Richmond Port Hawkesbury
Paper GP Ltd. Taxation Act

CHAPTER 51

OF THE

ACTS OF 2006

amended 2012, c. 49

NOTE - This electronic version of this statute is provided by the Office of the Legislative Counsel for your convenience and personal use only and may not be copied for the purpose of resale in this or any other form. Formatting of this electronic version may differ from the official, printed version. Where accuracy is critical, please consult official sources.

An Act Respecting the Taxation
of Port Hawkesbury Paper GP Ltd.
by the Municipality
of the County of Richmond

title amended 2012, c. 49, s. 2.

Short title

1 This Act may be cited as the Richmond Port Hawkesbury Paper GP Ltd. Taxation Act. 2006, c. 51, s. 1; 2012, c. 49, s. 3.

Letter of Intent

2 Notwithstanding the Assessment Act, the Municipal Government Act or any other enactment but subject to Section 2A, the Municipality of the County of Richmond is hereby authorized to tax Port Hawkesbury Paper GP Ltd. to the extent and on the terms and conditions set out in the agreement between the parties, being the Letter of Intent dated May 25, 2006, the text of which is set out in Schedule A to this Act and the terms set out in paragraph 1 of that letter are hereby enacted for the term of the agreement. 2006, c. 51, s. 2; 2012, c. 49, s. 4.

Agreement dated September 27, 2012

2A Notwithstanding the Assessment Act, the Municipality [Municipal] Government Act, or any other enactment, the Municipality of the County of Richmond is hereby authorized to tax Port Hawkesbury Paper GP Ltd. to the extent and on the terms and conditions set out in the Agreement dated September 27, 2012, the text of which is set out in Schedule B to this Act, and which is hereby enacted for the term from September 28, 2012 until March 31, 2016. 2012, c. 49, s. 5.

Taxes payable

3 Notwithstanding the Assessment Act, the Municipal Grants Act or any other enactment, for the purposes of the calculation of uniform assessment pursuant to Section 14 of the Municipal Grants Act, the capitalized value of taxes payable in municipal taxation years 2006-2007 through to and including taxation year 2015-2016 shall be used in place of taxable assessment. 2006, c. 51, s. 3.

First lien

4 Taxes payable pursuant to this Act are a first lien on the property of Port Hawkesbury Paper GP Ltd. in accordance with the Municipal Government Act. 2006, c. 51, s. 4; 2012, c. 49, s. 6.

Retroactive effect

5 This Act has retroactive effect to the extent necessary to authorize the terms of the Letter of Intent set out in Schedule A to this Act and referred to in Section 2 and the Agreement set out in Schedule B to this Act and referred to in Section 2A. 2006, c. 51, s. 5; 2012, c. 49, s. 7.

Letter of Intent not in effect

6 When the Letter of Intent set out in Schedule A to this Act and referred to in Section 2 and the Agreement set out in Schedule B to this Act and referred to in Section 2A are not in effect between the parties, taxation of Port Hawkesbury Paper GP Ltd. by the Municipality of the County of Richmond shall be in the usual manner. 2006, c. 51, s. 6; 2012, c. 49, s. 8.

SCHEDULE A

May 25, 2006

Stora Enso Port Hawkesbury Limited

Attention: President and General Manager

Dear Mr. Suther:

Re: Tax Agreement

Further to the recent discussions held between Stora Enso Port Hawkesbury Limited and the Muncipality of the County of Richmond, I/we wish to confirm the principal terms and conditions of our proposed tax agreement by this letter of intent.

These principal terms and conditions are as follows.

1. Specific tax legislation

The Municipality will approach the Province of Nova Scotia to enact legislation setting municipal taxation of Stora Enso Port Hawkesbury Limited for the next ten years. Terms sought will include the following:

2. Tax Payments

Stora Enso Port Hawkesbury Limited will make payments in accordance with the proposed specific tax legislation directly to the Municipality of the County of Richmond during the 10-year term.

3. Dismissal of Outstanding Appeals and Court Actions

Stora Enso Port Hawkesbury Limited shall file and obtain dismissal of all outstanding assessment appeals and court applications and / or actions in respect of the assessment, assessability and / or taxation of its property. Without limiting the generality of the foregoing, the following shall be dismissed:

and the parties hereto shall waive costs against each other in the same.

4. Taxes Paid

The Municipality will accept the $3,093,014 for year ending 31 March 2005; and $3,078,006 for year ending 31 March 2006 as comprising full and final satisfaction of property taxes owed to the Municipality by Stora Enso Port Hawkesbury Limited for those tax years.

5. Resumption of Ordinary Operations

The resolution of its current labour dispute by Stora Enso Port Hawkesbury Limited, and the return of its work force, including the start-up of both paper machines and resumption of ordinary plant operations and production, shall be a condition precedent to the Municipalitys obligations herein.

6. Enabling Legislation

This entire agreement is dependent upon the enactment and coming into force of the enabling legislation described here above. The parties will cooperate with the Province in the drafting of the legislation.

7. Exclusivity

The tax agreement contemplated and described herein is to be exclusive to these two parties and is not negotiated on behalf of nor intended to benefit any other, including any other municipality, and Stora Enso Port Hawkesbury Limited agrees that it is not and will not solicit or discuss or enter into similar negotiations with any other municipality which may seek to exercise some interest in the subject property and operations.

8. Costs and expenses

Each party will be responsible for its own legal, accounting and other costs and expenses incurred in connection with the proposed legislation and this agreement.

