Scott Maritimes Limited Agreement (1965) Act

CHAPTER 415

OF THE

REVISED STATUTES, 1989

Short title

1 This Act may be cited as the Scott Maritimes Limited Agreement (1965) Act. R.S., c. 415, s. 1.

Interpretation

2 In this Act, unless the context otherwise requires,

(a) "Agreement" means the agreement in the Schedule to this Act;

(b) "Company" means Scott Maritimes Limited, formerly named Scott Maritimes Pulp Limited;

(c) "Mill" means a mill in the County of Pictou having a minimum rated capacity of five hundred tons of bleached kraft pulp per day or a rated capacity in excess of five hundred tons of bleached kraft pulp per day as a result of expansion of manufacturing facilities or changes in manufacturing procedures or techniques;

(d) "Mill site", "its Mill site", "land used as a site for its Mill" and similar expressions mean land situate at or near Abercrombie in the County of Pictou owned on or after the thirtieth day of March, 1965, in fee simple by Scott Paper Company, a body corporate, under the laws of the Commonwealth of Pennsylvania, which now or may hereafter be leased to the Company as a site for its Mill, including storage, shipping and supply areas associated therewith;

(e) "Minister" means the Minister of Lands and Forests;

(f) "Province" means Her Majesty in right of the Province. R.S., c. 415, s. 2.

Agreement

3 The Minister is authorized and empowered on behalf of the Province to make, enter into, execute and carry out the Agreement. R.S., c. 415, s. 3.

Powers of Governor in Council

4 The Governor in Council is empowered to

(a) do every act and exercise every power and expend every sum of money necessary or proper for the purposes of implementing in every respect every obligation assumed by the Province under the Agreement;

(b) do and perform the acts, matters and things in the Agreement provided to be done or performed by the Province in the manner and with the effect and under the conditions stipulated and provided in the Agreement;

(c) authorize the Minister to make any request, give any notice or direction, grant or withhold any approval or consent or do any other act or thing required or permitted to be done by the Province by or under the Agreement. R.S., c. 415, s. 4.

Land deemed necessary to implement Agreement

5 Any land that the Minister deems necessary for the purpose of implementing an obligation assumed by the Province under the Agreement is deemed to be land necessary for a purpose that is a public purpose within the meaning of clause (d) of subsection (1) of Section 10 of the Expropriation Act. R.S., c. 415, s. 5.

Necessary sums from Province

6 The Minister of Finance may charge to Capital Account such sum or sums as are deemed necessary by the Governor in Council for the purpose of carrying out the obligations assumed by the Province under the Agreement or, if it is deemed expedient so to do, the Minister of Finance may pay the said sum or sums out of the Special Reserve Account of the Province or out of the Revenue of the Province for any year or years. R.S., c. 415, s. 6.

Assessment Act

7 The Assessment Act does not apply to

(a) any right or interest of the Company in or over the Licensed Land or to wood cut on the Licensed Land while the wood remains on the Licensed Land;

(b) the Mill of the Company and the land used as a site for its Mill, including storage, shipping and supply areas associated therewith; or

(c) the personal property of the Company in the County of Pictou used or useful in and in connection with the production, manufacture, storage and sale of forest products and by-products and, without limiting the generality of the foregoing, inventories, whether finished or unfinished, for a period commencing on the thirtieth day of March, 1965, and terminating on a date twenty years after the Startup of the Mill. R.S., c. 415, s. 7.

Payments by Company to Province

8 The Company shall pay to the Province, after the Startup of the Mill and during the period that the Assessment Act does not apply to it,

(a) not later than the thirty-first day of January of the year next succeeding the year in which the Mill started up,

(i) one hundred and five thousand dollars multiplied by the number of months during which the Mill produced pulp in the preceding year divided by twelve, or

(ii) sixty cents per ton of pulp produced in the said preceding year,

whichever is the greater; and

(b) not later than the thirty-first day of January of each succeeding year,

(i) one hundred and five thousand dollars and in addition thereto one thousand dollars multiplied by the complete number of calendar years since the Startup of the Mill not exceeding an additional amount of ten thousand dollars in any year, or

(ii) sixty cents per ton of pulp produced in the calendar year next preceding the said thirty-first day of January,

whichever is the greater. R.S., c. 415, s. 8.

