EXHIBIT 99.4
AGREEMENT RELATING TO ENFORCEMENT OF AB 1986
By and Among
THE CALIFORNIA RESOURCES AGENCY
THE CALIFORNIA DEPARTMENT OF FISH AND GAME
THE CALIFORNIA DEPARTMENT OF FORESTRY
THE CALIFORNIA WILDLIFE CONSERVATION BOARD
and
THE PACIFIC LUMBER COMPANY,
SCOTIA PACIFIC COMPANY LLC, AND
SALMON CREEK CORPORATION
FEBRUARY 25, 1999
AGREEMENT RELATING TO ENFORCEMENT OF AB 1986
This Agreement regarding the enforcement of the provisions of California
Assembly ▇▇▇▇ 1986, Chapter 615 of the Statutes of 1998 ("AB 1986") is entered
into as of the Effective Date of this Agreement by and among the State of
California, acting through the California Department of Fish and Game ("CDF"),
the California Department of Forestry and Fire Protection ("CDFG"), the
California Resources Agency, and the California Wildlife Conservation Board
("WCB") (collectively referred to as the "State of California" or the "State"),
on the one hand, and The Pacific Lumber Company ("PALCO"), Scotia Pacific
Company LLC, and Salmon Creek Corporation, their officers, directors, employees,
agents, contractors and sub-contractors, and their successors in interest,
assignees, or transferees of any transfer defined in Section 9, below,
collectively referred to as the "Company", on the other hand, in connection with
the grant of funds by the State of California to the United States of America
toward the purchase and permanent protection of redwood forest lands owned by
the Company and by the Elk River Timber
Company in Humboldt County, referred to and defined in AB 1986, hereafter
referred to as the "Headwaters Forest Preserve."
WHEREAS the State of California enacted legislation (AB 1986) appropriating
one hundred thirty million dollars ($130,000,000.00) toward the purchase of the
Headwaters Forest Preserve because it plays a pivotal role in preserving the old
growth redwood ecosystem in California; and WHEREAS the State of California
recognizes that the public benefits afforded by acquisition of fee title of
these lands are inextricably linked to future management of both the lands
subject to the Habitat Conservation Plan (HCP) as of the Effective Date of this
Agreement and all future lands which are subject to the HCP ("Lands" is defined
to include both types of lands) in such a manner as to afford protection to
threatened and endangered species and specified unlisted species found on the
Lands and on lands impacted by the management of the Lands; and
WHEREAS The Pacific Lumber Company, Scotia Pacific Company LLC, and Salmon
Creek Corporation are entering into a separate Implementation Agreement (the
"IA") with the United States of America and the State of California to ensure
implementation of the terms of the final HCP, which provides minimization and
mitigation measures for threatened and endangered species and specified unlisted
species in accordance with the standards set forth in the Federal and State
Endangered Species Acts for impacts of take of such species from specified
activities on the Lands; and
WHEREAS the State acknowledges that, as of the dates of their approval or
certification, the agreed-upon final HCP, IA, and permits to allow the
incidental take of threatened and endangered species, the drafts of which are
more fully described in the notice published in the Federal Register on July 7,
1998 incorporate, at minimum, all of the conditions set forth in Chapter 615,
Statutes of 1998 (AB 1986), in Section 3 thereof; and
WHEREAS the State of California intends to make its funds for acquisition
of the Headwaters Forest Preserve available through a direct grant to the United
States of America; and
WHEREAS, to implement AB 1986, the State of California requires, in a form
directly enforceable by the State, the Company's binding agreement to comply
with AB 1986; and
WHEREAS the State of California has indicated that it requires as a
condition of its grant of one hundred thirty million dollars ($130,000,000.00)
for the purchase of the Headwaters Forest Preserve,
that the additional benefits and protections of AB 1986 apply to the Company's
Lands; and
WHEREAS on February 27, 1998, Parties to this Agreement entered into an
agreement entitled "Pre-Permit Application Agreement in Principle" in which the
Company committed to apply for an Incidental Take Permit (ITP) and its
accompanying HCP, which were to have terms of 50 years; and WHEREAS the terms of
the incidental take permit, the HCP and the IA are 50 years and this agreement
shall apply to, and be enforced for, that term.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. GENERAL PROVISIONS.
1.1 Unless otherwise specifically defined in this Agreement, the parties
hereby adopt the definitions used in the IA for the final PALCO Habitat
Conservation Plan simultaneously being entered into by and among the United
States Fish and Wildlife Service, the National Marine Fisheries Service, the
California Department of Fish and Game, the California Department of Forestry
and Fire Protection, The Pacific Lumber Company, Scotia Pacific Company LLC, and
Salmon Creek Corporation.
1.2 Unless otherwise specifically stated in this Agreement, this Agreement
is in addition to and supplements the provisions of the IA as to the parties to
this Agreement.
1.3 The term of this Agreement is the same as the term of the incidental
take permit and the HCP which the Company committed, in the February 27, 1998,
Pre-Permit Application Agreement in Principle," to include in its application
for an ITP and its accompanying HCP.
SECTION 2. EXPENDITURE OF FUNDS.
2.1 The State of California will contribute one hundred thirty million
dollars ($130,000,000.00) to the United States of America on such terms and
conditions as are consistent with AB 1986 and the State's statutory and
Constitutional requirements, toward the purchase of the Headwaters Forest
Preserve.
SECTION 3. MANAGEMENT OF THE LANDS.
3.1 The Company shall manage all of its Lands, regardless of whether the
Company's HCP, IA, federal and/or state incidental take permits are in force, to
comply with AB 1986 and this Agreement as
follows:
(a) A no-cut buffer of one hundred (100) feet on each side of each
Class 1 watercourse and a no-cut buffer of thirty (30) feet on each side of each
Class 2 watercourse shall be maintained unless and until all of the following
conditions are met:
(i) The watershed analysis process described in Section 6.3.2 of
the HCP and Section 3.1.3.1 of the IA has been completed for that watercourse,
and the watershed analysis has been reviewed and approved by the Wildlife
Agencies;
(ii) The Wildlife Agencies have established site-specific
prescriptions for that watercourse. If any of the Wildlife Agencies establish
site-specific prescriptions that differ from prescriptions proposed in the
watershed assessment, the agency shall in writing state its reasons for doing
so; and
(iii) The site-specific prescriptions established by the Wildlife
Agencies have been implemented on that watershed.
(b) Except as provided in subdivisions (a), (c), and (h), all Class 1,
2, and 3 watercourses shall, in addition, be managed consistent with the
restrictions contained in the January 7, 1998, document entitled "Corrected
Version Draft-Interagency Federal-State Aquatic Strategy and Mitigation for
Timber Harvest & Roads for the Pacific Lumber Co. HCP," unless and until all of
the following conditions are met:
(i) The watershed analysis process has been completed for that
watercourse as described in Section 6.3.2 of the HCP and Section 3.1.3.1 of the
IA, and the watershed assessment has been reviewed by the Wildlife Agencies;
(ii) The Wildlife Agencies have established site-specific
prescriptions for that watercourse in the manner described in Section 6.3.2 of
the HCP and Section 3.1.3.1 of the IA. If the Wildlife Agencies establish
site-specific prescriptions that differ from prescriptions proposed in the
watershed assessment the agencies shall state in writing their reasons for doing
so; and
(iii) The site-specific prescriptions established by the Wildlife
Agencies have been implemented on that watershed.
(c) The Company shall implement any site-specific prescriptions that
are established by the Wildlife Agencies, upon
completion of the watershed analysis so that those prescriptions result in a
no-cut buffer of not less than thirty (30) feet and not more than one hundred
seventy (170) feet, on each side of each Class 1 and Class 2 watercourse. With
respect to the minimum thirty (30) foot no-cut buffer on Class 2 watercourses,
any of the Wildlife Agencies may adjust the no-cut buffer if it determines that
it will benefit aquatic habitat or species. In no event, however, may the
minimum thirty (30) foot no-cut buffer be less than that distance established
under the draft HCP dated July, 1998.
(d) The Company shall cooperate fully with the peer-review process
developed pursuant to the IA and HCP, by the United States Fish and Wildlife
Service and the United States National Marine Fisheries Service, in consultation
with CDF, the Regional Water Quality Control Board, and CDFG, to evaluate, on a
spot-check basis, the appropriateness of completed analyses and prescriptions
that are developed through the watershed analysis process.
(e) The Company, in consultation with the Wildlife Agencies, shall
establish and implement a schedule that results in completion of the watershed
analysis process within five years.
(f) Timber Harvesting in Marbled Murrelet Conservation Areas:
For 50 years from the Effective Date of this Agreement, the
Company shall not undertake any timber harvesting, including salvage logging and
other management activities that are detrimental to the marbled murrelet or
marbled murrelet habitat in the following Marbled Murrelet Conservation Areas
("MMCAs"):
(i) Elk Head Residual 564 acres
(ii) ▇▇▇▇▇▇ Mill 722 acres
(iii) ▇▇▇▇▇ Creek 1,421 acres
(iv) ▇▇▇▇▇ Creek Extension 301 acres
(v) Road 3 659 acres
(vi) Owl Creek 904 acres
(vii) ▇▇▇▇ Gift 548 acres
(viii) Right Road 9 322 acres
(ix) Road 7 and 9 North 501 acres
(x) Booth's Run 776 acres
(xi) ▇▇▇▇ ▇▇▇▇▇▇▇▇ 634 acres
(xii) Lower North Fork Elk 531 acres
These tracts of remnant and residual ancient forest are depicted in the map
titled "Murrelet Conservation Areas" that
is on file in the office of the Secretary of the Resources Agency. The acreages
may be adjusted by the United States Fish and Wildlife Service or the United
States National Marine Fisheries Service, so long as the adjustments are made to
more accurately describe Marbled Murrelet habitat and do not decrease the
acreages established pursuant to the draft HCP. Final acreages will be those set
forth in the final HCP approved by the Services and CDFG, provided that such
acreages are not less than those specified in the draft HCP.
(g) The Company shall not undertake any timber harvesting, including
salvage logging and other management activities, in the tract identified as the
"Grizzly Creek Marbled Murrelet Conservation Area," as depicted on the map
titled "Murrelet Conservation Areas," which is on file in the office of the
Secretary for the Resources Agency, for five years from the date of adoption of
the final HCP to provide an opportunity for the purchase, and permanent
protection of, that tract.
(h) The Company shall not undertake road-related activities that, on
balance, are less protective of species and habitat than the provisions
contained in the February 27, 1998, document entitled "Pre-Permit Application
Agreement in
Principle."
(i) The Company shall submit all timber harvesting plans covering
lands that are subject to the HCP and the State and Federal permits for review
and comment, and for a finding as to whether or not the timber harvesting plan
is consistent with the HCP, to the United States National Marine Fisheries
Service and the United States Fish and Wildlife Service at least 30 days prior
to the earliest possible date of the timber harvesting plan approval by CDF.
Nothing in this Section shall affect the authority of CDF to approve or
disapprove timber harvesting plans under State and federal law.
(j) Any and all sustained yield plan(s) and any timber harvest plans
prepared by the Company involving Lands shall be consistent with and shall not
be any less protective of aquatic or avian species than the provisions of
Section 3 of this Agreement.
(k) The Company shall not seek any amendments to the HCP, Federal or
State Permits, and/or the IA that are
inconsistent with the provisions of AB 1986 or this Agreement.
(l) While the HCP remains in effect, the Company further acknowledges
that while the foregoing restrictions and obligations are the requirements as
established under AB 1986 for its management of the Lands, the requirements and
obligations imposed under the HCP may be fully enforced by appropriate State and
Federal agencies, to the extent provided in the IA and/or this Agreement.
3.2 This Agreement, including all restrictions and obligations set forth in
Section 3.1, shall be recorded in an acceptable form at the close of escrow and
when required by Section 9.3, as covenants that run with the land and are
binding on all of the Lands (initially consisting of approximately 947 parcels
consisting of approximately 211,700 acres, as detailed at Attachment 1: Volume
II, Part B of the HCP and to which Additional Lands may be added pursuant to
Section 5 of the IA and Section 9.3 of this Agreement). The legal descriptions
for the parcels constituting the Lands as of the Effective Date of this
Agreement are set forth in Attachment A. The covenants, which shall incorporate
and adopt this Agreement, shall be in a form and content agreeable to the State,
binding on the Company and any successor owners of the Lands for a period of
fifty (50) years from the Effective Date. However, the parties acknowledge that
pursuant to Section 5.2(c) of the IA that the conservation and mitigation
measures provided under the HCP's Operating Conservation Program apply to the
Additional Lands until all impacts from Covered Activities on the Additional
Lands have been fully mitigated in accordance with Section 8.5 of the IA up to
50 years from the date the Additional Lands become Covered Lands under the IA.
The Company hereby acknowledges and agrees that such covenants are entered into
in connection with its grant of the Headwaters Forest Preserve to the United
States of America and the environmental requirements of AB 1986 and in
contemplation of timber harvesting operations on the Lands, and are made for the
direct benefit of the Headwaters Forest Preserve and as a burden to the Lands.
The Company further acknowledges that each of the foregoing restrictions and
obligations relates to the use, repair, maintenance, and/or improvement of the
Lands.
3.3. Enforcement of the foregoing covenants will be by proceedings at law
or in equity, either to restrain violation
and/or to recover damages, against any person or persons violating this
Agreement or attempting to violate any covenant.
3.4 Invalidation of any one of the foregoing covenants by judgment or court
order will not affect any of the other provisions, which will remain in full
force and effect.
SECTION 4. MONITORING.
4.1 The Company shall reimburse the State of California for the actual and
reasonable costs of monitoring for compliance with this Agreement.
4.2 The Company agrees to allow, without unreasonable restriction,
inspection by staff from the Resources Agency and the California Environmental
Protection Agency and their constituent Departments and their successor agencies
of all operations relating to timber harvest of the Lands to assure
compliance with this Agreement.
4.3 In addition to the parties specified in the HCP, the HCP Monitor shall
provide contemporaneous notice of any deviations from or breaches of the HCP to
the Attorney General's Office for the State of California.
SECTION 5. STOP ORDERS / TEMPORARY SUSPENSION OF
OPERATIONS.
5.1. (a) This Section provides an administrative procedure to temporarily
suspend any operation on or affecting Lands while judicial remedies are pursued.
(b) A designated employee or an inspecting forest officer, may issue a
written stop order if, upon reasonable cause, the officer determines that the
Company is conducting operations or is about to conduct operations that are in
violation of this ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇, the HCP, the State Permit, or any timber
harvest plan and that the violation or threatened violation would result in
imminent and substantial harm to soil, water, or timber resources, fish and
wildlife species, or to fish and wildlife habitat. A stop order shall apply only
to those acts or omissions that are the proximate cause of the violation or
threatened violation. The stop order shall be effective immediately and
throughout the next day.
(c) A supervising forest officer from CDF or a designated supervisory
level employee may, after an onsite investigation, extend a stop order issued
pursuant to subdivision (b) for up to five days, excluding Saturday and Sunday,
provided that he or she finds that the original stop order was issued upon
reasonable cause. A stop order shall not be issued or extended for the same act
or omission more than one time.
(d) Each stop order shall identify the specific act or omission that
constitutes the violation or threatened violation, any operation that is to be
stopped, and any corrective or mitigative actions that may be required.
CDF or CDFG, as appropriate, may terminate the stop order if the
responsible parties enter into a written agreement with the appropriate
department assuring that the parties will resume operations in compliance with
this ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇, the HCP, the State Permit, or any timber harvest plan
and will correct the violations.
(e) Notice of the issuance of a stop order or an extension of a stop
order shall be deemed to have been made to all persons working on an operation
when a copy of the written order is delivered to the person in charge of
operations at the time the order is issued or, if no persons are present at that
time, then by posting a copy of the order at the site of the operation where the
violation or threatened violation occurred. If no persons are present at the
site of the operation when the order is issued, the issuing officer or a
designated employee shall deliver a copy of the order to the Company either in
person or to the Company's address of record prior to the commencement of the
next working day.
(f) As used in this Section, "forest officer" means a registered
professional forester employed by the CDF in a civil service classification of
forester II or higher grade. As used in this Section a "designated employee"
means any environmental specialist III, associate fisheries biologist, associate
wildlife biologist, warden, or any other employee of CDFG with a more senior
civil service classification, designated by the manager of Region 1 of CDFG. As
used in this Section "a designated supervisory level employee" means any
supervisor of "a designated employee" designated by the manager of Region 1 of
CDFG.
(g) Failure of the Company or an employee or contractor of the
Company, after receiving notice, to comply with a stop order is a violation of
this agreement and is subject to remedies detailed in Sections 6 and 8 below.
(h) Nothing in this Section shall prevent the Company from seeking a
writ of mandate as prescribed in Chapter 2 (commencing with Section 1084) of
Title 1 of Part 3 of the Code of Civil Procedure, or other relief as provided by
any other provision of law.
5.2 If the Company believes that a forest officer, supervising forest
officer, designated employee or designated supervisory level employee lacked
reasonable cause to issue or extend a stop order pursuant to Section 5.1, the
Company may present a claim to the State Board of Control pursuant to Part 3
(commencing with Section 900) of Title 1 of the Government Code for compensation
and damages resulting from the stopping of operations.
If the board finds that the forest officer, supervising forest officer,
designated employee or designated supervisory level employee lacked reasonable
cause to issue or extend the stop order pursuant to Section 5.1, the board shall
award a sum of not less than one hundred dollars ($100) nor more than one
thousand dollars ($1,000) per day for each day the order was in effect. Nothing
in Section 5 affects the application of Section 8 of this Agreement.
If the board denies the claim, the Company may pursue such judicial
remedies as are available to it to obtain the compensation and damages
authorized by this Section.
5.3 Failure of the Company, after receiving notice, to timely and
reasonably comply with a stop order is a violation of this Agreement, subject to
the remedies as detailed in Section 6 and 8 below.
5.4 In the event any of the three entities ("acting entity") which comprise
the Company as specified in the first paragraph of this agreement takes any
action on land or with respect to timber owned by another entity ("landowning
entity") as to such action the acting entity for all purposes connected with AB
1986, this Agreement, the HCP, the State Permit or any timber harvesting plan
and liability arising thereunder shall
be deemed to be acting as the agent of the landowning entity, and to be acting
within the course and scope of such agency. For purposes of this provision,
action includes failure to act.
SECTION 6. LIQUIDATED DAMAGES FOR BREACH OF AB 1986 AND/OR HCP.
6.1 Notwithstanding the provisions of Section 9.1(a) of the IA, this
Section authorizes liquidated damages that will apply to specific breaches by
the Company of this Agreement, the HCP/IA, the State Permit, any timber harvest
plan, or AB 1986. Except as provided in Section 6.2 (b) below, liquidated
damages provided for in this Section are in addition to any other remedies
available to the State of California in law or in equity. The State and the
Company agree that the provisions for liquidated damages set forth herein are
reasonable under all of the circumstances existing at the time of this
Agreement. The Company further stipulates and agrees that the California Civil
Code Section 1671(b), as it exists on the Effective Date of this Agreement,
governs and controls the enforceability of this liquidated damages provision,
regardless of subsequent amendment of Section 1671(b). Without limiting the
foregoing, but as evidence of the reasonableness of this provision, the State
and the Company mutually acknowledge and agree that any damages that would
result by reason of any such breach are now and would be difficult and
impractical to determine, and that the monetary value of the habitats, wildlife,
watersheds and other environmental subjects covered by the HCP and this
Agreement, including their full implementation, are impossible to calculate. In
placing their initials in the spaces provided below, the parties confirm that
they have read, understand and agree to this provision.
THE SCOTIA PACIFIC SALMON CREEK
PACIFIC COMPANY LLC CORPORATION
LUMBER
COMPANY
Initials: Initials: Initials:
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: ▇▇▇▇ ▇▇▇▇▇▇▇▇
DEPARTMENT OF DEPARTMENT OF
FISH AND GAME FORESTRY AND FIRE
PROTECTION
Initials: Initials:
By: By:
THE RESOURCES WILDLIFE
AGENCY CONSERVATION BOARD
Initials: Initials:
By: By:
6.2 (a) The State and the Company agree that if the Company breaches its
obligations described in this Section 6, then the State shall be entitled to
recover from the Company, as damages for each such breach, an amount equal to
the sums described herein below as liquidated damages.
(b) If the State in its own name recovers damages for a breach of an
obligation of the Company pursuant to the IA, then the State is barred from
seeking remedy for breach of substantially the same obligation under this
Agreement except for breaches of stop work orders issued pursuant to Section 5.
No more than one of the liquidated damages provisions in Sections 6.3, 6.4, 6.5,
and 6.6 shall apply to any breach or violation.
6.3 Breaches of No-Cut Buffers. For each Tree (for purposes of this
Agreement, a "Tree" is a tree which is at least 8" diameter at breast height)
cut in violation of this Agreement in a Class 1, Class 2, or Class 3 no-cut
buffer, or any other habitat buffer, $1000.00, plus one hundred fifty percent
(150%) of the full stumpage value of the timber, with no offset for harvesting
costs.
6.4 Cutting Trees in MMCAs. For each Tree cut in violation of this
Agreement and the HCP in an MMCA, $2,000, plus two hundred percent (200%) of the
full stumpage value of the timber, with no offset for harvesting costs.
6.5 Cutting Nesting Trees. For each Tree cut in violation of this Agreement
and the HCP which has been identified as, or for which there is substantial
evidence that it was a nest tree prohibited from being cut by the HCP or state
law a sum equal to $3,000.00 plus two hundred fifty percent (250%) of the full
stumpage value of the timber, with no offset for harvesting costs.
6.6 The Company shall be liable for liquidated damages of $200.00
for each of the following breaches:
(a) Except for breaches addressed in Sections 6.3, 6.4 and 6.5 above,
for each breach of a restriction on a Class 1, 2, or 3 watercourse.
(b) Failure to complete the watershed analysis required by AB 1986
within five years from the Effective Date. No penalty shall be imposed pursuant
to this paragraph for delays caused by state or federal agencies, or for delays
caused by force majeure or court mandate.
(c) Breach of any road-related activity requirements as set forth in
the HCP and/or IA.
(d) Any other breach of any requirement or prohibition as set forth in
the HCP, IA, this Agreement or a stop work order issued pursuant to this
Agreement, except if such breach is a non-substantive breach, as set forth in
Section 8.6 of the IA.
(e) Each day and partial day for any of the breaches described in this
Section is deemed a separate breach for purposes of computing liquidated damages
under this Section. In addition, the Company shall pay to the State of
California an amount equal to any additional revenue or avoided costs
attributable to such breach. This paragraph shall not apply to breaches for the
cutting of trees if the liquidated damages otherwise required pursuant to
Sections 6.3, 6.4 and 6.5 have been paid.
6.7 In the event that the Company fails to complete within a reasonable
time given the circumstances, including but not limited to where restricted by
state and federal agencies pursuant to the HCP, force majeure or court mandate,
a mitigation or restoration requirement issued by the State pursuant to this
Agreement after that the Company has received notice of such mitigation or
restoration requirement, liquidated damages shall accumulate at the rate of
$3,000.00 per day until such time that the mitigation or restoration requirement
has been completed.
Such liquidated damages will not begin to accrue until ten (10) days after
the State has given written notice to the Company of its unreasonable failure to
implement a mitigation or restoration requirement, and shall cease to accrue
when such corrective action has been completed.
6.8 In the event the Company breaches any of its obligations pursuant to
this Section 6, the State shall be entitled to payment of
all liquidated damages then due upon ten (10) days written notice to the
Company. Only if the Company fails to pay to the State, within ten (10) days
from delivery of such written notice, the State may instruct the issuer of the
Security (as defined in Section 7) below to immediately pay to the State the
amount of such liquidated damages then due.
The notice must contain an affidavit executed by a officer of the State
authorized by the Director of CDFG or CDF or the Attorney General which states:
The undersigned hereby represents that there is a default under
paragraph of the Agreement Relating to Enforcement of AB 1986 and that
the State is entitled to draw down on the Security provided thereunder
in the amount of $ .
Nothing in this Agreement prohibits the Company from seeking equitable
relief, including but not limited to temporary restraining orders and
preliminary and permanent injunctions, against the State and/or the holder of
the Security, if the Company believes that no breach has occurred, that the
Company has cured the breach and/or the computation of liquidated damages in the
notice was incorrect.
6.9 Mitigation and Remediation by the State of California.
(a) The State, at its option, may expend available money to perform
identified and noticed mitigation, restoration, or remedial work required under
Section 6.7, including, but not limited to, supervision of mitigation,
restoration or remedial work or activities which the Company has failed to
perform within a reasonable period of time following notice, or under such
circumstances when the probability and potential extent of harm make it
reasonably necessary to take immediate action to prevent, reduce, or mitigate
damages to habitat, wildlife, watersheds, natural resources, or other
environmental values.
(b) The State shall be permitted reasonable access to the affected
property as necessary to perform any required mitigation, restoration, or
remedial work.
(c) If the mitigation, restoration, or remedial work is undertaken by
the State, the Company will be liable to the State to the extent of the
reasonable costs actually incurred in mitigating, restoring, or remediating the
environmental harm. The amount of costs is recoverable through the security
interests set forth in Section 7 below, and if insufficient, through a civil
action by, and paid to, the State.
6.10 Increasing Security; Maintaining Security.
If in any year the Company is required to pay any liquidated damages
pursuant to this Section 6, then in the following year, and only in the
following year, the amount of security shall be increased by the total amount of
liquidated damages required to be paid in that year. The Company shall maintain
the required amount of security and shall replenish the security within 10 days
to the required amount, as necessary.
6.11 Each of the three entities which comprise the Company as specified in
the first paragraph of this agreement shall carry out each obligation contained
in this agreement, AB 1986, the HCP, State Permits or any timber harvest plan;
provided that this provision shall not require duplication by Company entities,
and if an obligation is performed by one or more Company entities, the remaining
Company entity or entities shall not be required to perform the same obligation.
Each such obligation shall be the individual obligation of each Company entity.
Consistent with the individual nature of such obligations, notwithstanding any
other provision of this Agreement, no Company entity shall be liable for the
payment obligations of any other Company entity under this ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇,
the HCP, the State Permits, or any timber harvesting plan.
SECTION 7. SECURITY INTERESTS.
7.1 (a) The Company shall post security covering all of its obligations for
fifty (50) years under this Agreement in the amount of Two Million Dollars
($2,000,000.00). The security shall be in the form of a pledged savings or trust
account, certificate of deposit, irrevocable letter of credit, or other form
approved by the State. At the Effective Date, the security shall be the same
security posted pursuant to the IA.
(b) The Company shall be deemed to have posted security as required by
this Section so long as it posts, maintains and replenishes the security
required by and pursuant to Section 3.3 of the IA in an amount consistent with
this Agreement, which shall include the same terms for increasing security as
set forth in Section 6.10 of this Agreement. In the event the State and any of
the Wildlife Agencies simultaneously call upon the security, such security shall
first serve the purposes of the Wildlife Agencies under the IA.
(c) Notwithstanding the prohibition on duplication in Section 6.11 and
consistent with the other provisions of that section,
each of the three entities which comprise the Company as specified in the first
paragraph of this Agreement shall be separately required to provide, maintain
and replenish the security in the amount set forth and in accordance with terms
of this Section 7. In the event of any action by or liability of a Company
entity or entities arising under this agreement, AB 1986, the HCP, the State
Permits or any timber harvest plan, the State may call upon the security posted
by the Company entity or entities whose action or liability was the basis of the
need to call upon the security. Alternatively this provision shall be satisfied
if the company entities furnish their written agreement in a form satisfactory
to the State providing the security in the amount of Two Million Dollars
($2,000,000.00) total for the three entities, as it may be required to be
increased and/or replenished pursuant to Section 7 and 6.10, is at all times
available to the State in the event of action or liability of any Company entity
arising under this Agreement, AB 1986, the HCP, State Permits or any timber
harvest plan. For purposes of this Section, action includes failure to act.
7.2 The Security shall be increased annually for inflation on the first
anniversary of the Effective Date of this Agreement, and continuing each year
thereafter throughout the duration of the Agreement by the percentage increase
in the Consumer Price Index, calculated as set forth below.
(a) Definitions. For the purposes of this Section 7,
(1) "Index" means the Consumer Price Index published by the
Bureau of Labor Statistics of the United States Department of Labor, San
Francisco - Oakland - San Jose, CA, All Items and Major Group Figures For Urban
Wage Earners and Clerical Workers (1982-84 = 100). If a substantial change is
made in the Index, then the Index will be adjusted to the figure that would have
been used had the manner of computing the Index in effect at the date of this
Agreement not been altered. If the Index (or a successor or substitute index) is
not available, a reliable governmental or other non-partisan publication
evaluating the information used in determining the Index will be used.
(2) "Base Index" means the Index last published prior to the
Effective Date of the HCP.
(3) "Adjustment Index" means the Index last published prior to
each anniversary of the Effective Date of the HCP.
(4) Notwithstanding any other provision of this Agreement, in no
event shall any adjustments based on the difference
between the Base Index and any Adjustment Index result in a decrease in
the amount of the Security.
(b) Increases. At the commencement of each twelve (12) month period
following the Effective Date of this Agreement, and continuing thereafter for a
period of fifty (50) years (or such longer period as the Agreement may be
extended or renewed), the security shall be increased by the product resulting
from the multiplication of (x) the security for the first year following the
Effective Date of the Agreement by (y) a fraction having as its numerator the
most recent Adjustment Index and having as its denominator the Base Index.
SECTION 8. NO WAIVER.
8.1 In the event the State determines to enforce any provision of this
Agreement through litigation seeking any form of equitable relief, including
without limitation, temporary and permanent injunctive relief, the Company
specifically agrees that:
(a) Any breach or violation of this Agreement will cause irreparable
harm and injury to the State and therefore injunctive relief, including a
temporary restraining order, preliminary injunction, may be granted.
(b) No extensions of the time periods specified for temporary
restraining orders or preliminary injunctions in the Code of Civil Procedure or
local rules shall be requested unless by stipulation.
(c) The seeking of equitable relief by the State shall not prevent the
State from seeking any other remedy provided by law.
8.2 In the event that the State declares a breach and seeks to draw on the
Security, the Company may seek such equitable relief as it deems appropriate to
enjoin the payment of the Security to the State if the Company disputes whether
the breach occurred, whether the Company has failed to cure, and/or whether the
computation of liquidated damages in the notice was accurate.
SECTION 9. TRANSFERS.
9.1 Except as hereafter expressly provided, the Company may sell, agree to
sell, assign, lease, convey, alienate or otherwise transfer the Lands, or any
part thereof or interest therein (including any transfer to any parent,
subsidiary or affiliated company or successor-in-interest by merger,
consolidation or acquisition), whether by the operation of
law or otherwise (collectively a "Transfer") pursuant to and in accordance with
Sections 5.3, 5.4, and 5.5 of the IA. Prior to transfer, the Company shall
insure that the covenants required by Section 3.2 will be transferred with the
Land and that the transferee has assumed in writing the Company's obligations
under this Agreement.
9.2 Except as provided in Section 9.1, upon a Transfer of Lands to another
landowner carried out in accordance with the terms of the IA, the transferor
shall not bear any responsibility for any future management activities, nor be
liable for any Take of any Species by any other persons, on such transferred
lands under the terms of the IA or this Agreement.
9.3 Upon approval from State or Federal agencies for the addition of Lands
as Covered Lands pursuant to the HCP and IA, the Company shall record this
Agreement as a covenant as required in Section 3.2 on the additional Lands
proposed to be made Covered Lands pursuant to the IA.
9.4 Notwithstanding Section 9.1, if the Company swaps lands as provided in
Section 5.3.2 of the IA, upon recordation of the covenant required by Sections
3.2 and 9.3 of this Agreement on the lands to be added as Covered Lands, the
State shall authorize the release from the covenant required by Section 3.2 on
the Lands which will no longer be Covered Lands pursuant to the swap.
9.5 In the event of any transfer of Lands for which the transferee has
executed an assumption agreement pursuant to Section 9.1 and for which the
transferee is seeking to continue timber harvesting under the same requirements
as applied to the Company, the State agencies which are signatories to this
Agreement will:
1.) Use their best efforts to expedite processing and decisions on the
timber harvesting activities requested by the transferee by all State agencies
having jurisdiction over those proposed activities.
2.) Use their best efforts to cause all federal agencies having
jurisdiction over the timber harvesting activities requested by the transferee
to expedite processing and decisions on the requests filed with federal agencies
by the transferee for approval of such activities.
SECTION 10. MISCELLANEOUS.
10.1 Severability. If any provision of this Agreement is found
invalid or unenforceable, such provision shall be enforced to the maximum extent
possible and the other provisions shall remain in full force and effect to the
extent they can be reasonably applied in the absence of such invalid or
unenforceable provision.
10.2 The provisions of this Agreement are in addition to and, except as
otherwise provided herein, shall not limit any of the legal rights or remedies
available to the Parties under any applicable law or regulation.
10.3 Governing Law. This Agreement shall be governed by the laws
of the State of California.
10.4 Venue. Any action to enforce or arising out of this Agreement shall be
brought in the Superior Court in the County of Sacramento. In the event that any
party institutes any action for equitable relief arising out of this Agreement,
in addition to any other notice required by law, notice of such action shall be
given to the other parties to this Agreement and the Attorney General, in
writing, within three (3) court days following the filing of such action.
10.5 Counterparts. This Agreement may be executed by the parties in several
counterparts, each of which shall be deemed to be an original copy. This
Agreement shall be effective upon the signature of all of the parties.
10.6 Amendment.
(A) This Agreement is not subject to amendment except in a writing
signed by all the parties hereto.
(B) No signatory shall approve of any proposed amendment unless:
(1) The proposed amendment has been found consistent by the
President of the University of California, the ▇▇▇▇ of the School of Forestry at
the Berkeley Campus of the University of California and a panel of distinguished
faculty scientists selected by the President and the ▇▇▇▇, with the goals of the
federal and state Endangered Species Acts, the HCP and AB 1986.
(2) At least thirty days prior to approval, the final form of the
amendment is made available to the public by the Company and the Agencies and
the Company has sent a copy of the final form of the amendment to all who have
requested copies of such amendments.
(3) The amendment is consistent with AB 1986.
10.7 This Agreement is subject to the approval by vote of the WCB following
a public hearing and shall not take effect until such public hearing and the
grant of approval by the WCB.
10.8 Condition of Title. The Company warrants that, as of the Effective
Date of this Agreement, the condition of the title of the property described in
the CLTA Standard Coverage Policy of Title Insurance, issued by Fidelity
National Title Insurance Company in Policy Number 27-01-90-213442 and which is a
portion of the property subject to this agreement, is as described in that
Policy and that there are no other monetary encumbrances except for the lien of
real estate taxes for the fiscal year 1999-2000. The Company also warrants that
the Indenture between the Scotia Pacific Company LLC and the State Street Bank
and Trust Company as trustee, dated July 20, 1998, as of close of escrow is
unamended and is in full force and effect.
10.9 Each party hereto acknowledges and warrants that, except for the
agreements, considerations, covenants and promises specifically set forth
herein, no party has made any other representations, warranties, promises or
provided any other inducements for entering into this Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the Effective Date.
Dated: THE PACIFIC LUMBER COMPANY
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇,
President and Chief Executive Officer
Dated: SCOTIA PACIFIC COMPANY LLC
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
President of Scotia Pacific Company LLC
Dated: SALMON CREEK CORPORATION
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Dated: CALIFORNIA RESOURCES AGENCY
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Secretary of the California
Resources Agency
Dated: CALIFORNIA DEPARTMENT OF FISH AND GAME
By: [signature illegible]
Director of the California Department of
Fish and Game
Dated: CALIFORNIA DEPARTMENT OF FORESTRY AND
FIRE PROTECTION
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Director of California Department of
Forestry and Fire Protection
Dated: CALIFORNIA WILDLIFE CONSERVATION BOARD
By: /S/ W. ▇▇▇▇ ▇▇▇▇▇▇▇
W. ▇▇▇▇ ▇▇▇▇▇▇▇
Executive Director of the California
Wildlife Conservation Board