9. Plant Closure

In the event that the mill is closed on a permanent basis, this agreement is terminated, and future property taxes will be subject to the normal property assessment and taxation process in place at the time for the Municipality of Richmond.

10. Governing Law

The agreement between the parties and all related documents shall be governed by the laws of the Province of Nova Scotia and the federal laws of Canada applicable in that province and each party irrevocably and unconditionally submits to the jurisdiction of the courts of that province.

11. Legal Effect of this Letter

You and we acknowledge that this letter is intended to be binding and to give rise to binding legal obligations between the parties conditional on the enactment and coming into force of the specific Provincial tax legislation and the other terms and conditions as are set out here above.

ACCEPTED AND AGREED:

2006, c. 51, Sch.; 2012, c. 49, s. 9.

SCHEDULE B

THIS AMENDMENT TO TAX AGREEMENT dated as of the 27th day of September, 2012

BETWEEN:

 

OF THE FIRST PART

OF THE SECOND PART

OF THE THIRD PART

WHEREAS NPPH (formerly known as Stora Enso Port Hawkesbury Limited) and the Municipality are parties to a letter of intent dated May 25, 2006 (the "Tax Agreement") with respect to municipal real property taxes to be paid by NPPH in respect of its property located within the Municipality for a term ending March 31, 2016;

WHEREAS the creditors of NPPH have approved a plan of arrangement or compromise, as amended, restated or supplemented, sanctioned by the Nova Scotia Supreme Court by order of September 25, 2012, (the "Plan") made pursuant to the Companies Creditors Arrangement Act (the "CCAA") for which Pacific West Commercial Corporation ("PWCC") is the plan sponsor;

WHEREAS NPPH and the Municipality have agreed to amend the Tax Agreement with effect as and from September 28, 2012 (the "Effective Date");

AND WHEREAS PWCC has made certain representations as set out herein and joins herein to signify its acceptance and agreement with the terms hereof;

NOW THEREFORE the parties agree as follows:

1. Conditional upon implementation of the Plan, Sections 1-7 of the Tax Agreement are deleted in their entirety as and from the Effective Date and replaced with the provisions in Schedule "A" attached hereto.

2. The Tax Agreement is in full force and effect, except as specifically modified above.

3. The parties hereto agree to not file any appeals and to dismiss any appeals previously filed arising from the motions filed by the Municipality in respect of the disclaimer of the Tax Agreement by NPPH pursuant to the CCAA and the parties acknowledge that such failure to file or dismissal is without prejudice to any legal arguments relating thereto. NPPH shall pay $60,000 on or before September 28, 2012 to the Municipality in respect of costs incurred and the parties agree not to seek any further or other costs in respect of those motions or appeals.

4. This Amendment to Tax Agreement is conditional upon the implementation of the Plan and the Province of Nova Scotia amending or repealing and replacing the Richmond Stora Enso Taxation Act (Local Acts 2006) c. 88 (the "Act") contemplated by Schedule "A". If, for any reason, the Plan is not implemented, or the Province of Nova Scotia does not amend or repeal and replace the Act as contemplated by Schedule "A" to provide the necessary authorization and empowerment of the Municipality, the parties agree that this Amendment to Tax Agreement shall automatically terminate, the Tax Agreement shall be unaffected, and the parties hereto shall have no liability to each other with respect to any matter contemplated by this Amendment to Tax Agreement.

5. The Municipality acknowledges that NPPH and PWCC have represented that, after implementation of the Plan, NPPH intends to convey legal title to certain lands owned by NPPH in the Municipality to Port Hawkesbury Paper GP Ltd. (the "General Partner") in its capacity as general partner for Port Hawkesbury Paper Limited Partnership, the partnership formed to operate the restructured business of NPPH, as contemplated in the Plan (the "Limited Partnership") and to assign this agreement to the General Partner. The Municipality consents to the assignment of this Amendment to Tax Agreement by NPPH to the General Partner in its capacity as general partner for the Limited Partnership at the time of such conveyance. Upon and as a condition of such assignment and Municipality consent, the General Partner on behalf of the Limited Partnership shall execute an assumption agreement binding itself to the provisions of this Amendment to Tax Agreement. Thereafter, the obligations of the Municipality shall be owed to the Limited Partnership and not to NPPH, and the Limited Partnership shall enjoy all the rights of NPPH under this Amendment to Tax Agreement. Except as contemplated by this section, this Amendment to Tax Agreement is exclusive to the parties hereto and is not negotiated on behalf of nor intended to benefit any other party, including any other municipality.

6. This Amendment to Tax Agreement may be executed in several counterparts and by transmission of pdf or facsimile signatures with original copies delivered by each party to the other, each of which so executed shall be deemed to be an original, and such counterparts together shall constitute but one and the same instrument. This agreement is binding on the parties and their successors and permitted assigns or transferees.

IN WITNESS WHEREOF the parties have executed this amendment on the day and year first written above.

DULY EXECUTED ) NEWPAGE PORT
in the presence of: ) HAWKESBURY CORP.
)
) Per:
Witness Name: Peter Wedlake
Title: Chief Restructuring
Officer

) MUNICIPALITY OF THE
) COUNTY OF RICHMOND
)
) Per:
Witness Name: Warren Olsen
Title: Chief Administrative
Officer

)
) Per:
Witness Name: Victor David
Title: Deputy Warden

) PACIFIC WEST
) COMMERCIAL
) CORPORATION
)
) Per:
Name:
Title:

2012, c. 49, s. 10.

__________

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