Payment to Municipality of County of Pictou

9 The Minister of Finance shall pay the sum received by the Province in each year from the Company in accordance with Section 8 to the Municipality of the County of Pictou. R.S., c. 415, s. 9.

Payment to Municipality of County of Halifax

10 The Minister of Finance shall pay to the Municipality of the County of Halifax in lieu of taxation of the Licensed Land under the Assessment Act twenty per cent of the annual stumpage paid by the Company to the Province pursuant to the Agreement. R.S., c. 415, s. 10.

SCHEDULE

THIS AGREEMENT made this . . . . . . . . day of . . . . . . . . . . .  A.D. 1965,

BETWEEN:

HER MAJESTY THE QUEEN, in the Right of the Province of Nova Scotia, hereinafter called the "Province",

OF THE FIRST PART

- and -

SCOTT MARITIMES PULP LIMITED, a body corporate, having its Head Office at Halifax, in the County of Halifax, Province of Nova Scotia, hereinafter called the "Company",

OF THE SECOND PART

SECTION I - INTERPRETATION

"Company" means the Party of the Second Part, and, unless the context otherwise requires, includes its successors and assigns;

"Forest Management Plan" means a long-term plan, prepared by the Company and approved by the Province, designed to improve the yield of the Licensed Land and to provide for the harvesting of the forest crop on the Licensed Land in the most efficient and economical manner;

"Licensed Land" means the Crown Lands described in Schedule "A" hereto attached;

"Management Cutting Plan" means an annual plan to harvest the wood growth on the Licensed Land;

"Mill" means a mill in the County of Pictou having a minimum rated capacity of five hundred (500) tons of bleached kraft pulp per day or a rated capacity in excess of five hundred (500) tons of bleached kraft pulp per day as a result of expansion of manufacturing facilities or changes in manufacturing procedures or techniques;

"Mill site", "its Mill site", "land used as a site for its Mill" and similar expressions mean land situate at or near Abercrombie in the County of Pictou now or hereafter owned in fee simple by Scott Paper Company, which now or may hereafter be leased to the Company as a site for its Mill, including storage, shipping and supply areas associated therewith;

"Scott Paper Company" means Scott Paper Company, a body corporate under the laws of the Commonwealth of Pennsylvania;

"Softwood" means all coniferous species of wood;

"Startup of the Mill" means the date on which the Company first produces finished pulp.

SECTION II - RECITALS

WHEREAS, the Company is formed for the purpose of manufacturing wood pulp and other products in the Province of Nova Scotia, and, in the course of such manufacture, will annually require pulpwood in addition to that which may be obtained from its own lands and elsewhere; and

WHEREAS, it is the intention of the company to commence on or before the 30th day of April, A.D. 1965, the construction of a Mill in Pictou County having a rated capacity of five hundred (500) tons of bleached kraft pulp per day and to commence production in reasonable commercial quantities by the 31st day of March, A.D. 1967; and

WHEREAS, the Mill will require a minimum of four hundred thousand (400,000) cords of wood annually; and

WHEREAS, the Company requires approximately two hundred and thirty thousand (230,000) acres of productive Crown Lands so as to be assured of an annual supply of wood necessary to sustain the continued operation of the Mill; and

WHEREAS, approximately fifteen per cent (15%) of the pulp wood used in the Mill will be hardwood; and

WHEREAS, the Company has agreed that the Licensed Land will be operated under a Forest Management Plan.

SECTION III - AGREEMENT

NOW THIS AGREEMENT WITNESSETH that in consideration of the premises, covenants, promises and agreements herein contained, to be by them observed, performed and paid, the parties hereto each agree with the other as follows:

1. THE PROVINCE covenants and agrees, subject to the terms and conditions herein contained:

A.

(i) That it will grant to the Company for a term of not less than fifty (50) years, commencing on the date when the Company takes over management of any part of the Licensed Land, the right to enter upon that part of the Licensed Land and to cut and remove wood growing thereon, in accordance with Management Cutting Plans; provided, that the applicable terms and conditions herein contained shall have been complied with by the Company;

(ii) That it will issue, at the option of the Company, a renewal of the license or licenses issued pursuant to Sub-Clause (i) of Clause A of Subsection 1. of this Section III for a further period of forty (40) years from the expiration thereof; provided, that the applicable terms and conditions herein contained shall have been complied with by the Company;

(iii) That any renewal of the license or licenses pursuant to Sub-Clause (ii) of Clause A of Subsection 1. of this Section III shall be subject to all the terms and conditions of this Agreement excluding Sub-Clause (ii) of this Clause but including the filing by the Company and the approval by the Province of Forest Management Plan and Management Cutting Plans covering the renewal period; provided always that the stumpage will be at such rate or rates as may be mutually agreed upon.

B. That it will supply or cause to be supplied to the Company for its use at its Mill site in Pictou County on such terms and conditions as may be agreed upon fresh water suitable for use in the manufacture of bleached kraft pulp;

(i) Not later than September 30, 1966 and until March 31, 1967 such number of Imperial gallons as may be required for the operation or partial operation of the Mill;

(ii) On March 31, 1967 and on each day thereafter a minimum of twenty five (25) million Imperial gallons per day.

C. That it will do all such things and take all such steps as may be necessary to secure to the Company the rights granted to the Company hereunder, and without restricting the generality of the foregoing, will introduce such legislation, whether by way of amendment to the Lands and Forests Act or otherwise, as may be reasonably required by the Company.

2. THE COMPANY covenants and agrees, subject to the terms and conditions herein contained:

A. That it will diligently proceed with detailed engineering of a pulp Mill in Pictou County, Nova Scotia, having a rated capacity of five hundred (500) tons of bleached kraft pulp per day, and will do everything in its power to commence on or before the 30th day of April, A.D. 1965, construction of the Mill, and will endeavour to commence production in reasonable commercial quantities by the 31st day of March, A.D. 1967 and to that end will do everything within its power;

PROVIDED HOWEVER, that the said date for such completion shall be extended in case of delays resulting from fires, explosions, accidents, labour disturbances, floods, droughts, embargoes, wars (whether or not declared), civil commotion, acts of God or the public enemy, action of any governmental authority, and, without limitation by reason of the foregoing reference to specific causes of delay, any cause beyond the control of the Company which the Company shall have exercised due diligence to eliminate or terminate to the extent that it could reasonably do so:

B. That it will prepare and submit to the Province for approval, within five (5) years after the Startup of the Mill, a Forest Management Plan for the Licensed Land covering a period of not less than forty-five (45) years. The Plan will be designed:

(i) to improve the yield of the Licensed Land on a sustained yield basis by such methods as appear likely to prove economically feasible in designated sections of the Licensed Land during the period of this Agreement;

(ii) to provide for the harvesting of the forest crop on the Licensed Land in the most economical manner; and

(iii) to provide for the highest economic use of the forest crop; and

(iv) to establish the volume of wood to be removed on the basis of maximum allowable annual cut, consistent with the requirements of the Mill and with Sub-Clauses (i), (ii), and (iii).

C. That it will prepare and submit to the Province for approval each year a Management Cutting Plan, and each new Management Cutting Plan will be so submitted at least three (3) months before the expiration of the current Management Cutting Plan.

The Management Cutting Plan will provide, inter alia,

(i) For the size and quality of the logs which will be used for saw logs;

(ii) That the Company will use as pulpwood softwood logs having a diameter which at no point is less than four inches outside the bark, subject to the following:

(a) Logs having a minimum diameter of less than six inches shall have no rot;

(b) Logs having a minimum diameter from six inches to eight inches shall not have hard or soft rot showing at more than one end of the log, and such rot shall not exceed one-half of the logs diameter;

(c) Logs having a minimum diameter of eight inches or greater may have hard or soft rot showing on one or both ends of the log, but such rot shall not exceed one-half of the logs diameter;

provided however that the specifications in Sub-Clause (ii) of this Clause may be varied with respect to the annual cut on the whole or any part of the Licensed Land by mutual agreement;

D. That all cutting of trees from the Licensed Land will be done in accordance with the Companys Management Cutting Plan as approved by the Province;

E.

(i) That, commencing five (5) years after startup of the Mill, it will cut approximately fifty thousand (50,000) cords of wood of all kinds, including, without limitation, pulpwood, saw logs, veneer logs, poles and pilings from the Licensed Land each year, and will cut a total of one million five hundred thousand (1,500,000) cords from the Licensed Land during the first thirty (30) years of the Companys operation; provided, however, that it will be deemed to have complied with the terms of this Agreement if the total cut of all forest products from the Licensed Land during the first thirty (30) years as approved by the Province is increased or decreased by ten per cent (10%), and if the cut of all forest products from the Licensed Land for any year as approved by the Province is increased or decreased by fifty per cent (50%);

PROVIDED, however, that the Company will be deemed to have complied with the terms of this Clause if it complies with the Forest Management Plan or a revision thereof and the Management Cutting Plan or a revision thereof;

(ii) That for each succeeding ten-year period, after the thirty-year period specified in Sub-Clause (i), it will cut such quantity of forest products from the Licensed Land as shall be mutually agreed upon and specified in the Management Cutting Plans;

(iii) That the Company, with the consent of the Province, shall be at liberty from time to time to exchange stumpage on the Licensed Land for stumpage on other Crown lands in cases where it is more economical and desirable for the Company to cut on such other Crown Lands pulpwood to be processed at the Mill;

F. That it will pay to the Province as stumpage for pulpwood taken from the Licensed Land:

(i) Prior to the Startup of the Mill and for ten (10) years thereafter at the rate of Two Dollars ($2.00) per rough cord for each rough cord containing 128 cubic feet stacked measure of net merchantable softwood;

(ii) For the first succeeding ten-year period at a rate per cord for softwood bearing the same ratio to the rate set forth in Sub-Clause (i) of this Clause F as the average price quoted in New York City by Canada International Paper Company and Abitibi Power and Paper Co., Limited or such other company or companies as may be substituted therefor by the mutual agreement of the Province and the Company for standard white newsprint during the six-month period prior to the beginning of the ten-year period bears to the present price quoted by such companies in New York City for standard white newsprint, which for the purposes hereof, shall be deemed to be One Hundred and Thirty-Four Dollars ($134.00) per ton; provided however that in no event shall the rate be less than Two Dollars ($2.00) per cord;

(iii) For each succeeding ten-year period after the ten-year period referred to in Sub-Clause (ii) of this Clause at such rate as may be mutually agreed upon;

(iv) Prior to the Startup of the Mill and for ten years thereafter at the rate of fifty cents (50¢) per cord for each rough cord of 128 cubic feet stacked measure of net mechantable hardwood and for each succeeding ten-year period at such rate as may be mutually agreed upon;

G. That it will pay to the Province as stumpage for trees taken from the Licensed Land for purposes other than pulpwood such rates as may be mutually agreed upon at the commencement of each calendar year.

