THIS CONTRACT is made and entered into this_____(day)_______(month)_____(year), by and

between_______________________________________, hereinafter referred to as "owner" and

_____________________________of__________________________ hereinafter referred to as "buyer".

RECITALS

The owner holds good and clear title to standing timber on the hereinafter described real property and is

desirous of selling said timber to Buyer, who is desirous of purchasing and removing the same.

Owner and Buyer have negotiated the terms of this contract and are desirous of signing this instrument as

written evidence of their negotiated agreement and of the terms and conditions under which Buyer shall

purchase and remove timber.

NOW, THEREFORE, Owner and Buyer agree as follows:

1. GENERAL PROVISIONS: Owner and Buyer specifically agree that an integral part of the terms

and conditions of this Contract are those certain provisions relating to Buyer’s status, insurance

and indemnity, logging operations, fire protection and slash disposal, warranties and taxes,

prohibition against liens, attorney fees, recording default and remedies, the binding effect hereof,

notices and prospectus and schedules, which provisions are set forth in the attached Exhibit "A"

Which is simultaneously herein executed by both parties.

2. CONTRACT AREA: Timber covered by this contract is located on the portions of land as shown

on the attached map (Attachment #1). The Owner has designated, on site, the boundaries of the

contract area and the Buyer acknowledge that he understands and agrees not to cut any timber

outside of those designated boundaries. The property is locate in: Section_____, T___N,

R___W.______County, Montana.

3. CONTRACT TIMBER AND PRICE:

3.1 Subject ot the utilization standards stated below, Buyer shall cut and remove the following

species and grades of timber on the contract area designated by the OWNER (the contract

timber):

Species and Estimated Unit of Price Per

Grade Quantity Measure Unit

All live & dead

trees designated

for cutting _____________ MBF $____________

ESTIMATED TOTAL CONTRACT $

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3.2 Buyer shall cut and remove all contract timber so designated for harvesting. In all units,

live, green leave trees that are marked with a vertical blue paint stripe shall not be cut. All

other merchantable trees suitable for logs, are to be taken from the site.

Merchantable timber is defined as being capable of producing at least one sixteen (16) foot

log with a minimum top diameter of 5.5 inches inside of the bark and have net scale of at

least 33.3 percent of the gross scale. All material shall be utilized to a minimum diameter of

5.5 inches inside the bark at the small end. Stumps shall be cut to cause the least waste and

not higher than 10 inches on the side adjacent to the highest ground.

3.3 If Owner so elects, Buyer shall pay double the rate stated in paragraph 3.1 for designated cut

trees left uncut. The Buyer shall pay $25.00 for each marked "leave tree" which is cut by the

buyer and shall pay the stated price for all marked leave trees which are broken or otherwise

damaged by careless logging. Leave trees severely damaged during the logging shall be

salvaged and made into logs and an X sawed on to the top of the stump. Buyer shall pay

$25.00 for each merchantable "cut tree" that is left uncut. Owner’s good faith determination

of the volume of timber subject to the provisions of this paragraph shall be conclusive.

Owner’s election to charge Buyer under this paragraph shall not constitute a waiver of other

remedies which may be available for Buyer’s default.

4. SCALING; PAYMENT: PASSAGE OF TITLE:

4.1 Scaling. All logs shall be scaled at the Buyer’s expense by a scaler approved by Owner.

Buyer shall hold the last scaled load for check scaling. Failure to do so will result in a

$200.00 penalty. Scale tickets shall be Faxed to Sale Administrator immediately after

scaling. A weight/sample scale method will be used to determine the net scale of delivered

logs. All loads will be weighted when they arrive at the mill. The weigh master at that time

will determine if the load is to be scaled load or a non-scaled load by the use of a pull-tab

card with the agreed frequency of 1 in 3. Non-scaled loads are free to be processed. Total

volume delivered during each payment period will be determined by application of an

accumulated weight factor derived from sample scale loads and applied to the net weight

delivered for that pay period.

The net scale of all logs shall be determined (using the Scribner Decimal C log rule adjusted

for smaller diameter logs) in accordance with the National Forest Log Scaling Handbook,

FSH 2409.11. Any changes to these methods of measurement must be agreed to in writing

by the Owner. Buyer shall bear and pay all costs of scaling and shall hold Owner harmless

from all liability arising out of Buyer’s scaling operation. The scale frequency will be at least

one in three (1:3).

4.2 Product Identification and accountability. All log truck loads will be marked with paint, with

the Owner’s name "___________" along with the last three (3) digits of the load receipt

number, on the rear of the load. Truck tickets indicating timber sale property description,

date, destination, logger and trucker, shall be filled out for each load of logs removed from

the contract area. This ticket shall be stapled to the outside bottom bunk log, immediately

behind the driver. The receiving mills will furnish the load receipt book. A two (2) unit load

shall require two (2) load receipts. Purchaser shall be fined $50.00 for each load improperly

marked or load ticket that is improperly filled out, not attached, lost and unused ticket books

not returned. When there is activity on the sale area, the Logger will furnish the Owner and

the Owner’s representative with a listing of the load tickets used, showing the ticket number

and date, at the end of each week or other agreed upon time period.

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4.3 Stumpage payment shall be withheld and paid directly to the ______________at the rates

indicated in paragraph 3.1 as logs are removed from the contract area and scaled. Owner

shall be notified by Buyer, in advance, of every mill to which Contract timber is hauled.

Payment shall be mailed to____________________________________________________

If there is activity on the sale area, payment is expected on the proper payment date.

4.4 This is a pay-as-cut sale. Title to the contract timber shall pass to the Buyer when it is

removed from the contract area and scaled. Owner shall have a security interest in contract

timber removed from the contract area until it has been paid for.

Buyer shall execute whatever documents necessary to evidence and perfect Owner’s security

interest. If requested by Buyer following payment for logs, Owner shall execute documents

releasing such security interest in such paid-for logs. Risk of loss to the contract timber shall

be upon buyer from the time that the timber is cut.

5. TIME FOR REMOVAL:

5.1 Buyer shall commence operations on the contract area as shown in attachment #1, but not

prior to furnishing necessary insurance documentation, bond and signing this agreement.

Removal of contract timber and all other contract obligations, except for slah disposal, shall

be completed by ___________________. Owner will require an advanced pre-payment of

$20,000 if at least 100 MBF has not been removed and paid for by ______(day)

_________(month) _____(year).

5.2 After Buyer concludes its logging operation on the contract area or following the termination

date stated in paragraph 5.1, whichever is earlier, all standing or down timber or logs on the

contract area and all roads and other improvements shall become the property of Owner free

from any claims of Buyer.

5.3 Logs shall not remain on the sale are for longer than 30 days after being cut off of the stump,

except for right-of-way logs cut for road construction. These will be removed in a timely

manner.

6. ROAD USE AND CONSTRUCTION:

6.1 Owner has the right to use _____ Road for commercial purposes, which is needed to access

the sale area. There will be a road maintenance fee for this road, to be arranged for with the

USFS and paid by Buyer. Any snow plowing will be at Buyer’s expense. Said road may be

closed by the USFS during times of inclement weather.

6.2 The construction of permanent spur access roads through the sale area will be the

responsibility of the buyer. These road locations are shown on attachment #1, most of the

centerline locations are staked on the ground. Roads shall have finished running surface at

least 12 feet wide with turn-outs spaced at suitable intervals. This road is constructed at the

Buyer’s expense.

6.3 Buyer may reconstruct any existing roads to sale area and may construct any landings on the

contract area necessary for its logging operations, subject to Owner’s advance approval of

location and construction standards. Road reconstruction and landing construction costs will

be at Buyer’s expense.

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