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HER MAJESTY THE QUEEN

IN RIGHT OF THE PROVINCE

OF BRITISH COLUMBIA

represented by the Minister of Forests

- and -

MacMILLAN BLOEDEL LIMITED

SETTLEMENT AGREEMENT

Dated: March 16, 1999

TABLE OF CONTENTS

Section Page

1. OBLIGATIONS OF MB 3

2. OBLIGATIONS OF THE PROVINCE 4

3. TIMING AND CLOSING 4

4. TERMS OF SETTLEMENT 5

5. PAYMENT OF THE SETTLEMENT AMOUNT 5

6. SCHEDULE A LANDS 10

7. VIP LANDS 12

8. SCHEDULE B LANDS 17

9. CONDITIONS PRECEDENT 23

10. APPRAISAL CONDITIONS 24

11. AUTHORITY AND CAPACITY 25

12. FURTHER ASSURANCES 26

13. NOTICES 26

14. ADDITIONAL TERMS 27

15. DISPUTE RESOLUTION - APPRAISALS 29

SETTLEMENT AGREEMENT

THIS AGREEMENT is made the 16th day of March, 1999

BETWEEN:

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA, represented by the Minister of Forests

OF THE FIRST PART

AND:

MACMILLAN BLOEDEL LIMITED, a body corporate, continued under the laws of Canada and registered extra-provincially in the Province of British Columbia and having an office at 925 West Georgia Street, Vancouver, British Columbia

OF THE SECOND PART.

WHEREAS:

A. Under section 12 of the Forest Act, R.S.B.C. 1996, c. 157, (the "Forest Act") and predecessor legislation, the Minister of Forests of the Province of British Columbia (the "Minister") or the Minister's delegate, on behalf of Her Majesty the Queen in right of the Province of British Columbia, (the "Province"), has entered into agreements with MacMillan Bloedel Limited ("MB") permitting MB to harvest Crown and other timber on Crown and other lands ("timber agreements");

B. MB holds timber agreements on Vancouver Island, including Tree Farm Licence 39 ("TFL 39") and Tree Farm Licence 44 ("TFL 44") and Timber Licences located both within and outside of TFL's 39 and 44;

C. By the Carmanah Pacific Park Act, S.B.C. 1990, c. 36, and by the Park Amendment Act, 1995, S.B.C. 1995, c. 54, and pursuant to Orders in Council Nos. 589/96 and 592/96, the Province created parks and the Klanawah River Ecological Reserve (the "Klanawah Ecological Reserve") on Vancouver Island which overlap with some of the timber agreements held by MB on Vancouver Island;

D. By a Notice of Arbitration dated July 25, 1995 and delivered to the Province, MB required the Province to enter into arbitration to determine the compensation payable to MB as a result of the creation of Carmanah Pacific Park by the Carmanah Pacific Park Act.

E. On September 23, 1997, MB commenced a proceeding by filing a petition in the Supreme Court of British Columbia under number A972476, Vancouver Registry, ("the Petition") seeking a declaration that it is entitled to compensation from the Province as a result of the impact of the creation of new parks and the Klanawah Ecological Reserve on existing MB timber agreements;

F. The Province has affirmed its intention to pay fair compensation to the holders of timber agreements affected by the creation of new parks and the Klanawah Ecological Reserve;

G. The parties have agreed to settle, as of January 1, 1999, MB’s claim to compensation under the Carmanah Pacific Park Act and its claim for a declaration that it is entitled to compensation for the creation of new parks and the Klanawah Ecological Reserve under the Carmanah Pacific Park Act and the Park Amendment Act, 1995 and Orders In Council Nos. 589/96 and 592/96, as those claims are embodied in the Petition and in the Notice of Arbitration (both of which are collectively called "the Claim") and MB confirms that its rights under the timber agreements to the extent affected by the Carmanah Pacific Park Act are extinguished as of January 1, 1999;

H. It is the intention of the parties that the Claim be settled by:

1. the Province replacing the interests in lands and timber of MB affected by the creation of parks and the Klanawah Ecological Reserve by transferring certain Crown lands to MB and releasing other private lands of MB's from timber agreements; and,

2. to the extent that it has not been feasible by a certain outside date to complete the land transfers or releases contemplated herein, the Province paying any remaining compensation in cash.

 

 

NOW THEREFORE this agreement witnesses that, in consideration of these presents and other good and valuable consideration now passing from each party to the other, the receipt and sufficiency of which are hereby acknowledged, the parties covenant and agree as follows:

 

1.1 MB agrees to:

a) release the Province from all liability with respect to the Claim, by executing and delivering to the Province a release in the form attached hereto as Schedule "A";

b) prepare, execute, deliver to the Province for execution, and file with the Supreme Court of British Columbia, a Consent Order dismissing proceeding A972476 against the Province without costs;

c) execute and deliver to the Province the Agreement to Terminate Arbitration in the form attached hereto as Schedule "B";

d) negotiate with the Province in good faith, and to use commercially reasonable efforts, to settle areas and values to be applied on account of the Settlement Amount (as that term is hereinafter defined) in the manner set forth in subsection 5.2 of this Agreement; and,

e) provide its consent as licensee under timber agreements, as necessary, to carry into effect the land transfers, releases of land from timber agreements and reductions in allowable annual cut contemplated by this Agreement, and to provide such other releases, quit claims or other evidence of surrender of all rights under all or part or parts of timber licences, as required, to fully extinguish the rights of MB as licensee under timber agreements which form part of the Claim.

 

2.1 The Province agrees to pay to MB, in full and final settlement of the Claim, compensation equal to the sum of $83.75 million (Canadian) (the "Settlement Amount"), together with interest thereon from January 1, 1999 to the date of payment thereof in accordance with this agreement.

2.2 The Province also agrees to:

a) execute the Consent Order dismissing proceeding A972476 without costs against the Province, and to return the executed Consent Order to MB or to counsel for MB, for filing with the Supreme Court of British Columbia;

b) execute and deliver to MB the Agreement to Terminate Arbitration in the form attached hereto as Schedule "B";

c) negotiate with MB in good faith, and to use reasonable efforts, to settle areas and values to be applied on account of the Settlement Amount in the manner set forth in paragraph 5.2 of this Agreement; and,

d) amend timber agreements as necessary, to carry into effect the land transfers, releases of land from timber agreements and reductions in allowable annual cut contemplated by this Agreement.

 

3.1 The initial closing of the transactions contemplated by this agreement shall take effect on Wednesday, April 7, 1999 (the "Closing Date").

3.2 The closing is to take place on the Closing Date at 11:00 o'clock in the forenoon, at the offices of MB in Vancouver (the "Closing").

3.3 At the Closing, each party will table the documents specified in Schedule "C" hereto, substantially in the forms attached hereto as schedules. Those documents requiring execution by the other party will thereupon be executed as necessary such that all documents to be executed by both parties shall then have been executed. Any document which is tabled by a party for the purpose of execution by the other party, shall not be deemed to have been delivered by the party tabling it to the other party. No documents shall be considered to have been delivered unless and until all documents have been tabled by both parties for delivery.

3.4 Upon both parties tabling all documents required by each to be tabled, and upon the full execution of all documents as required, documents will be delivered by each party to the other, in accordance with Schedule "D".

 

4.1 It is agreed that the Claim will be settled on the following terms (the "Terms of Settlement"):

a) The parties hereto recognize that this settlement of the Claim is made without admission of liability on the part of the Province, nor admission of values by either party, and shall not be deemed to constitute an admission of liability on the part of the Province nor any recognition on the part of the Province of any legal obligation to pay compensation to MB.

b) In exchange for the lands and cutting rights referred to in the Claim, and in full and final satisfaction of it, the Province has agreed to transfer certain other lands and related rights having a value equal to the Settlement Amount, or to pay the Settlement Amount where such exchange is not feasible, in the manner and at the times provided for in this Agreement.

c) In consideration of the Province agreeing to the foregoing exchange, MB will release and discharge the Province from all liability with respect to the Claim.

d) Subject to the issuance of all approvals contemplated by subsection 9.1, the parties agree that the provisions of this Agreement are not confidential, and after fulfilment of the conditions precedent set forth in subsection 9.1, but not before, may be released by a party hereto to the public or to any other person.

 

5.1 In settlement of the Claim the Province will compensate MB by the various land transfers and administrative changes referred to in subsection 5.2, subject to the other provisions of this Agreement applicable to such transactions, by transferring lands and rights having an aggregate value equal to the Settlement Amount, together with interest at the rates set forth in this Agreement. To the extent that it has not been feasible to effect such land transfers and administrative changes with such aggregate value by October 31, 1999 (the "Payment Date"), the balance, if any, of the Settlement Amount and interest accrued to the Payment Date shall be paid in cash pursuant to subsections 5.6 and 5.7 of this Agreement.

5.2 The Settlement Amount, (together with interest thereon or on that part thereof which remains from time to time outstanding, from January 1, 1999 to the Payment Date) may be paid on or before the Payment Date, but not thereafter, by crediting to the Province on account of the Settlement Amount one or more of the following:

a) by value conferred on MB by the Province releasing, from TFL 39 and TFL 44, all or certain part or parts of the privately-owned lands identified as Schedule A lands in these TFLs (the "Schedule A Lands");

b) by value for the Province transferring to MB in fee simple, and outside of any tree farm licence ("TFL"), certain parts of the Vancouver Island Plantation lands, and by the Province removing certain parts of those Vancouver Island Plantation lands to be transferred to MB from the Forest Land Reserve before those lands are transferred to MB; and

c) by value for the Province transferring to MB in fee simple certain parts of the Schedule B lands within TFL 39 and TFL 44 (the "Schedule B Lands"), and by the Province removing certain parts of those Schedule B Lands to be transferred to MB from the Forest Land Reserve and from TFL 39 and TFL 44 as applicable, before those lands are transferred to MB.

5.3 The parties agree that the Payment Date may be changed:

a) at any time, and from time to time, by mutual agreement, in writing, of the parties; or

b) on one occasion by the Province, upon the Province notifying MB that it wishes to change the Payment Date to a date not later than 90 days (subject to adjustment pursuant to subsections 7.9 or 8.9) later than the Payment Date then in effect, provided that the following conditions shall have been met by June 30, 1999:

(i) the Province shall have completed its obligations with respect to the removal of the Schedule A Lands from TFL 39 and TFL 44, as set out in Section 6 of this Agreement;

(ii) the Province shall have delivered to MB a letter from the Minister or the Minister's delegate, identifying the VIP and Schedule B Lands that the Province is prepared to have appraised as contemplated by subsections 7.5 and 8.5 of this Agreement, in contemplation of disposition pursuant to this Agreement; and,

(iii) the Province shall have delivered to MB a letter from the Minister or the Minister's delegate, identifying the lands in respect of which the Minister is prepared to recommend removal from the Forest Land Reserve;

c) in the event that the Province elects to change the Payment Date as provided above, the Province shall notify MB in writing of this election not later than 15 days prior to the Payment Date.

5.4 Interest on the Settlement Amount (or that part thereof which remains from time to time outstanding) accruing between January 1, 1999 and the Payment Date (the "pre-Payment Date Interest") shall be calculated at the rate from time to time provided by, and in accordance with the terms of, the Court Order Interest Act for postjudgment interest. The foregoing calculation shall be subject to any adjustment pursuant to subsections 7.9 or 8.9 as applicable.

5.5 The pre-Payment Date Interest is to be paid by the Province to MB as follows:

a) With respect to a transfer of part of the Vancouver Island Plantation lands and the Schedule B Lands, 10% of the value of the Vancouver Island Plantation lands and the Schedule B Lands actually transferred to MB, shall be specifically allocated as being payment of Pre-Payment Date Interest (the "Interest Payment").

b) On the Payment Date, or so soon thereafter as is reasonably possible, the amount of pre-Payment Date Interest is to be calculated by the Province, and notice of this determination is to be provided forthwith to MB.

c) In the event that the Interest Payment exceeds the pre-Payment Date Interest, at MB's option MB will either pay to the Province, within 30 days of notification by the Province of the amount of pre-Payment Date Interest, the amount by which the Interest Payment exceeds the amount of pre-Payment Date Interest, or credit such excess amount to any unpaid balance of the Settlement Amount.

d) In the event that the Interest Payment is less than the pre-Payment Date Interest, the difference between the Interest Payment and the pre-Payment Date Interest will be added to, and form part of, the Settlement Amount, effective from the Payment Date.

e) If no part or parts of the Vancouver Island Plantation Lands and no part or parts of the Schedule B Lands are transferred to MB under this subsection 5.5 then the pre-Payment Date Interest shall, effective from the Payment Date, be added to and form part of the Settlement Amount, and be paid in accordance with the provisions for the payment of the Settlement Amount.

f) It is agreed that, notwithstanding the foregoing, any part of the pre-Payment Date Interest which accrues after October 31, 1999, shall be paid by the Province to MB in cash, by monthly instalments commencing on December 1, 1999 and continuing monthly thereafter until the Payment Date. Pre-Payment Date Interest accruing prior to November 1, 1999, is to be calculated and paid by the Province to MB by way of the Interest Payment, as set forth above.

5.6 In the event that the Settlement Amount has not been fully paid to MB by the Payment Date, the Province will pay to MB interest on that part of the Settlement Amount which is not paid on or before the Payment Date, as follows:

a) interest on the unpaid balance of the Settlement Amount outstanding from time to time ("the unpaid balance of the Settlement Amount") is to be computed monthly, commencing the day after the Payment Date;

b) the Province will pay interest on the unpaid balance of the Settlement Amount in arrears, by monthly cash instalments commencing on the first day of the month next following the Payment Date, and continuing monthly thereafter on the first day of each and every month until the outstanding balance of the Settlement Amount shall have been paid in full;

c) interest is to be calculated at the prime rate from time to time charged by the Canadian Imperial Bank of Commerce at Victoria, British Columbia on commercial loans to its most credit-worthy customers, plus 2% per annum; and,

d) interest which has accrued due and remains outstanding shall bear interest at the same rate applicable to the unpaid balance of the Settlement Amount.

5.7 If the unpaid balance of the Settlement Amount shall not have been fully paid by the Payment Date, the Province will pay the unpaid balance of the Settlement Amount as follows:

a) the unpaid balance of the Settlement Amount which is outstanding on the Payment Date is to be divided by 60. An amount ("the Instalment Amount") which is equal to the greater of:

(i) the quotient of the division specified in the first sentence of this paragraph; and,

(ii) $750,000 (Seven Hundred and Fifty Thousand dollars),

will then be paid by the Province to MB by monthly cash instalments on the first day of each month, commencing on the first day of the month after the month following the Payment Date and continuing until the unpaid balance of the Settlement Amount shall have been paid in full by the Province.

b) the obligation of the Province to pay interest on the unpaid balance of the Settlement Amount shall not be obviated by the Province making payments of the Instalment Amount;

c) the unpaid balance of the Settlement Amount shall be reduced each month in which the Instalment Amount is paid by the Province to MB, by the amount of the Instalment Amount;

d) interest, as provided in subsection 5.6, is to be computed on the reduced unpaid balance of the Settlement Amount, from time to time.

e) the Province may elect to pay all or any part, or any additional part or parts of the unpaid balance of the Settlement Amount, by way of a lump sum cash payment, cash balloon payment, or partial payment in cash, without notice, bonus, or penalty.

f) the Province may, at its option, at any time or from time to time, elect to increase the Instalment Amount. The Instalment Amount shall not be reduced at any time without the consent of MB.

 

6.1 The Schedule A Lands and any conditions attaching thereto will be identified by the parties as follows:

a) MB will, in consultation with the Province, prepare a list of those areas of the Schedule A Lands which MB wishes to have removed from TFL 39 and TFL 44 (the "MB Schedule A Lands") and deliver that list to the Province, prior to March 19, 1999;

b) no later than seven days from the date upon which MB delivers to the Province the list of MB Schedule A Lands, the Minister will deliver to MB a list of conditions which the Minister requires to be met with respect to all or any identified part or parts of the MB Schedule A Lands;

c) no later than four days from the date upon which the Minister delivers the list of the Schedule A conditions to MB, MB will deliver to the Province the final list of the MB Schedule A Lands and acceptable conditions (the "Schedule A Conditions"); and,

d) no later than 5:00 p.m. local time on March 31, 1999, the Minister or the Minister's delegate will deliver to MB written notice stating whether or not the Minister approves the final list of the MB Schedule A Lands and the Schedule A Conditions.

6.2 The MB Schedule A Lands (or such part or parts thereof as are removed from TFL 39 or TFL 44) shall be free and clear of all encumbrances save and except:

a) the exceptions and reservations, if any, in the existing grant from the Crown;

b) existing charges and notations registered or noted on title as at the date of this Agreement or created hereafter by MB;

c) the Schedule A Conditions; and

d) any conditions mutually agreed pursuant to subsection 14.8 prior to the completion of any appraisal pursuant to subsection 6.3;

all of which are hereinafter referred to as the "Schedule A Permitted Encumbrances".

6.3 On or before April 30, 1999 the Province and MB will jointly commission an independent appraisal to determine the value to MB of the removal of the MB Schedule A Lands from TFL 39 and TFL 44 (the "Schedule A Appraisal"). The Schedule A Appraisal is to be undertaken in accordance with the "Appraisal Conditions" stated in section 10 of this Agreement.

6.4 The parties shall instruct the appraiser to take into account the effect on the value to MB of any Schedule A Conditions, when preparing the Schedule A Appraisal.

6.5 Once determined, the Schedule A Appraisal shall be considered by each of the Province and MB in their sole respective discretion, notwithstanding any other provision of this Agreement. Each party will notify the other in writing, within ten days of receipt of the Schedule A Appraisal, as to whether or not that party accepts the Schedule A Appraisal with respect to all, some part or parts, or none, of the MB Schedule A Lands. In the event that both parties confirm that the Schedule A Appraisal is acceptable in relation to some or all of the MB Schedule A Lands, the Province will seek the relevant final approvals to permit the removal of those MB Schedule A Lands (the "Final Schedule A Lands"), as contemplated.

6.6 Unless the parties otherwise agree, if either the Province or MB rejects the Schedule A Appraisal, then the Schedule A Lands will not be removed from the TFLs, and the value to MB of the proposed removal of the Schedule A Lands will no longer be considered to be available as a means of payment by the Province on account of the Settlement Amount.

6.7 If the parties provide the joint confirmations under subsection 6.5 hereof, then:

a) MB will consent to the amendment of TFL 39 and TFL 44 to permit the removal of the Final Schedule A Lands therefrom, and the Minister will amend TFL 39 and TFL 44 to remove the Final Schedule A Lands therefrom. The parties will endeavour to complete the removal of the Final Schedule A Lands as contemplated herein, on or before June 30, 1999; and,

b) the value to MB of the removal of the Final Schedule A Lands specified in the confirmations shall be applied on account of the Settlement Amount.

6.8 If, notwithstanding the issuance of confirmations by the parties pursuant to subsection 6.5, the removal of the Final Schedule A Lands, as contemplated, is not completed by the Minister on or before the Payment Date, then none of the Final Schedule A Lands will be removed from the TFLs, and the value to MB of the proposed removal of the Final Schedule A Lands will not be available as a means of payment by the Province on account of the Settlement Amount.

6.9 If the Final Schedule A Lands are removed from the TFLs as contemplated by subsection 6.5 hereof, MB will within 21 days of the date upon which the last such removal is effective, deliver to the Minister MB's calculation for each TFL of the impact on the Allowable Annual Cut ("AAC") arising from the removal of the Final Schedule A Lands (the "Schedule A AAC Reductions") therefrom, calculated in a manner consistent with the base case forecasts of timber supply for each TFL made in support of the most recent determination of AAC by the Chief Forester under the Forest Act for that TFL. The calculation of Schedule A AAC Reductions is to be certified by a registered professional forester.

6.10 Within 10 days of MB providing to the Minister its calculation of the Schedule A AAC Reductions, the Minister will notify MB as to whether the Minister agrees to or disputes either or both of MB's calculations of the Schedule A AAC Reductions.

6.11 If the Minister disputes either or both of MB's calculations of the Schedule A AAC Reductions, the parties may by mutual agreement refer the matter to the Chief Forester appointed under the Forest Act, failing which the parties will refer the dispute to binding arbitration pursuant to the dispute resolution mechanism set out in section 15 (Dispute Resolution) of this Agreement. The arbitrator or arbitrators will then make a determination of the Schedule A AAC Reduction or Schedule A AAC Reductions, as required. It is agreed that the timings in section 15 shall not apply to a resolution of a dispute with respect to AAC under this subsection; however, the parties agree to make all reasonable efforts to advance the dispute resolution in a timely manner.

6.12 For each TFL, MB will consent to a temporary reduction in AAC for that TFL, for the period from the date upon which the Final Schedule A Lands is removed from that TFL to the last day upon which the current determination of AAC by the Chief Forester for that TFL shall be in effect. The Minister will temporarily reduce the AAC for that TFL, for this period. The reduction in AAC to which MB will consent, and which the Minister will impose, is to be in the amount of the Schedule A AAC Reduction for that TFL.

 

7.1 The "VIP Lands" and any conditions attaching thereto will be identified by the parties as follows:

a) MB will, in consultation with the Province, prepare maps of those areas of the Vancouver Island Plantation lands (the "VIP Lands") which MB agrees that it will accept (the "MB VIP Lands"), and deliver those maps and details of any current registered encumbrances required to be removed pursuant to paragraph 7.2(b) to the Province prior to March 19, 1999;

b) no later than seven days from the date upon which MB delivers the maps of the MB VIP Lands to the Province, the Minister will deliver to MB a list of conditions which the Minister requires to be met with respect to all or any identified part or parts of the MB VIP Lands, including any provisions or mechanisms referred to in subsection 7.7 of this Agreement;

c) no later than four days from the date upon which the Minister delivers the list of VIP conditions to MB, MB will deliver to the Province the final list of the MB VIP Lands and acceptable conditions (the "VIP Conditions"); and,

d) no later than 5:00 p.m. local time on March 31, 1999, the Minister or the Minister's delegate will deliver to MB written notice stating whether or not the Minister approves the final list of the MB VIP Lands, the VIP Conditions and encumbrances to be removed.

In this endeavour MB will identify those areas of the MB VIP Lands which:

(i) are to remain inside the Forest Land Reserve;

(ii) MB wishes to have removed from the Forest Land Reserve, but which MB will accept whether or not the removal thereof from the Forest Land Reserve is approved; and,

(iii) MB wishes to have removed from the Forest Land Reserve, and which MB will not accept unless the removal thereof from the Forest Land Reserve is approved.

7.2 The MB VIP Lands shall be free and clear of all encumbrances save and except:

a) the exceptions and reservations, if any, in the existing grant from the Crown, or, if to be newly granted, in a grant made in the ordinary course under subsection 50(1) , and without exception or reservation under subsection 50(4), of the Land Act, R.S.B.C. 1996, c.245;

b) existing charges and notations registered or noted on title as at the date of this Agreement or any existing sub-surface rights or interests, unregistered utility rights of way or easements or licences or approvals under the Water Act, R.S.B.C. 1996, c. 483, (except those specified by MB pursuant to paragraph 7.1(c) to be discharged prior to transfer) or created hereafter by MB;

c) the VIP Conditions; and

d) any conditions mutually agreed pursuant to subsection 14.8 prior to the completion of any appraisal under subsection 7.5.

all of which are hereinafter referred to as the "VIP Permitted Encumbrances".

7.3 The Minister will, at the Minister's sole discretion, select from among the MB VIP Lands, that part or those parts which are available for transfer to MB (the "Remaining VIP Lands") and notify MB.

7.4 The Province will have the Remaining VIP Lands surveyed at its own expense.

7.5 The fair market value of the Remaining VIP Lands is to be determined by an appraisal conducted by an independent appraiser in accordance with the Appraisal Conditions in this agreement (the "VIP Appraisal"). The appraiser is to provide:

a) with respect to those areas of the MB VIP Lands which MB wishes to remain inside the Forest Land Reserve, the fair market value of the fee simple of those areas, on the basis that those areas therein are not removed from the Forest Land Reserve before being transferred to MB in fee simple;

b) with respect to those areas of the MB VIP Lands which MB wishes to have removed from the Forest Land Reserve and which MB will accept whether or not those lands are removed from the Forest Land Reserve, two values for each area: the first value is to be the fair market value of the fee simple of the area, on the basis that the lands therein are not removed from the Forest Land Reserve before being transferred to MB in fee simple. The second value is to be the fair market value of the fee simple of the area, on the basis that the lands therein have been removed from the Forest Land Reserve before being transferred to MB in fee simple; and,

c) with respect to those areas of the MB VIP Lands which MB wishes to have removed from the Forest Land Reserve, and which MB will not accept unless the Provincial Cabinet approves removal from the Forest Land Reserve, the fair market value of the fee simple of the area, on the basis that the lands therein are removed from the Forest Land Reserve before being transferred to MB in fee simple.

7.6 The appraiser is to be instructed to determine all values as at January 1, 1999.

7.7 In consultation with MB, the Minister may, on or before March 26, 1999, require certain provisions and mechanisms for maintaining small business timber sales on the Remaining VIP Lands to be transferred to MB. Any such provisions and mechanisms are to be administered in accordance with the ordinary practice and procedures pertaining to the maintenance of the applicable program applied on a consistent basis and shall be applicable for a mutually agreeable period of time. For greater certainty, it is agreed that any conditions or mechanisms required by the Minister under this subsection shall, subject to paragraphs 7.1(b) and (c), be considered to be VIP Conditions for all purposes under this Agreement.

7.8 The parties shall instruct the appraiser to calculate the fair market values of the major blocks of the Remaining VIP Lands taking into account the VIP Permitted Encumbrances. Either party may, by written notice to the other given within seven (7) days of its receipt of the initial VIP Appraisal pursuant to subsection 10.4, elect to have a second such appraisal conducted; provided always that only one second appraisal shall be conducted and an election by the first of the parties to do so shall preclude the other from electing, or, if both have elected, the first notice of election given shall govern. If either party so elects, the second appraisal shall be conducted forthwith and shall be at the expense of the party electing. A copy of such second appraisal shall be given to the other party forthwith upon receipt pursuant to subsection 10.4. If the market values indicated in the second appraisal are within 10% of the values indicated in the first appraisal, whether higher or lower, the values shall be deemed to be the average of the two appraisals. If the values in the second appraisal vary from the first by more than 10% of those first values, then unless otherwise agreed, the final appraised value shall be determined by arbitration pursuant to section 15 of this Agreement. The final value after taking into account any second appraisal or arbitration in accordance with the foregoing provisions shall be determined to be the "VIP Appraisal" for the balance of this Agreement.

7.9 The calculation of pre-Payment Date Interest pursuant to subsection 5.4, and the latest date to which the "Payment Date" can be extended pursuant to paragraph 5.3(b), shall each be subject to adjustment deriving from the request for and result of any second appraisal requested pursuant to subsection 7.8 as follows:

a) if MB requested the second appraisal and the market values indicated in the second appraisal are higher than those in the first appraisal, pre-Payment Date Interest shall be waived in respect of the period (the "Second Appraisal Period") commencing on the date of request for the second appraisal and ending on the date upon which that appraisal is submitted to the parties; and,

b) if the Province requested the second appraisal and the market values indicated in the second appraisal are lower than those indicated in the first appraisal, then:

(i) pre-Payment Date Interest for the Second Appraisal Period shall be calculated at the rate set forth in paragraph 5.6(c) for that period; and,

(ii) the latest date to which the Payment Date can be extended pursuant to paragraph 5.3(b) shall be changed to Tuesday, November 30, 1999 regardless of whether or not the Province has previously exercised its election in that regard.

7.10 With respect to those areas of the Remaining VIP Lands which MB shall have previously identified as being lands which it will accept whether or not the Lieutenant Governor in Council approves removal thereof from the Forest Land Reserve, and within 14 days of receipt of the VIP Appraisal, MB will notify the Province of those areas thereof which are to remain in the Forest Land Reserve prior to transfer to MB, and those areas of the Remaining VIP Lands which MB wishes the Province to remove from the Forest Land Reserve prior to transfer to MB.

7.11 Once the VIP Appraisal has been determined pursuant to subsection 7.8, within 21 days of the receipt of the VIP Appraisal, the Minister will notify MB of his intention to proceed with the next steps prior to the transfers to MB of the Remaining VIP Lands, and related Forest Land Reserve removals, in whole or in part. If the Minister determines not to proceed with such transfers then the Remaining VIP Lands will not be transferred to MB, and the value to MB of the proposed transfer of the Remaining VIP Lands will no longer be considered to be available as a means of payment by the Province on account of the Settlement Amount.

7.12 If the Minister notifies MB of intention to proceed with the transfer to MB of the Remaining VIP Lands or some part or parts thereof, as contemplated, then, on or before the Payment Date:

a) the Province will forthwith cause the part or parts of the Remaining VIP Lands the removal of which from the Forest Land Reserve has been approved, to be removed from the Forest Land Reserve;

b) the Province will cause the Remaining VIP Lands or such part or parts thereof as have been approved for transfer to MB, to be granted or conveyed to MB under the Land Act free and clear of all encumbrances save and except the VIP Permitted Encumbrances; and,

c) concurrently with the transfer of the Remaining VIP Lands or part or parts thereof, the Province will be credited with the appraised value of the areas of the Remaining VIP Lands transferred to MB, as payment on account of the Settlement Amount and applicable interest.

7.13 If, notwithstanding the notification by the Minister of intention to proceed with such transfers pursuant to subsection 7.11, the transfer to MB of the balance of the Remaining VIP Lands, or the part or parts thereof, to be transferred to MB has not been completed, or is completed only as to certain areas, on or before the Payment Date, the value to MB of the Remaining VIP Lands not so transferred on or before the Payment Date will not be considered to have been a payment by the Province on account of the Settlement Amount, and no further part of the Remaining VIP Lands will be transferred to MB.

 

8.1 The Schedule B Lands and any conditions attaching thereto will be identified by the parties as follows:

a) MB will, in consultation with the Province, prepare maps of those areas of the Schedule B Lands which MB wishes to have removed from TFL 39 and TFL 44 (the "MB Schedule B Lands") and deliver these maps and details of any current registered encumbrances required to be removed pursuant to paragraph 8.2(b) to the Province prior to March 19, 1999;

b) no later than seven days from the date upon which MB delivers to the Province the maps of MB Schedule B Lands, the Minister will deliver to MB a list of conditions which the Minister requires to be met with respect to all or any identified part or parts of the MB Schedule B Lands;

c) no later than four days from the date upon which the Minister delivers the list of the Schedule B conditions, MB will deliver to the Province the final list of the MB Schedule B Lands and acceptable conditions (the "Schedule B Conditions"); and,

d) no later than 5:00 p.m. local time on March 31, 1999, the Minister or the Minister's delegate will deliver to MB written notice stating whether or not the Minister approves the final list of the MB Schedule B Lands, the Schedule B Conditions and encumbrances to be removed.

In this endeavour, MB will identify those areas of the Schedule B Lands which:

(i) are to remain inside the Forest Land Reserve;

(ii) MB wishes to have removed from the Forest Land Reserve, but which MB will accept whether or not the removal thereof from the Forest Land Reserve is approved; and,

(iii) MB wishes to have removed from the Forest Land Reserve, and which MB will not accept unless the removal thereof from the Forest Land Reserve is approved.

8.2 The MB Schedule B Lands (or such part or parts thereof as are transferred to MB and removed from TFL 39 or TFL 44) shall be free and clear of all encumbrances save and except:

a) the exceptions and reservations, if any, in the existing grant from the Crown, or, if to be newly granted, in a grant made in the ordinary course under subsection 50(1), and without exception or reservation under subsection 50(4), of the Land Act;

b) existing charges and notations registered or noted on title as at the date of this Agreement (except those specified by MB pursuant to paragraph 8.1(c) to be discharged prior to transfer);

c) the Schedule B Conditions; and,

d) any conditions mutually agreed pursuant to subsection 14.8 prior to the completion of any appraisal pursuant to subsection 8.6;

all of which are hereinafter referred to as the "Schedule B Permitted Encumbrances".

8.3 Once the Schedule B Lands and the Schedule B Conditions have been identified by the parties, the Minister will carry out a review and assessment of the usage of these lands and such public consultation as the Province considers advisable, and the Province will take reasonable steps to determine that the transactions contemplated by this Agreement for the Schedule B Lands can be completed. If the transactions contemplated by this Agreement for the Schedule B Lands cannot be completed, or can only be completed as to certain areas, the value to MB of the Schedule B Lands which cannot be so completed will not constitute part of the Settlement Amount, and no part of the Schedule B Lands, other than those authorized for such completion, will be transferred to MB.

8.4 Upon completion of the review and assessment of the Schedule B Lands, the Minister will, at his or her sole discretion, select from among the Schedule B Lands, that area or those areas which are available for transfer to MB (the "Remaining Schedule B Lands") and notify MB.

8.5 The Province will have the Remaining Schedule B Lands surveyed at its own expense.

8.6 The fair market value of the Remaining Schedule B Lands, and of MB's existing interest in them ("MB's Existing Rights"), is to be determined by an appraisal conducted by an independent appraiser in accordance with the Appraisal Conditions in this agreement (the "Schedule B Appraisal"). The appraiser is to provide:

a) with respect to those areas of the Remaining Schedule B Lands which MB wishes to remain inside the Forest Land Reserve, the fair market value of the fee simple of those areas, on the basis that those areas therein are not removed from the Forest Land Reserve before being transferred to MB in fee simple;

b) with respect to those areas of the Remaining Schedule B Lands which MB wishes to have removed from the Forest Land Reserve and which MB will accept whether or not these lands are removed from the Forest Land Reserve, two values for each area: the first value is to be the fair market value of the fee simple of the area, on the basis that the lands therein are not removed from the Forest Land Reserve before being transferred to MB in fee simple. The second value is to be the fair market value of the fee simple of the area, on the basis that the lands therein have been removed from the Forest Land Reserve before being transferred to MB in fee simple;

c) with respect to those areas of the Remaining Schedule B Lands which MB wishes to have removed from the Forest Land Reserve, and which MB will not accept unless the Provincial Cabinet approves removal from the Forest Land Reserve, the fair market value of the fee simple of the area, on the basis that the lands therein are removed from the Forest Land Reserve before being transferred to MB in fee simple;

d) with respect to MB's Existing Rights, the fair market value; and,

e) the difference between the values in paragraphs 8.6(a)-(c), inclusive, and the values in paragraph 8.6(d) for the same areas, such difference to constitute the incremental value to MB of the transactions contemplated by this Section 8 (the "Incremental Values").

8.7 The appraiser is to be instructed to determine all values as at January 1, 1999.

8.8 The parties shall instruct the appraiser to calculate the fair market values of the Remaining Schedule B Lands taking into account the Schedule B Permitted Encumbrances. Either party may, by written notice to the other given within seven (7) days of its receipt of the initial Schedule B Appraisal pursuant to subsection 10.4, elect to have a second such appraisal conducted; provided always that only one second appraisal shall be conducted and an election by the first of the parties to do so shall preclude the other from electing, or, if both have elected, the first notice of election given shall govern. If either party so elects, the second appraisal shall be conducted forthwith and shall be at the expense of the party electing. A copy of such second appraisal shall be given to the other party forthwith upon receipt pursuant to subsection 10.4. If the market Incremental Values indicated in the second appraisal are within 10% of the values indicated in the first appraisal, whether higher or lower, the values shall be deemed to be the average of the two appraisals. If the Market Incremental Values in the second appraisal vary from the first by more than 10% of those first values, the final appraised value shall be determined by arbitration pursuant to section 15 of this Agreement. The final Incremental Values after taking into account any second appraisal or arbitration in accordance with the foregoing provisions shall be determined to be the "Schedule B Appraisal" for the balance of this Agreement.

8.9 The calculation of pre-Payment Date Interest pursuant to subsection 5.4, and the latest date to which the "Payment Date" can be extended pursuant to paragraph 5.3(b), shall each be subject to adjustment deriving from the request for and result of any second appraisal requested pursuant to subsection 8.8 as follows:

a) if MB requested the second appraisal and the market Incremental Value indicated in the second appraisal is higher than that in the first appraisal, pre-Payment Date Interest shall be waived in respect of the period (the "Second Appraisal Period") commencing on the date of request for the second appraisal and ending on the date upon which that appraisal is submitted to the parties; and,

b) if the Province requested the second appraisal and the market Incremental Value indicated in the second appraisal is lower than that indicated in the first appraisal, then:

(i) pre-Payment Date Interest for the Second Appraisal Period shall be calculated at the rate set forth in paragraph 5.6(c) for that period; and,

(ii) the latest date to which the Payment Date can be extended pursuant to paragraph 5.3(b) shall be changed to Tuesday, November 30, 1999 regardless of whether or not the Province has previously exercised its election in that regard.

8.10 With respect to those areas of the Remaining Schedule B Lands which MB shall have previously identified as being lands which it will accept whether or not the Lieutenant Governor in Council approves removal thereof from the Forest Land Reserve, within 14 days of receipt of the Schedule B Appraisal MB will notify the Province of those areas thereof which are to remain in the Forest Land Reserve prior to transfer to MB, and those areas of the Remaining Schedule B Lands which MB wishes the Province to remove from the Forest Land Reserve prior to transfer to MB.

8.11 Once the Schedule B Appraisal has been determined pursuant to subsection 8.8, within 21 days of the receipt of the Schedule B Appraisal, the Minister will notify MB of their intention to proceed with the transfer of the Remaining Schedule B Lands, and the related Forest Land Reserve removals, in whole or in part. If the Minister determines not to proceed with such transfers then the Remaining Schedule B Lands will not be transferred to MB, and the value to MB of the proposed transfer of the Remaining Schedule B Lands will no longer be considered to be available as a means of payment by the Province on account of the Settlement Amount.

8.12 If the Minister notifies MB of intention to proceed with the transfer to MB of the Remaining Schedule B Lands or some part or parts thereof, as contemplated, then, on or before the Payment Date:

a) MB will consent to the amendment of TFL 39 and TFL 44 to permit the removal of the Remaining Schedule B Lands therefrom and the Minister will amend TFL 39 and TFL 44 to remove the Remaining Schedule B Lands therefrom;

b) the Province will forthwith cause the part or parts of the Remaining Schedule B Lands, the removal of which from the Forest Land Reserve has been approved, to be removed from the Forest Land Reserve;

c) the Province will cause the Remaining Schedule B Lands or such part or parts thereof as have been approved for transfer to MB, to be granted or conveyed to MB under the Land Act free and clear of all encumbrances save and except the Schedule B Permitted Encumbrances; and,

d) concurrently with the transfer of the Remaining Schedule B Lands or part or parts thereof, the Province will be credited with the Incremental Values of the areas of the Schedule B Lands transferred, as payment on account of the Settlement Amount and applicable interest.

8.13 If the Remaining Schedule B Lands are removed from the TFLs as contemplated by subsection 8.12 hereof, MB will within 21 days of the date upon which the last such removal is effective, deliver to the Minister MB's calculation for each TFL of the impact on the AAC arising from the removal of the Remaining Schedule B Lands (the Schedule B AAC Reductions") therefrom, calculated in a manner consistent with the base case forecasts of timber supply for each TFL made in support of the most recent determination of AAC by the Chief Forester under the Forest Act for that TFL. The calculation of Schedule B AAC Reductions is to be certified by a registered professional forester.

8.14 Within 10 days of MB providing to the Minister its calculation of the Schedule B AAC Reductions, the Minister will notify MB as to whether the Minister agrees to or disputes either or both of MB's calculations of the Schedule B AAC Reductions.

8.15 If the Minister disputes either or both of MB's calculations of the Schedule B AAC Reductions, the parties may by mutual agreement refer the matter to the Chief Forester appointed under the Forest Act, failing which the parties will refer the dispute to binding arbitration pursuant to the dispute resolution mechanism set out in section 15 (Dispute Resolution) of this Agreement. The arbitrator or arbitrators will then make a determination of the Schedule B AAC Reduction or Schedule B AAC Reductions, as required. It is agreed that the timings in section 15 shall not apply to a resolution of a dispute with respect to AAC under this subsection; however, the parties agree to make all reasonable efforts to advance the dispute resolution in a timely manner.

8.16 For each TFL, MB will consent to a temporary reduction in AAC for that TFL, for the period from the date upon which the Remaining Schedule B Lands are removed from that TFL to the last day upon which the current determination of AAC by the Chief Forester for that TFL shall be in effect. The Minister will temporarily reduce the AAC for that TFL, for this period. The reduction in AAC to which MB will consent, and which the Minister will impose, is to be in the amount of the Schedule B AAC Reduction for that TFL.

8.17 It is agreed that any reduction of AAC under this section with respect to the removal of the Remaining Schedule B Lands from the TFLs is in addition to any AAC reduction arising from the removal of Schedule A Lands from the TFLs under section 6 of this Agreement.

8.18 If, notwithstanding the notification by the Minister of intention to proceed with such transfers pursuant to subsection 8.11, the transfer to MB of the balance of the Remaining Schedule B Lands, or part or parts thereof, to be transferred to MB has not been completed, or is completed only as to certain areas, on or before the Payment Date, the value to MB of the Remaining Schedule B Lands not so transferred on or before the Payment Date will not be considered to have been a payment by the Province on account of the Settlement Amount, and no further part of the Remaining Schedule B Lands will be transferred to MB.

 

9.1 The rights and obligations of the parties under this agreement are subject to the following conditions precedent being fulfilled on or before the times stated:

a) the Treasury Board of the Province of British Columbia ("Treasury Board") shall have approved this Agreement and the implementation of the transactions hereby contemplated and written confirmation of such Treasury Board approval shall have been delivered to MB by the Minister or the Minister's delegate before 5:00 p.m. local time on March 19, 1999 (the "Approval Date");

b) the Board of Directors of MB shall have approved this Agreement, and written confirmation of such approvals shall have been given to the Minister before 5:00 p.m. local time on the Approval Date; and,

c) the Minister or the Minister's delegate shall have delivered to MB, before 5:00 p.m. local time on March 31, 1999 (the "Land Report Date"), written notices pursuant to one or more of paragraphs 6.1(d), 7.1(d) and 8.1(d), approving one or more of the final lists of the MB Schedule A Lands, the MB VIP Lands and the MB Schedule B Lands and their respective Conditions.

These conditions are acknowledged by the parties to constitute true conditions precedent and may not be waived by either party acting unilaterally.

9.2 Unless each of the conditions precedent set forth above in subsection 9.1 shall have been performed or fulfilled and the party performing or fulfilling the condition precedent shall have notified the other party of the performance or fulfilment of each such condition on or before the time specified therein, the following terms apply:

a) the balance of this Agreement shall be of no further force or effect;

b) MB shall be free to pursue the Claim in the Supreme Court of British Columbia;

c) MB shall be free to pursue arbitration of its claim under the Notice of Arbitration;

d) the Province shall not be deemed to have admitted any liability to MB arising from the creation of parks or ecological reserves, whatsoever; and

e) this agreement shall be regarded as confidential and without prejudice, and neither party may enter into evidence, or make any reference to this Agreement, or the negotiations leading to this Agreement, in prosecuting or defending the Claim or in the arbitration proceedings taken pursuant to the Notice of Arbitration.

 

10. Wherever in this agreement it is stated that lands are to be appraised, the following terms and conditions ("the Appraisal Conditions") shall apply.

10.1 The appraiser to undertake the appraisal of lands or of an interest in lands, will be selected by mutual consent of the parties.

10.2 The costs of the appraiser are to be borne by the Province, unless otherwise specified in this agreement or previously agreed by the parties.

10.3 The terms of reference, conditions, and instructions to the appraiser shall be mutually acceptable to the parties. Any differences shall be resolved pursuant to section 15.

10.4 The report of the appraiser is to be made in writing, in duplicate. The appraiser is to deliver to each party one copy of the appraisal report.

10.5 In the appraisal report, the appraiser is to state or include:

a) all underlying assumptions made by the appraiser;

b) all limiting factors which affect the opinion of the appraiser;

c) a description of the lands or the interest in lands which is the subject of the appraisal report;

d) the appraiser’s opinion as to the fair market value, or increment in value to MB as the case may be, of the lands or the interest in lands;

e) the certification of the appraiser.

10.6 If any second appraisal is requested pursuant to subsection 7.8 or 8.8 such appraisal shall be conducted on the same terms of reference and with the same information as was provided by the parties to the first appraiser for the initial appraisal. No information gathered, generated or disseminated to the parties by the first appraiser is to be provided to the second appraiser.

10.7 The parties agree that each will make available to the appraiser, in a timely fashion, all information which is reasonably necessary to enable the appraiser to arrive at an opinion of the fair market value of the lands or interest in lands to be appraised. All information provided by a party to the appraiser shall be provided to the other party simultaneously.

10.8 All information provided by other party to an appraiser will be treated as confidential and may not be disclosed nor used or referred to in any other matter or proceeding by any party other than the party originally providing such information to the appraiser. The parties will instruct each appraiser to maintain such confidentiality. All such information shall be returned to the originating party forthwith on request following issuance of the relevant appraisal.

 

11.1 MB represents and warrants to the Province, and acknowledges that the Province is relying on such representations and warranties in entering into this agreement and the transactions contemplated by it, that:

a) MB is a duly continued, organized and validly subsisting corporation pursuant to the Canada Business Corporations Act; has been duly registered as an extra-provincial corporation under the British Columbia Company Act; is in good standing under both statutes; and has the corporate power and capacity to carry on business as now being conducted by it and to carry out the transactions contemplated by this agreement; and,

b) MB has all necessary corporate power and authority to enter into this agreement and to carry out its obligations hereunder and, subject only to the resolution referred to in paragraph 9.1 (b), the execution and delivery of this agreement and the implementation of the transactions contemplated hereunder have been duly authorized by all necessary corporate action on its part.

11.2 Without in any manner limiting the Province's obligations under section 14.5 hereof, the Province represents and warrants to MB, and acknowledges that MB is relying on such representations and warranties in entering into this agreement and the transactions contemplated by it, that:

a) the Minister and the Province have respectively full power and authority to enter into this agreement and to carry out their respective obligations hereunder;

b) subject only to the approvals referred to in paragraph 9.1(a), the execution and delivery of this agreement and the implementation of the transactions contemplated hereunder have been duly authorized by all necessary legislative, executive and regulatory action on its part; and,

c) all Remaining VIP Lands and Remaining Schedule B Lands transferred to MB hereunder, and MB's title to the Final Schedule A Lands after removal from the TFLs, shall in each case be free and clear of all encumbrances save and except the respective Permitted Encumbrances contemplated by this Agreement.

 

12.1 The parties agree that each will perform all additional deeds, give such additional assurances, and in every respect do all other acts as are required or reasonably necessary or desirable to fully implement the intention of this agreement.

13.1 Any notice contemplated by this agreement, to be effective, must be in writing and either:

a) sent by fax to the addressee's fax number specified in this agreement,

b) delivered by hand to the addressee's address specified in this agreement, or

c) mailed by prepaid registered mail to the addressee's address specified in this agreement.

13.2 Any notice mailed in accordance with subparagraph (c) above shall be deemed to have been received 72 hours after mailing. Either of the parties may give notice to the other of a substitute address or fax number from time to time.

13.3 The address and fax number for the delivery of notices on the Province shall be:

Minister of Forests

4th Floor, 595 Pandora Avenue

Victoria, B.C.

V8W 1N5

(Facsimile: (250) 387-7065

Attention: Bruce McRae, Assistant Deputy Minister

13.4 The address and fax number for the delivery of notices to MB shall be:

MacMillan Bloedel Limited

925 West Georgia Street

Vancouver, B.C.

V6C 3L2

(Facsimile: (604) 687-2314)

Attention: Corporate Secretary

 

14.1 The parties may by a further written agreement, amend this agreement. No amendment shall be binding unless made in writing and executed by both parties hereto.

14.2 This agreement may be executed in counterparts.

14.3 The schedules to this agreement are part of this agreement.

14.4 There are no other agreements, contracts, representations or warranties made or given by either party to the other with respect to the subject matter of this agreement, other than the terms and conditions contained herein. There are no collateral agreements (whether written or oral), oral agreements, oral representations, or warranties which form part of this agreement or which in any way affect or alter the rights and obligations of the parties to this agreement.

14.5 The Province agrees that where, under this agreement, ownership of land is transferred to MB by the Province, whether by conveyance or by Crown Grant, MB shall thereby acquire marketable title in fee simple thereto, subject only to the respective Permitted Encumbrances as herein specified (and any rights, title or interest derived through or granted by MB) and that, for certainty, MB's title shall thereupon be free and clear of, and in priority to, all encumbrances, rights and interests in respect of or on the land whatsoever, including, for certainty, free and clear of, and in priority to, any claim on, interest in or title to the land that encumbers the Province's title thereto prior to the transfer thereof to MB whether granted by the Province or arising or existing as a matter of the general law and whether known or unknown at the time of transfer of the land to MB, except for the respective Permitted Encumbrances as herein specified (and any right, title or interest derived through or granted by MB). Without limiting the generality of the foregoing "free and clear of encumbrances" wherever used shall also mean that the lands are not included by operation of law or otherwise in any TFL save and except with any written consent of MB given from time to time after transfer.

14.6 It is agreed that any liability for property transfer tax payable under the Property Transfer Tax Act, R.S.B.C. 1996, c. 378, with respect to any land or interest in land conveyed or granted to MB, is the responsibility of the Province. If any such amount is required to be paid in order to record any such transfers in any office of public record, including the Victoria Land Title Office, the Province will place MB in funds for such purpose or otherwise provide for the payment of that tax on a timely basis concurrently with such transfer. For greater certainty the Settlement Amount is to be received by MB in full and net of any and all exigible taxes, levies, fees or charges under any applicable legislation, save and except income taxes and corporation capital tax.

14.7 For the purposes of assisting the evaluation and consideration of the various properties which are referred to in this Agreement, each of the parties shall provide to the other reasonable access to the MB Schedule A Lands, the MB VIP Lands and the Schedule B Lands from time to time for the purposes of inspecting, testing and evaluating such lands. Each party may extend access to their duly authorized consultants, advisers and appraisers provided written notification of the identity and proposed periods of access are first given to the other party. Each party having access to lands of the other party shall be fully responsible for the repair of any and all damage or disturbance caused thereby. All such access shall be conducted so as to minimize disturbance with normal activities and business operations being conducted on those lands.

14.8 If subsequent to the Land Report Date the Province, in consultation with persons having a material interest, identifies a bona fide need to accommodate the interests of such persons by an additional condition or conditions pertaining to the Final Schedule A Lands, the Remaining VIP Lands or the Remaining Schedule B Lands, the Province, in consultation with MB, may develop and request such additional conditions. MB will not unreasonably withhold or delay its consent to any such requested conditions. If MB is unable to accept such a requested condition the Province will either rescind the request for the condition or delete the areas of lands to which the condition would relate from the areas to be transferred to MB or released from the TFLs, as the case may be. Provided always that any and all such requested conditions must be requested on a timely basis and conclusively determined, prior to the completion of the relevant Appraisal pursuant to section 6, 7 or 8, respectively, so as to permit such Appraisal to take into account the effect of any and all such conditions on the values reported on in the Appraisal. No such conditions may be requested after a time by which they could not be properly reflected in the respective Appraisal.

14.9 Notwithstanding any other provision of this Agreement, the payment of money by the Province to MB under this Agreement is subject to:

a) there being sufficient monies available in an Appropriation, as defined in the Financial Administration Act, R.S.B.C. 1996, Chapter 138, to enable the Province, in any fiscal year or part thereof when any payment of money by the Province to MB falls due under this Agreement, to make that payment; and

b) Treasury Board, as defined in the Financial Administration Act, not having controlled or limited, under the Financial Administration Act, expenditure under any Appropriation referred to in subsection (a) of this section.

14.10 MB is registered with Revenue Canada, Excise, for the purposes of collection of Goods and Services Tax under the Excise Tax Act of Canada and agrees to account to Revenue Canada in respect of all transactions pursuant to this Agreement on which such tax is exigible.

 

15.1 The parties agree that, where this Agreement requires disputes to be resolved pursuant to this section, or, in the event that the parties cannot agree on an appraiser, or cannot agree on the terms of reference, conditions, and instructions to the appraiser, or if second appraisal values require reconciliation pursuant to subsections 7.8 or 8.8, the following provisions shall apply to the resolution of the dispute:

a) either party may within 48 hours of a failure to agree give written notice (a "DR Notice") to the other of the dispute which the party giving notice wishes to have resolved using this dispute resolution procedure;

b) the Province and MB will meet within two days of receipt of a DR Notice, and will attempt to resolve the dispute described in the notice;

c) unless the parties otherwise agree, if the dispute is not resolved within two days of the date of the first meeting under paragraph (b), then the dispute will be referred to and finally resolved by arbitration under the Commercial Arbitration Act.

15.2 The place of arbitration will be Victoria, British Columbia.

15.3 The parties will endeavour to have the arbitration conducted in a timely manner. In any event, the arbitrators shall be instructed to have the arbitration decision made and reported within 14 days of delivery of a notice to arbitrate.

 

IN WITNESS WHEREOF the parties have executed this Agreement on the day, month and year above-mentioned.

SIGNED on behalf of Her Majesty

the Queen in Right of the

Province of British Columbia by an

authorized representative

of the Minister of Forests

in the presence:

 

Witness

 

)

)

)

)

)

)

)

)

)

)

)

 

 

 

For the Minister of Forests

 

The common seal of MacMillan Bloedel Limited was hereunto affixed in the presence of:

Authorized Signatory

Title

)

)

)

)

)

)

)

)

)

)

 

 

 

 

 

 

C/S

SCHEDULE "A"

RELEASE

 

 

 

SCHEDULE "B"

AGREEMENT TO TERMINATE ARBITRATION

 

 

 

SCHEDULE "C"

DOCUMENTS TO BE TABLED AT CLOSING

DOCUMENT

TABLED BY

1. Settlement Agreement

MB

2. Release (duly executed)

MB

3. Settlement Agreement

Province

4. Agreement to Terminate Arbitration

MB

5. Agreement to Terminate Arbitration

Province

6. Certified copy of Board Resolution

MB

7. Opinion of counsel to MB (Sched. E)

MB

8. Opinion of counsel to Province (Sched. F)

Province

9. Consent Order (Sched. G)

MB

 

 

 

SCHEDULE "D"

DOCUMENTS TO BE DELIVERED AT CLOSING

DOCUMENT

DELIVERED BY

DELIVERED TO

1. Release

MB

Province

2. Consent Order

MB

Province

3. Settlement Agreement

MB

Province

4. Settlement Agreement

Province

MB

5. Agreement to Terminate Arbitration

MB

Province

6. Agreement to Terminate Arbitration

Province

MB

7. Board Resolution

MB

Province

8. MB counsel opinion

MB

Province

9. Province counsel opinion

Province

MB

SCHEDULE "E"

 

FORM OF MB COUNSEL OPINION

SCHEDULE "F"

 

FORM OF PROVINCE'S COUNSEL OPINION

SCHEDULE "G"

Form 56A (Rule 41(13), (16) and (16.3))

Reviewed August, 1998

No. A972476

Vancouver Registry

IN THE SUPREME COURT OF BRITISH COLUMBIA

IN THE MATTER OF THE FOREST ACT, R.S.B.C. 1996, c. 157

AND IN THE MATTER OF THE PARK ACT, R.S.B.C. 1996 c. 344

AND IN THE MATTER OF ARBITRATIONS PURSUANT TO THE

COMMERCIAL ARBITRATION ACT, R.S.B.C. 1996, c. 55

BETWEEN:

MACMILLAN BLOEDEL LIMITED

PETITIONER

AND:

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA, THE ATTORNEY GENERAL OF BRITISH COLUMBIA

RESPONDENTS

 

ORDER

 

BEFORE A REGISTRAR

)

)

)

, THE DAY

OF MARCH, 1999.

 

ON THE APPLICATION of the Petitioner, without a hearing and, by consent.

THIS COURT ORDERS that the within proceedings be dismissed without costs to any party.

AND THIS COURT FURTHER ORDERS that the said dismissal shall be for all purposes of the same force and effect as if a Judgment dismissing the action had been pronounced after a trial of the action upon the merits.

 

DISTRICT REGISTRAR

 

 

 

 

CONSENTED TO:

Counsel for the Petitioner

 

 

Counsel for the Respondents

 

 

 

Proceed through this document using ALT C No. A972476

Vancouver Registry

IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:

MACMILLAN BLOEDEL LIMITED

PETITIONER

AND:

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA, THE ATTORNEY GENERAL OF BRITISH COLUMBIA

RESPONDENTS

CONSENT DISMISSAL ORDER

RUSSELL & DuMOULIN

Barristers & Solicitors

2100 - 1075 West Georgia Street

Vancouver, B.C., V6E 3G2

631-3131

Counsel: D.G.S. RAE, Q.C.

Matter No: MBL-23810