Publications > Internal Revenue Service > Market Segment Specialization Program > Hardwood Timber Industry

Exhibit 3

FORM FM-10
(Rev. 10-72)

TIMBER SALE AGREEMENT

_____________________Scale

This AGREEMENT, made and entered into this ____________ day of _________ , 19___, by and between ___________________________ whose address is _____________________________________________ hereinafter referred to as the SELLER, and whose address is __________________________, hereinafter referred to as the PURCHASER.

WITNESSETH:

ARTICLE 1. .The SELLER hereby agrees to sell and the PURCHASER agrees to purchase, according to the conditions and requirements hereinafter mentioned, all timber marked or designated for cutting in the ___________________________________________ Magisterial District, ________________ _____________________, County, (state), and further described as follows:_______________________________________________________________

ARTICLE 2. The PURCHASER agrees to pay the SELLER the sum of ______________________ for the designated trees whose volume is estimated to be _____________ board feet measure more or less.

ARTICLE 3. The PURCHASER further agrees to make payment according to the following schedule:________________________________ _____________________________________________________________________________________________________________

ARTICLE 4. All operations on the sale area, including the removal of timber and/or lumber, may be suspended by the SELLER, in writing, if conditions and requirements set forth in the AGREEMENT are disregarded. Failure to comply with any one of the said conditions or requirements, if persisted in,
shall be sufficient cause to terminate this AGREEMENT.

ARTICLE 5. The PURCHASER further agrees to cut and remove said timber and/or lumber, in strict accordance with the following conditions and requirements:

(A) Cutting and removal of all marked timber, regardless of size or species, shall continue in progressive manner from a point chosen by the SELLER.

(B) All marked timber shall be removed from the premises of the SELLER and designated cull trees deadened by the PURCHASER on or before ____________________ unless an extension of time is granted.

(C) Construct temporary truck roads necessary for the removal of the designated timber. Location of said roads to be determined by the
PURCHASER and the Service Forester.

(D) Suspend operation of logging equipment on main haul roads during periods when such operations would cause excess erosion.

(E) To do all within his or his employee's power, both independently and upon request of the SELLER, to prevent and suppress forest fires on the area.

(F) Fences, fields and roads shall be protected from unnecessary damage during the logging operation, and if necessary shall be repaired to their original condition by the PURCHASER.

(G) Young growth and trees left standing shall be protected from unnecessary damage and only dead or less valuable trees shall be used for construction purposes during the operation.

(H) Brush and water bars shall be used to retard erosion when such is the result of logging operation and upon request of the SELLER.

(I) The PURCHASER shall keep all structures used in connection with this sale, and the grounds in their vicinity, in a sanitary condition. When camps or other establishments are moved or abandoned, the PURCHASER shall dispose of all debris and abandoned structures.

(J) Undesignated trees which are cut or damaged through carelessness shall be paid for at the following rate:

ARTICLE 6. The SELLER agrees to the following conditions and requirements:

(A) To guarantee title to the forest products covered by this AGREEMENT and to defend it against all claims at his expense.

(B) To grant freedom of entry and right-of-way to the PURCHASER and his employees on and across the area covered by this AGREEMENT, provided such entry does not conflict with specific provisions of this AGREEMENT.

(C) To allow the PURCHASER to erect and operate a sawmill on the sale area for the length of time covered in ARTICLE 5, Section B and in
accordance with ARTICLE 5, Section 1 of this AGREEMENT.

ARTICLE 7. In case of dispute over the terms of this AGREEMENT, final decision shall rest with arbitrators, one of whom shall be selected by each
party of this contract; in case the two selected shall disagree, they shall select a third arbitrator and the decision of the majority shall be final with respect to either
acts to be done or compensation to be paid by either party to the other.

IN WITNESS WHEREOF, the parties have subscribed their names on the date first above written.

___________________________________
SELLER

___________________________________
PURCHASER

WITNESSES: