WHEREAS, AWP is currently managing and intends in the future to manage the Blackwater tract for a sustained source of high quality timber; and

WHEREAS, the United States Fish and Wildlife Service ("FWS") has notified AWP that the Blackwater tract has or may have suitable habitat for, and is or may be occupied by a member or members of, four species listed as endangered or threatened species ("listed species") under the Endangered Species Act ("ESA") - Virginia northern flying squirrel, Cheat Mountain salamander, Indiana bat, and Virginia big-eared bat; and

WHEREAS, on November 19, 1998, counsel for the Sierra Club and Mr. James Sconyers (collectively, the "Notice providers") mailed a notice of intent to sue under ESA º11 to AWP asserting, inter alia, that AWP was violating the ESA in its timber harvesting activities on the Blackwater tract and seeking an injunction against timber cutting on the Blackwater tract; and

WHEREAS, FWS addressed a letter to AWP on December 22,1998, which: informed AWP that not just the Virginia flying squirrel and Cheat Mountain salamander, but also the Indiana bat and the Virginia big-eared bat are or may be present in Blackwater Canyon; suggested that, if "take" of any of the listed species cannot be avoided, a Habitat Conservation Plan should be prepared and an Incidental Take Permit sought by AWP; and recommended a meeting with AWP to "discuss AWP's future plans and interim measures" for the Blackwater tract; and

WHEREAS, AWP responded to the Notice Providers and FWS expressing confidence that it had not violated the ESA or engaged in any "take" of a listed species, but also stating a willingness to consider the concerns expressed; and

WHEREAS, AWP determined that it should update and expand its Management Plan to address the Indiana bat and Virginia big-eared bat and welcomed the opportunity to discuss with FWS, and give thorough consideration to, all available avenues for AWP to meet its ESA obligations; and

WHEREAS, AWP determined that it could not enter or complete such discussions prior to the expiration of the Notice Providers' 60-day notice period and wished not to conduct such discussions while defending its actions in a lawsuit or lawsuits; and

WHEREAS, the Notice Providers wish to encourage AWP to enter the discussions with FWS and prefer not to file a lawsuit or lawsuits if an out-of-court settlement may be reached;

THEREFORE, AWP and the Notice Providers, by the undersigned duly authorized representatives thereof, do hereby agree as follows:

(1) AWP will, as soon as possible, but no later than April 1,1999, initiate discussions with the FWS as described above.

(2) AWP may complete the remaining timber harvesting on an area of approximately 20 acres within the Blackwater tract ("current operating area" as indicated by dark shading on the map labeled "appendix B"), as such activities are described in appendix A to this Agreement, provided that no timber harvesting, except the Best Management Practices referred to in paragraph (4), and no ground-disturbing activities, except the Best Management Practices referred to in paragraph (4), will take place after March 31, 1999.

(3) AWP will advise the Notice Providers, in writing, of its intention to initiate any timber harvesting (defined as the cutting of trees or the removal of any wood) other than that described in paragraph (2), and any ground-disturbing activity (defined as the use of hand tools or heavy equipment that touch the ground), on the current operating area or elsewhere in the Blackwater tract at least 60 days in advance of such harvesting or activity and will provide in that advice a summary of the results of AWP's discussions with FWS and the decisions AWP has reached as to the manner in which it intends to comply with the ESA in the subject harvesting and in its future silvicultural activities on the Blackwater tract.

(4) AWP will not conduct any timber harvesting other than that described in paragraph (2), or any ground-disturbing activity, on the current operating area or elsewhere in the Blackwater tract until the 60-day notice period described in paragraph (3) has expired: Provided,

That AWP may undertake Best Management Practices activities (defined as post-harvesting practices set forth in the publication of the West Virginia Division of Forestry entitled "Best Management Practice Guidelines For Controlling Soil Erosion and Water Siltation (WVDOF-TR-96-3 (April 1996))) to provide protection to such area and tract at anytime within two weeks after the cessation of timber harvesting activities, whenever possible, and at any other time where necessary to prevent or respond to significant erosion or sedimentation problems.

(5) So long as AWP complies with its obligations under paragraphs (1) through (4), and until the Notice Providers receive the written advice described in paragraph (3), and unless AWP violates the terms of this Agreement, the Notice Providers will refrain from filing any lawsuit based on the November 19, 1998, notice of intent to sue or any other lawsuit against AWP, FWS, or the Department of the Interior alleging a violation of the ESA in or concerning the Blackwater tract; Provided

That nothing shall prevent the Notice Providers from seeking prompt judicial review of any final agency action of the FWS regarding the Blackwater tract taken after the signing of this Agreement.

(6) The Notice Providers, in addition to respecting the restraint from litigation provided in paragraph (5), will give thorough consideration to the results of the AWP/FWS discussions and to AWP's decisions described in paragraphs (3) before initiating any lawsuit described in paragraph (5).

(7) This Agreement may be amended by mutual consent of the parties hereto.

(8) If any party to this Agreement at any time believes that any provision of this Agreement has been or is being violated, it will so notify the undersigned representative of the party alleged to be in violation or, if such person cannot be located, the "second contact person" identified below, and if the "second contact person" cannot be located, the "third contact person." Said notification will be in writing; if written communication cannot be transmitted promptly (e.g., on a weekend day), telephone and fax notification will be attempted. The party alleged to be in violation will provide an explanation concerning the alleged violation as soon as possible, and in no event more than 2 days from the date of receipt of the notification. If the party alleging the violation, having made best efforts to contact the party alleged to be in violation, either cannot establish direct communications or, if communications is established, does not accept or agree with the explanation of the party alleged to be in violation, it may bring legal action to remedy the violation.

____________________ date __________

John Crites, on behalf of Allegheny Wood Products, Inc.

First contact person: Mark Sturgill, Work phone: 304/257-1082, Work fax: 304/257-2342, Emerg. ph.: 304/257-2336.

Second contact person: Kelly Riddle,Work phone: 304/329-2097, Emerg. ph.: 304/291-2360.

Third contact person: Nathan Thompson,Work phone: 304/693-7034, Emerg. ph.: 304/788-5846

______________________date___________

James B. Dougherty, on behalf of the Sierra Club and Mr. James Sconyers.

First contact person: James B. Dougherty, Work phone: 202/488-1140, Work fax: 202/484-1789.

Second contact person: James Sconyers, Work phone: 304/789-6277 Emerg. ph.:304/789-6277.

Third contact person: James Kotcon,Work phone: 304/293-3911 x2230,Emerg. ph..: 304/594-3322.

[appendix A needed]

Saturday, February 27, 1999 7:15:54 PM