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Watershed Protection Covenant

 NOW THEREFORE THIS RESTRICTIVE COVENANT WITNESSETH that in consideration of the premises and of the sum of Ten Dollars ($10.00) now paid by the Transferee to the Transferor (the receipt and sufficiency of which is acknowledged by the Transferor), the parties hereto covenant and agree as follows:

1. Hereafter the Transferor will:

(a) establish a formal relationship with each Licensed Water Purveyor pursuant to which the Transferor must:

(i) conduct its future Forest Practices so as not to materially and negatively impact on the water quality in the applicable Drainage of the Licensed Water Purveyor existing at the date of this Restrictive Covenant; and,

(ii) where deemed necessary by the Transferor after a Licensed Water Purveyor consults with the Transferor, amend the Transferor’s planned Forest Practices so as not to materially and negatively impact the water quality referred to in paragraph (a);

(b) maintain the formal relationship referred to in paragraph (a); and

(c) employ a professional forest hydrologist ("Hydrologist") to regularly evaluate the Transferor’s past and future Forest Practices for the Lands which may materially and negatively impact on the water quality referred to in paragraph (a) and, where and when recommended by the Hydrologist, implement such recommendation or recommendations for the Transferor’s planned Forest Practices in the Lands for the applicable Drainage so as not to materially and negatively impact on the water quality referred to in paragraph (a).

2. The Transferor does not represent or warrant to the Province or any other party, including without limitation, any Licensed Water Purveyor that the water quality in each Drainage is or will be safe or fit for human consumption by virtue of this Restrictive Covenant or anything contained in this Restrictive Covenant or the observance or performance by the Transferor of its obligations set out in section 1, and the Transferee covenants and agrees not to claim damages from the Transferor if the water quality is not so fit or safe for human consumption by reason of environmental factors or acts, acts of God or acts or negligence of third parties including, without limitation, trespassers or any Licensed Water Purveyor, beyond the reasonable control of the Transferor.

3. If any provision of this Restrictive Covenant is at any time unenforceable or invalid for any reason it will be severable from the remainder of this Restrictive Covenant and, in its application at that time, this Restrictive Covenant will be construed as though such provision was not contained herein and the remainder will continue in full force and effect and be construed as if this Restrictive Covenant had been executed without the invalid or unenforceable provision.

4. This Restrictive Covenant is enforceable against the Transferor and the successors in title of the Transferor even if this Restrictive Covenant is not annexed to any land owned by the Transferee or signed by any successor in title to the Transferor.

5. The Transferor or its successor in title, as the case may be, is not liable for a breach of this Restrictive Covenant occurring after the Transferor or its successor in title, as the case may be, has ceased to be the registered owner of the Lands.

6. The Transferee agrees that if the Province of British Columbia enacts and brings into force any Act or regulation ("New Law") relating to both the Lands and the subject of this Restrictive Covenant such that the New Law renders this Restrictive Covenant as unnecessary and redundant, then the Transferee shall, upon demand of the Transferor, forthwith at the Transferee’s expense, release and discharge this Restrictive Covenant.

7. Notwithstanding anything contained in this Restrictive Covenant to the contrary, the Transferor and Transferor agree that:

(a) this Restrictive Covenant, the terms of this Restrictive Covenant and the registration of the Restrictive Covenant in the Victoria Land Title Office applies only to the Portions Within and shall not apply to the remaining portions ("Non-Watershed Portions") of the Lands Partially Within;

(b) the boundary between the Portions Within and the Non-Watershed Portions is the height of land and/or direction of drainage into either the Drainage or the Non-Watershed Portions, as the case may be;

(c) in accordance with the provisions of paragraphs 7(a) and 7(b):

(i) the Transferor may, from time to time and at any time hereafter, prepare a plan or plans acceptable to the appropriate land title office and acceptable to the Transferee, acting reasonably, to define the boundary between the Portions Within and the Non-Watershed Portions and file the approved plan in the appropriate land title office;

(ii) the Transferee will, at the request of the Transferor from time to time and at any time hereafter, execute and deliver to the Transferor a registrable release of this Restrictive Covenant insofar as such release is for the Non-Watershed Portions described in the approved plan or plans described in paragraph 7(c)(i).

8. The Transferor and Transferee agree that the Restrictive Covenant and the terms herein apply mutatis mutundis to the following lands not registered within the Victoria Land Title Office as if they are registered parcels and part and parcel part of the Lands:

PART A, LANDS WITHIN

XXX WATERSHED:

 PART B, LANDS PARTIALLY WITHIN

XXX WATERSHED: