DRAFT Contract for the Right to Salvage Logging Residues

Transcription

1 DRAFT Contract for the Right to Salvage Logging Residues THIS AGREEMENT made effective as of September, 2016, by and between QUAYANNA DEVELOPMENT CORPORATION (hereafter QDC) of Middle Bay Drive, Kodiak Alaska and the KODIAK ISLAND BOROUGH (hereafter LANDOWNER) of 710 Mill Bay Road, Kodiak, Alaska WHEREAS: LANDOWNER has sold 729 acres of fire killed timber to A-1 Timber Consultants at Cape Chiniak. The Twin Creeks Fire Salvage Sale will generate a significant amount of logging residues in the form of non-merchantable tree tops, cull logs, undersize logs, and tree limbs. Subject logging residues displace seedling planting areas and also provide habitat for rodents and other animal species that damage or kill spruce seedlings. Subject logging residues are suitable for wood chip and stick firewood production that can be locally consumed to the benefit of the Kodiak community. QDC has experience in providing goods and services in forestry and woody biomass utilization and desires to salvage of certain logging residues from LANDOWNER based on this background. LANDOWNER desires to have such services provided by QDC. THEREFORE, the parties agree as follows: 1. DESCRIPTION OF SERVICES. Beginning on September, 2016, and ending on December 31, 2020, QDC will have the right, but not the obligation to annually harvest and process stick firewood, wood chips, and wood grindings from logging residues resulting from the logging operations related to the Twin Creeks Fire Salvage Sale LANDOWNER has awarded to A-1 Timber Consultants. 2. DESCRIPTION OF WOOD SOURCE. Firewood and wood chips/grindings will be produced from logging residues that are a byproduct of commercial timber operations on LANDOWNER lands at or near Cape Chiniak. These residues consist of non-export quality log pieces, limbs, and tree tops that have been stacked alongside logging roads. These stacks are largely generally free of dirt and non-woody debris and are the targeted source of woody materials. Collection of logging residues other than these stacks of woody residue is not contemplated or required under this agreement.

2 LANDOWNER makes no representation as to the quality of the wood source and is not responsible for its condition. QDC accepts the wood sources for firewood/wood chips/grindings material as is, insitu. The logging residues will degrade over time and are expected to be of little or no use for producing wood chips or stick firewood after 3 or 4 years following harvest. 3. INTENT OF HARVEST VOLUMES. QDC and LANDOWNER mutually understand that the volume of firewood and wood chips harvested at any time under this agreement is dependent on the demand for such products. Harvest volumes are expected to increase as demand for wood chips and stick firewood increase. It is QDC s intention to use the commitment of logging residues in this agreement to install and operate a small wood pellet and briquetting mill on Kodiak Island, thereby increasing the utilization for the residues. Accordingly, QDC intends to salvage logging residues for as long as the logging residues are suitable for wood chip and stick firewood purposes. QDC estimates that with the successful implementation of a wood pellet/briquette mill approximately 5,000 to 10,000 dry tons of logging residues will be salvaged from the Twin Creeks Fire Salvage Sale over the next 3 years. This represents less than approximately one third of the logging residues that are expected to be generated in the timber sale. 4. TIMING OF LOGGING RESIDUE HARVEST AND STORAGE. Firewood, wood chipping, and grinding operations will generally occur between the months of April and October, with the majority of operations occurring between June and September. Some need to inventory wood chips and grindings within the boundaries of the Twin Creeks Fire Salvage Sale area is anticipated so they can be further processed during the winter months. Temporary storage of up to 5,000 cubic yards (approximately 500 dry tons) will occur in form of wood chip piles in vacated rock pits and spur roads. Specific location for these activities will be determined on an as needed basis, and is specifically granted under the authority of this agreement. 5. COOPERATING WITH A-1 TIMBER. QDC will cooperate with A-1 Timber logging activities in a manner that does not interfere with their operations. QDC will secure a letter of non-objection from A-1 Timber for QDC to conduct logging residue salvage activities prior to commencing operations. QDC and A-1 Timber will work out details regarding specific operational details to each other s mutual benefit and satisfaction. 6. OPERATIONAL PLANS AFTER THE TWIN CREEKS FIRE SALVAGE SALE IS COMPLETE. The logging residue salvage efforts will continue for several years after the termination of the Fire Salvage Sale. In the event that further Detailed

3 Plans of Operations are needed beyond those activities described in the Fire Salvage Sale, QDC will provide the necessary DPO documents to comply with the Alaska Forest Practices Act for the duration of this agreement at no cost to the LANDOWNER. 7. PAYMENT. The payment fee structure will be as follows: QDC agrees to pay LANDOWNER a fee of $2,500 per calendar year for the right to salvage logging residues within the Twin Creeks Fire Salvage Sale area beginning on January 1, PERFORMANCE OF SERVICES. The manner in which the Services are to be performed and the specific hours to be worked by QDC shall be determined by QDC. All Services performed on LANDOWNER lands shall be performed to the standards of the industry. 9. TERM/TERMINATION. This Agreement shall be in effect beginning September, 2016 and will terminate automatically on December 31, This agreement may be terminated sooner prior to the termination date by either party upon a material breach or default by the other party. 10. EMPLOYEES. QDC s employees, if any, who perform services for LANDOWNER under this Agreement shall also be bound by the provisions of this Agreement. At the request of LANDOWNER, QDC shall provide adequate evidence that such persons are QDC's employees. 11. INSURANCE: QDC shall carry, for the duration of this contract, General Liability Insurance covering all business premises and operations used by QDC in the performance of services under this agreement with minimum coverage limits of $1,000,000 combined single limit per occurrence, Workman s Compensation Insurance in accordance with statutory requirements, and Automobile Liability Insurance covering all vehicles used by QDC in the performance of services under this contract with minimum coverage limits of $1,000,000 combined single limit per occurrence. LANDOWNER will be listed as additional insured with waiver of subrogation for the duration of this contract. Further the insurance policy will provide for the notification of LANDOWNER thirty (30) days in advance of termination or cancellation of the insurance policy. LANDOWNER will be provided a certificate of insurance at the beginning of the policy and annually each year thereafter that the insurance is in force. LANDOWNER will be provided a copy showing the above insurance coverage prior to QDC beginning work under the terms of this Agreement.

4 12. STATUS OF PARTIES/INDEMNIFICATION. LANDOWNER will hold QDC alone responsible for compliance with the terms and provisions of this contract. Although LANDOWNER shall have no control over QDC, those in the employ or working under QDC, or the equipment they use, or the manner by which QDC conducts their operations, LANDOWNER, nevertheless shall have the right to check QDC s operations for the sole purpose of determining whether same are being conducted in accordance with the terms and provisions hereof. When it is found that such operations are not being conducted in accordance with the terms and provision hereof, LANDOWNER shall notify QDC and request that such operations be so conducted. Upon LANDOWNER making such request, QDC agrees to immediately correct such operations to comply with the terms and provisions herein. A relationship of employeremployee or master and servant is NOT intended nor shall it be construed, to exist between LANDOWNER and QDC. QDC shall select and pay his own employees, subcontractors and/or suppliers and neither QDC nor it s employees, subcontractors or suppliers shall be subject to any order, supervision or control of LANDOWNER. LANDOWNER shall in no way be liable for any personal injuries (including death) or property damage caused by, resulting from, or attributable to, the operations of QDC under this agreement and QDC shall protect, defend, indemnify and hold LANDOWNER, its affiliates, their agents, officers, directors, employees, successors and assignees harmless from and against: a) Any claim, demand, cause of action, lawsuit, damages, loss or liability (including attorney fees, expert witness fees, court costs, of every kind and character), arising out of or during work performed hereunder, without limits and without regard to the cause or causes thereof or the negligence, fault or strict liability of any party, including that of LANDOWNER, its affiliates, and their agents, officers, directors, employees, successors and assignees resulting from bodily or mental injury, death or damage to property, including loss of use of property and; b) All liens and other encumbrances against the premises or amount of debts or claims alleged to be due from QDC to any person, including subcontractors, suppliers and employees or agents of QDC. 13. COMPLIANCE WITH LAWS. QDC shall (a) comply with all State and Federal laws, rules, and regulations applicable to persons employing labor or operating equipment, and particularly the State Workmen s Compensation Law, The Federal and State Employment Security Acts, the Social Security Act, and all applicable provisions of the Fair Labor Standards Act of 1938, as amended; (b) keep accurate records in compliance with such laws, and upon request, submit such records to LANDOWNER for its inspection. Failure of QDC to comply with all such applicable State and Federal laws and regulations shall be cause for immediate cancellation of this contract by LANDOWNER.

5 14. ASSIGNMENT. QDC's obligations under this Agreement may not be assigned or transferred to any other person, firm, or corporation without the prior written consent of LANDOWNER. 15. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person or deposited in the United States mail, postage prepaid, addressed as follows: QDC: Mr. Peter J. Olsen, President Quayanna Development Corporation Middle Bay Drive Kodiak, Alaska LANDOWNER: Mr. Michael Powers, Borough Manager Kodiak Island Borough 710 Mill Bay Road, Room 125 Kodiak, Alaska Such address may be changed from time to time by either party by providing written notice to the other in the manner set forth above. 16. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties. 17. AMENDMENT. This Agreement may be modified or amended if the amendment is made in writing and is signed by both parties. 18. SEVERABILITY. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited. 19. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that

6 party's right to subsequently enforce and compel strict compliance with every provision of this Agreement. 20. APPLICABLE LAW. The laws of the State of Alaska shall govern this Agreement. 21. LITIGATION. Any lawsuit on this Agreement or arising out of or related in any way to this Agreement shall be brought in Kodiak, Alaska, and the parties hereby waive any objections they may have now or in the future to venue of such lawsuit being located in Kodiak, Alaska. In the event either party shall bring any action or proceeding for damages for any alleged breach of any provision of this agreement, or to enforce, protect, or establish any right or remedy of any party, the prevailing party shall be entitled to recover as part of or incident of such action or proceeding all reasonable attorney's fees and costs incurred in the preparation and prosecution of such action or proceeding or any appeal there from. By: Quayanna Development Corporation Peter J. Olsen, President Kodiak Island Borough By: Michael Powers, Borough Manager