H. That it will arrange with the Province for the proper scaling of all wood cut from the Licensed Land;

I. That it will pay the Province promptly at the end of each quarter for the wood scaled during the prior quarter;

J. That it will supply when feasible to do so meals and accommodations to provincial employees while scaling wood cut on the Licensed Land, and when not so feasible will appropriately reimburse the Province for such expense incurred by them;

K. That it will artificially regenerate trees of commercially desirable species wherever practicable on any portion of the Licensed Land cut over by the Company not found to be satisfactorily restocked ten years after the said cutting provided:

(i) it shall not be required to restock areas burnt over where the fire is not attributed to the fault of the Company; provided however that if such an area is not satisfactorily restocked ten years after being burnt over and the Company is not prepared to artificially regenerate the area and the Province is prepared to do so the said area shall revert to the Province and shall thereafter not be Licensed Land;

(ii) for the purpose of this Clause an area shall be considered to be satisfactorily restocked where there are not less than five hundred (500) milacre quadrats per acre stocked with thrifty seedlings and/or trees of commercially desirable species;

L. That it will advise the Province immediately as to the Startup of the Mill;

M. That it will keep the Province indemnified against all claims and demands that may be made against the Province by reason of anything that may be done by the Company, its servants, workmen, agents and licensees, in the exercise or purported exercise of the rights, powers, privileges and liberties granted by this Agreement;

N. That all wood to be used as pulpwood cut on the Licensed Land shall be processed into pulp at the Mill and at a mill owned by Scott Paper Company or its wholly owned subsidiary at Sheet Harbour, or either of them, unless the Province agrees that it will be used for some other purpose;

O. That the majority of the issued voting shares of the Company shall be owned by the Scott Paper Company or a wholly owned subsidiary of Scott Paper Company, or by such Company, person or persons as may be approved by the Province for and during the period commencing with the execution of this Agreement and ending with the approval by the Province of a Forest Management Plan, provided, however, that the Province shall not, in any event, unreasonably withhold its approval to the said shares or any of them being owned by any other company, person or persons. The Company will submit to the Province all such records and documents in its custody, possession or control as may be necessary to establish such ownership and changes therein from time to time.

3. IT IS MUTUALLY AGREED:

A. That the Province will at one time turn over to the Company management of the whole or from time to time management of any part of the Licensed Land within ninety (90) days of being notified that the Company is ready to take over the management of the whole or any part of the Licensed Land in accordance with this Agreement; PROVIDED, that the Company will be deemed to have surrendered any part of the Licensed Land that it has not taken under its management as of the date on which its Forest Management Plan is approved by the Province;

B. Commitments made by the Province prior to the signing of this Agreement regarding cutting licenses, camp sites, leases and other rights to, on or for any part of the Licensed Land shall be honoured and retained fully effective, but no further agreements or commitments shall be made with other parties regarding the Licensed Land, unless agreed to by the Company, after the signing of this Agreement;

C. That the Province may withdraw land from the Licensed Land, either permanently or for a specified time, for forest experimental purposes, parks, or any other purposes but the land so withdrawn shall not exceed one per cent (1%) of the Licensed Land without the consent of the Company;

D. That the Province may withdraw from the Licensed Land, either permanently or for a specified time, any land needed for railways, highways, power transmission, or other right-of-way purposes or for power development; PROVIDED, HOWEVER, that the Company shall have the first opportunity of cutting the timber on the land so withdrawn and the Province shall use other means of disposal only if the Company cannot for any reason cut the timber in the time required;

E. That the Company may surrender to the Province any portion of the Licensed Land;

F. That by mutual agreement additional lands may from time to time be added to the Licensed Land;

G. That this Agreement shall not limit the use of the Licensed Land for other purposes, such as mining, trapping, hunting, fishing, or any other use that does not materially prejudice the rights granted to the Company;

H. That the Province will not unreasonably withhold from the Company the grant of any authorization or rights under the Water Act;

I. That should it appear at any time to either party necessary or expedient in case of emergency to increase or decrease the rate of cutting prescribed by the then current Management Cutting Plan, or the Forest Management Plan, emergency revision of such Plan or Plans will be negotiated between the parties. Without limiting the generality of the foregoing, cause for revision on account of emergency conditions will cover such matters as fire damage of major proportions, serious wind throw, insect or disease attacks, serious damage to the Mill of the Company, or a national emergency brought about by war or a severe economic depression;

J. That, if the Company makes default by failing to commence construction of or complete its Mill, or by failing to submit the Forest Management Plan or a Management Cutting Plan within the time specified the Province may give notice in writing to the Company stating the default complained of, and, if the Company does not make good or commence to make good such default within ninety (90) days from the date of such notice, the Province may declare this Agreement terminated and it shall thereupon be of no further force or effect;

K.

(i) That if the Province and the Company agree that the annual growth of trees on the Licensed Land is significantly above the estimated fifty thousand (50,000) cords annually on a sustained yield basis, or becomes substantially more as a result of the Companys Forest Management Plan, and the Company does not increase its annual cut accordingly, the Province may notify the Company and request the Company to increase its annual cut accordingly. If the Company does not so increase its annual cut within five (5) years after such notice, the Province may reduce the area of the Licensed Land in proportion to the increased yield of the Licensed Land;

(ii) That if the Province and the Company agree that for any reason beyond the control of the Company the annual growth of trees on the Licensed Land is significantly less than the estimated fifty thousand (50,000) cords annually on a sustained yield basis and, notwithstanding the provisions of Sub-Clause (i) of Clause E of Subsection 2 of Section III hereof, the minimum annual cut shall be reduced in proportion to the decreased yield of the Licensed Land;

L. That this Agreement may be terminated by the Province in the event of the Companys failing to operate its Mill for any continuous period of two (2) years; PROVIDED, HOWEVER, that this clause shall not apply to failure to operate as a result of fires, explosions, accidents, labour disturbances, floods, droughts, embargoes, wars (whether or not declared), civil commotion, acts of God or the public enemy, action of any governmental authority, and, without limitation by reason of the foregoing reference to specific causes of delay, any cause beyond the control of the Company which the Company shall have exercised due diligence to eliminate or terminate to the extent that it could reasonably do so;

M. That the Province will within three (3) months after receipt of a Forest Management Plan or of an amendment thereto, or within one (1) month of receipt of a Management Cutting Plan or of an amendment thereto, advise the Company of its approval or disapproval;

N. That the head office of the Company shall be maintained and remain in the Province of Nova Scotia;

O. That the Company shall, with respect to the Licensed Land, pay to the Province the fire tax in accordance with the Lands and Forests Act;

P.

(i) The Province, so far as it is practicable, shall establish and maintain all boundary lines of the Licensed Land selected by the Company so that the said boundaries have been blazed or reblazed and cleared of underbrush not more than four years prior to the time the said lands are licensed to the Company. Any boundaries not so renewed prior to licensing shall be renewed by the Province as soon as practicable after the signing of this Agreement;

(ii) Boundaries between each parcel of Licensed Land and freehold land owned by Scott Paper Company or a wholly owned subsidiary of Scott Paper Company shall be maintained jointly by the Company and the Province during the period the said parcel is licensed to the Company. Other boundaries of lands licensed to the Company shall be maintained by the Province;

(iii) The Province shall indemnify and hold harmless the Company, its agents or workmen, from any actions or damages resulting to it or them from any action brought by any party against it or them for trespass committed on Licensed Land. The conduct of the defence to any such action shall be the responsibility of the Province, but the Company shall co-operate with the Province in any such defence;

(iv) Nothing in this section shall be deemed to relieve the Company from any claims resulting from any operations by the Company on lands outside the areas described by the Province in any leases or other documents given to the Company by the Province;

Q.

(i) Roads built at the Companys expense shall be considered the Companys private roads for the duration of this Agreement, and any extension thereof, and such roads shall at all times be under the Companys control unless by written Agreement otherwise. Agents of the Province shall, however, always have right of entry and passage;

(ii) The Company shall have the right to charge parties other than the Province for truck transportation on such roads at rates agreed upon from time to time by the Province and the Company;

R. That this Agreement and any rights granted to the Company pursuant to this Agreement shall not be sold, transferred, assigned, mortgaged, pledged or charged by the Company without the consent of the Province; provided, however, that the Province will not unreasonably withhold its consent if any sale, transfer or assignment be to a person or company to whom the Company has sold its Mill and provided further that the consent of the Province shall not be required if any such mortgage, pledge or charge be to a trustee having a place of business in the Province of Nova Scotia as security for bonds of the Company issued to assist the financing of the Mill, and, if the Province shall give its consent to any such mortgage, pledge or charge, or if its consent thereto shall not be required, this Agreement and all such rights may without any further consent be enjoyed, or sold, transferred and assigned by such trustee (together with the Company if necessary or desirable) pursuant to the rights or remedies conferred under the Trust Deed securing such bonds, or by law, or by any receiver who shall be in possession of the Companys Mill;

S. Notwithstanding any other provision of this Agreement if, while this Agreement shall be mortgaged, pledged and charged to a trustee the Company shall default in any of its obligations hereunder, the Province will before taking any action in respect of such default (other than the making of demand, or the in- stitution [institution] of suit or arbitration proceedings as herein provided solely for the performance of such obligations), notify such trustee in writing of the nature of such default and the status thereof. Any such trustee, or any receiver who shall be in possession of the Companys Mill, may exercise all the rights of the Company under this Agreement and may perform any obligations of the Company hereunder, and, in the event of any such default, the Province shall not take any action in respect thereof (other than the making of any demand, or the institution of suit or arbitration proceedings as aforesaid, solely for the performance of such obligation), if within a period of one hundred and twenty (120) days after receipt by the trustee of such written notice, the Company, or such trustee or receiver shall substantially perform such obligations so in default, if such obligations are reasonably performable within such period, or if they are not reasonably performable within such period, if performance thereof is commenced within such period and substantially completed within a reasonable time;

T. That the Province for the purposes of this Agreement is represented by the Minister of Lands and Forests; and any act done, request made, notice or direction given by or to the said Minister shall, for the purpose of this Agreement and every instrument executed pursuant hereto, be deemed to have been done, made or given by or to the Province;

U. That, if any dispute or difference should arise between the parties hereto as to the interpretation of any provision of this Agreement or as to whether or not either party hereto has violated or made default in or failed to observe or perform any provisions of this Agreement; or if the parties hereto shall fail, within any stated time, or if no time is stated within a reasonable time to agree as to any matter which is stated to be the subject of a mutual agreement, or negotiation, or as to the reasonableness of any disapproval, such dispute or difference shall be referred to a Board of Arbitration constituted and appointed in the following manner: Either party may notify the other in writing of its desire to refer such dispute or difference to a Board of Arbitration and it shall in such notice name its representative to the Board. Within ten (10) days of the receipt of such notice, the other party shall notify the first party in writing of the name of its representative to the Board. The two (2) representatives shall appoint a third arbitrator and he shall be appointed Chairman of the Board. The Arbitration Act shall apply to this arbitration clause and in particular to the appointment of a second member and third member of the Board of Arbitration if the party required to appoint a representative of the Board fails to do so as herein provided; and if the two representatives of the parties named to the Board fail to meet and appoint a third member to be Chairman as herein provided.

IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and year first above written.

SIGNED, SEALED AND )

DELIVERED )

)

)

)

SCHEDULE "A"

All Crown Lands situate on the date of this Agreement in that portion of Halifax County bounded and described as follows:

BEGINNING at the point of intersection of the Halifax-Guysborough County Line with the line of mean high tide of Atlantic Ocean near Ecum Secum;

FROM THENCE to run northwesterly following said County Line to its intersection with the Colchester-Pictou-Halifax County Line corner, near Loon Lake;

THENCE southwesterly, following the Colchester-Halifax County Line ten miles more or less to its intersection with the road leading from Dean to Newton Mills;

THENCE southerly, following said road 1 1/8 miles more or less to its intersection with a branch of the headwaters of the Musquodoboit River;

THENCE westerly, downstream, following the south bank of the Musquodoboit River to its intersection with the Old Guysborough Road, so called, at or near Elderbank, Halifax County;

THENCE westerly, following the Old Guysborough Road to its intersection with Clattenburg Brook, in the vicinity of Devon, Halifax County;

THENCE southerly, downstream, following the east bank of Clattenburg Brook to its intersection with White Horse Lake;

THENCE following the east shore of White Horse Lake to its intersection with the east bank of the brook leading from White Horse Lake to Lake No Good;

THENCE southerly, downstream, following the east bank of the brook leading from White Horse to Lake No Good to its intersection with the east shore of Lake No Good;

THENCE following the east shore of Lake No Good to its intersection with the east bank of West Brook;

THENCE southerly, downstream, following the east bank of West Brook to its intersection with the east shore of Porters Lake;

THENCE southerly, following the east shore of Porters Lake to the Atlantic Ocean;

THENCE easterly, following the line of mean high tide of Atlantic Ocean to the place of beginning;

SAVE AND EXCEPT

(a) certain Crown Lands situate, lying and being between Fraser Settlement and Caribou Mines and being more particularly described and identified in an expired timber license number 2939, lands re-conveyed to the Crown under Documents 550-1, 550-2, 550-3, 550-4, 550-5, 550-6 and 363C-1, expired leases 399A, 399B, 398, 497, 497A, 497B, 1134, 498, 834, 836, 1175 and 1160, rejected petition number 26687, and the Crown Lands bounded on the north by Crown Grant Number 5025 and Jennings Lake, on the east by expired Lease Number 497B, on the south by rejected Petition Number 26687 and on the west by expired Lease Number 497A;

(b) certain Crown Lands situate, lying and being in the vicinity of West Jeddore on the western shore of Jeddore Harbour, and being the lands granted under Crown Grant Old Number 432, Book 18, page 36 and later escheated;

(c) certain Crown Lands situate, lying and being at Goose Lake in the vicinity of Lower West Jeddore and being more particularly described and identified as bounded on the north by Crown Grant Number 12998, on the east by Crown Grant Numbers 13810, 12570A and 12570B, on the south by Crown Grant Old Number 1792 Book 0 page 117A, and on the west by Crown Grant Old Number 1713 Book 0 page 8K;

(d) certain Crown Lands situate, lying and being in the vicinity of Lower West Jeddore and being more particularly described and identified as bounded on the north by Crown Grant Old Number 1713 Book 0 page 8K, on the east by Crown Grant Old Number 1792 Book 0 page 117A, on the south by Crown Grant Number 353 Book V page 212 and on the west by Oyster Pond;

(e) certain Crown Lands triangular in shape, situate, lying and being between Musquodoboit Harbour and Ostrea Lake and more particularly described and identified as bounded on the northeast by Crown Grant Number 1672, on the southeast by Crown Grant Number 1349, and on the west by the Musquodoboit Harbour;

(f) certain Crown Lands situate, lying and being at Narrows Lake and being more particularly described and identified as bounded on the west by Crown Grant Numbers 1672, and 315 Book V page 196, and on the north, east and south by Narrows Lake;

(g) certain Crown Lands situate, lying and being at Narrows Lake, and being more particularly described and identified as bounded on the east by Crown Grant Old Number 397 Book 18 page 27 and on the north, west and south by Narrows Lake;

(h) certain Crown Lands situate, lying and being at Owls Head Harbour, and being more particularly described and identified as bounded on the north by Crown Grant Numbers 1225 and 1673, on the west by Crown Grant Old Number 158 Book 14 page 69, Little Harbour, and Crown Grant Old Number 2119 Book U page 28, on the south by Crown Grant Numbers 2612 and 523C and Loyds Harbour, and on the east by Crown Grant Number 3819B and Owls Head Bay;

(i) certain Crown Lands situate, lying and being at Owls Head Harbour and being more particularly described and identified as bounded on the north by Crown Grant Old Number 149 Book 14 page 61, on the east by Crown Grant Number 523A, Book W page 209, on the south by Crown Grant Number 1673 and on the west by Crown Grant Old Number 158 Book 14 page 69;

ALL on file in the Department of Lands and Forests, Provincial Administration Building, Halifax, Nova

R.S., c. 415, Sch.