for in the Work Authorization.  Manager will be reimbursed by Client for reasonable miscellaneous

other expenses incurred directly in connection with the performance of

Additional Services only to the extent that such expenses are provided for in

the Work Authorization.  Manager shall

provide Client with a detailed monthly statement of travel and miscellaneous

expenses incurred.

d.             Manager, in

performing the Additional Services, shall act solely as an independent

contractor.  Manager, and any employees

or agents of Manager, shall under no circumstances be treated as, or deemed to

be, employees of Client.  Nothing in the

Master Agreement shall be construed to create a partnership, agency, joint

venture or employer-employee relationship between the parties.  Manager understands that Client has no

federal, provincial, or local obligations regarding employee liability or

insurance for Manager.

e.             Manager

shall be responsible for and pay all costs associated with Governmental

compliance of its business, including, but not limited to, city, provincial, or

federal licenses, permits, taxes or assessments of any kind.  Manager shall be responsible for payment of

its income taxes, employment taxes, employee withholding taxes and workers’

compensation premiums.  Manager shall

indemnify Client and hold it harmless from paying such business costs or taxes.

f.              In the event

that rendition of the Additional Services provided for herein requires Manager

to be located at facilities of Client, Manager shall comply with all applicable

federal or state or provincial laws and regulatory requirements and all safety

and health regulations prescribed by Client for its own personnel.  Manager shall comply with all applicable

federal, state, provincial, and local laws and regulations with regard to the

services rendered hereunder.

g.             The

provision of the Additional Services shall be subject to all of the terms and

conditions of the Master Agreement, unless otherwise specifically provided in

the Work Authorization.

 

2

 

3.             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.

  	

   

  	

  ORM RESOURCES CANADA LTD.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ (Unreadable)

  	

   

  	

  By:

  	

  /s/ Gary F. Tucker

  
	

  Its: 

  	

  Vice President

  	

   

  	

  Its:

  	

   President

  & CEO

  

 

 

3

 

EXHIBIT 1B

TO SECOND AMENDMENT

DECISION MAKING AND SIGNING AUTHORITY

 

 

	

   

  	

   

  	

  CATEGORY

  	

   

  	

  MANAGER’S AUTHORITY ($CDN)

  
	

  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

  	

   

  	

   

  

 

4

 

	

   

  	

   

  	

  CATEGORY

  	

   

  	

  MANAGER’S AUTHORITY ($CDN)

  
	

  7.

  	

   

  	

  All legal invoices

  	

   

  	

  [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]

  
	

  8.

  	

   

  	

  Acquisition of

  properties — with

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

  contracts and closing documents

  	

   

  	

   

  
	

  9.

  	

   

  	

  Disposition of

  properties — with 

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

  contracts and closing documents

  	

   

  	

   

  

 

All Hancock 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:                                                                                                                         Director of Acquisitions

Manager of Acquisitions

Director of Forestry Operations & Stewardship

Regional Forestry Managers

Regional Foresters

CalPERS Forest Operations Manager

CalPERS CIO

Managing Director

 

Decision–making

authority:

 

•                  Budget approval must be made by the HNRGI

(i) Regional Forestry Manager and Director of Forestry Operations &

Stewardship, or (ii) CalPERS Operations Manager and CalPERS CIO;

•                  Acquisitions and Dispositions require

approval of Hancock Natural Resource Investment Committee and JHMLICo 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 Forestry

Manager or Director of Forestry Operations & Stewardship, or (ii) CalPERS

Operations Manager or CalPERS CIO; and

•                  All recorded instruments (including

deeds) to be signed by authorized officers of JHMLICo, John Hancock Timber

Resource Corp., or other legal owner, respectively.

 

5

 

EXHIBIT A

TO FIRST AMENDMENT

FORM OF WORK AUTHORIZATION

 

Work Authorization Number                    

 

 

1.                                      Master Agreement.  This Work

Authorization Number           is issued pursuant to the Master Timber

Management Agreement dated as of December 5, 1997 and effective as of January

1, 1998 by and between Client and H.A. Simons (as amended, the “Master

Agreement”).  Capitalized terms not

otherwise defined herein have the meanings given in the Master Agreement.

2.                                      Effective Date.  This Work

Authorization is effective upon execution by both parties.

3.                                      Reference Title for Services Under This Work Authorization. 

The reference title for Services under this Work Authorization is                          .

4.                                      Services to be Performed.  This Work

Authorization relates to the work more fully described below:

5.                                      Deliverables and Schedule of Performance.

6.                                      Compensation for Services.

7.                                      Acceptance Criteria.

8.                                      Changes.  Any amendment or modification

of this Work Authorization shall be agreed to in writing by both parties

(“Change Order”).

9.                                      Client Representatives.  The

representatives of the Client who shall have full authority to

request the Additional Services to be provided [and to terminate such

Additional Services] are                 

or any other person designated in writing by the Client.

 

6

 

10.                               Manager

Representatives.  The representatives of the Manager who shall

have full authority to negotiate and execute Change Orders are                         , or any other person

designated in writing by Manager.

	

  AGREED TO AND ACCEPTED BY:    

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Client:

  	

   

  	

  Manager  

  
	

   

  	

   

  	

   

  
	

  Hancock Natural Resource Group, Inc. 

  	

   

  	

  ORM Resources Canada Ltd.

  
	

  99 High Street, 26th Floor 

  	

   

  	

  475 West Georgia Street, Suite 300

  
	

  Boston, MA 02110  

  

  	

   

  	

  Vancouver, BC V6B 4M9

  
	

   

  	

   

  	

  Canada

  
	

   

  	

   

  	

   

  
	

  By

  	

   

  	

   

  	

  By

  	

   

  
	

  Its

  	

   

  	

   

  	

  Its

  	

   

  
							

 

7

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