agreement this agreement dated for reference may 4, 2015

AGREEMENT

THIS AGREEMENT dated for reference May 4, 2015 is between:

THE CITY OF POWELL RIVER, a municipal corporation under the LocalGovernment and having offices at 6910 Duncan Street, Powell River, British Columbia,V8A 1V4

(“City”)

AND

ISLAND TIMBERLANDS GP LTD. (INC. NO. 0714328) as general partner onbehalf of ISLAND TIMBERLANDS LIMITED PARTNERSHIP having offices at4th Floor, 65 Front Street, Nanaimo, British Columbia, V9R 5H9

(“ITLP”)

BACKGROUND

A. ITLP is the owner of certain timber (the “Timber”) and is the licensee, as successor ininterest to MacMillan Bloedel Limited, of the lands upon which the Timber is located (the“Lands”) pursuant to five separate licenses all dated June 1, 1998 (collectively, the “Licenses”)which Licenses were granted over such Lands to facilitate the harvesting of the Timber.

B. Some of the parcels comprising the Lands are owned by the City and the balance of theparcels comprising the Lands are owned by PRSC Land Developments Ltd and Catalyst PaperCorporation.

C. Two of the Licenses, copies of which are attached as Schedule A, (the “SubjectLicenses”) grant rights over, among other lands, those of the Lands legally described as follows:

PID: 026-686-546, LOT I DISTRICT LOT 450 GROUP 1 NEW WESTMINSTERDISTRICT PLAN BCP23888; and

PID: 028-024-702, LOT D DISTRICT LOT 450 GROUP I NEW WESTMINSTERDISTRICT PLAN BCP42255

(the “Millennium Park Lands”)

which Millennium Park Lands the City wishes to formally establish as park.

D. The City and ITLP have agreed that ITLP will release its rights to the Timber upon, andthe Lands comprising, the Millennium Park Lands in consideration of the Release Payment (asdefined below) by the City all in accordance with the terms and conditions of this Agreement.

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AGREEMENTS

For good and valuable consideration, the receipt and sufficiency of which each partyacknowledges, the parties agree as follows:

1. ITLP agrees that effective as of the Release Date and provided that the Release Payment(as defined below) has been received by ITLP in full, ITLP releases and discharges any and allinterest it has in and to the Timber located upon the Millennium Park Lands and in and to theMillennium Park Lands.

2. As consideration for the release described in paragraph I above, the City agrees to: pay toITLP a payment (the “Release Payment”) in the amount of $1,125,000 plus GST, payablewithin 2 business days following execution of this Agreement by both parties (or the nextbusiness day if such is not a business day) (the “Release Date”).

3. The parties will execute and deliver all other appropriate supplemental agreements andother documents, and take any other action necessary, to give full effect to this Agreement and tomake this Agreement legally effective, binding, and enforceable as between them and as againstthird parties, including but not limited to, amending the Subject Licenses to ensure that theMillenium Park Lands are permanently excluded from the application of the Subject Licenses.

4. This Agreement will be binding upon and enure to the benefit of the parties and theirrespective successors and assigns.

5. Except for the provisions of this Agreement, nothing in this Agreement imposes any legalduty of any kind on the City to any one, or obliges the City to enforce this Agreement, toperform any act or to incur any expense in respect of this Agreement.

6. No alleged waiver of any breach of this Agreement is effective unless it is an expresswaiver in writing of the breach in respect of which it is asserted against the party alleged to havegiven the waiver. No such waiver of any breach of this Agreement operates as a waiver of anyother breach of this Agreement.

7. All of the obligations and covenants contained in this Agreement are severable, so that ifany one or more of the obligations or covenants are held by or declared by a court of competentjurisdiction to be void or unenforceable, the balance of the obligations and covenants will remainand be binding.

8. If any section, subsection, sentence, clause or phrase in this Agreement is for any reasonheld to be invalid by the decision of a Court of competent jurisdiction, the parties hereto shallagree upon an amendment to be made to the section, subsection, sentence, clause or phrasepreviously found to be invalid and shall do or cause to be done all acts reasonably necessary inorder to amend this Agreement so as to reflect its original spirit and intent.

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9. This Agreement shall be governed by and construed in accordance with the laws of theProvince of British Columbia which shall be deemed to be the proper law thereof.

10. Nothing contained or implied in this Agreement shall fetter in any way the discretion ofthe City or the Council of the City. Further, nothing contained or implied in this Agreementshall derogate from the obligation of ITLP under any other agreement with the City or, if theCity so elects, prejudice or affect the City’s rights, powers, duties or obligation in the exercise ofits functions pursuant to the Community Charter or the Local Government Act, as amended orreplaced from time to time, or act to fetter or otherwise affect the City’s discretion, and therights, powers, duties and obligations of the City under all public and private statutes, by-laws,orders and regulations, which may be, if the City so elects, as fully and effectively exercised inrelation to the Lands as if this Agreement had not been executed and delivered by ITLP and theCity.

11. ITLP covenants and agrees that in addition to any remedies which are available under thisAgreement or at law, the City shall be entitled to all equitable remedies, including specificperformance, injunction and declaratory relief, or any combination thereof, to enforce its rightsunder this Agreement. ITLP acknowledges that specific performance, injunctive relief(mandatory or otherwise) or other equitable relief may be the oniy adequate remedy for a defaultby ITLP under this Agreement.

12. The City covenants and agrees that in addition to any remedies which are available underthis Agreement or at law, ITLP shall be entitled to all equitable remedies, including specificperformance, injunction and declaratory relief, or any combination thereof, to enforce its rightsunder this Agreement. The City acknowledges that specific performance, injunctive relief(mandatory or otherwise) or other equitable relief may be the only adequate remedy for a defaultby the City under this Agreement.

13. Time is of the essence of this Agreement.

14. Wherever the singular or masculine is used herein the same shall be construed asmeaning the plural, feminine or the body corporate or politic where the contents or the parties sorequire. If ITLP is comprised of more than one person or entity, then each such person andentity is jointly and severally bound by the representations, warranties, agreements, andcovenants of ITLP herein and any notice given or deemed to have been given at any time to anysuch person or entity shall be deemed to have been given at the same time to each other suchperson and entity.

15. This Agreement may only be amended in writing by agreement of all parties hereto andany such amendment may, upon execution, be deposited in the Land Title Office for registrationas an amendment to this Agreement.

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TO EVIDENCE THEIR AGREEMENT each of the parties has executed this Agreement as ofthe date noted below.

ISLAND TIMBERLANDS LIMITED PARTNERSHIP, by its General Partner ISLAN)LTIMBERLANDS GP LTD., by its authorized signatories, has executed this Agreement this 5’/t.day of______ 2015

Authorized Signatory

THE CITY OF POWELL RIVER, by its authorized signatories,has executed this Agreementthis.dayof t4A7 ,2015

zedanat


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SCHEDULE A

SUBJECT LICENSES

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j/1S/05 O8;3 FAX 250 246 6300 CATALYST PAPER FJ0O3

SCHED ULE ‘21”

Norske CanadaProperty Summary

Interest Granted

P well River

Tuesday. October 18 2005File No: 2604-ID Record No.: G-4258 Prov/State; BC

Common Name: TIMBER RESERVATTON ON BLOCK 36

Geographic Loc: POWELL RIVER Map Nn:

Document Reg No.:

Tenure: LTCENCEJPERMIT PID No:Legal Description: BLOCK 36 (SEE TiTLE FOR PULL LEGAL)

Property Use; TIMBER RIGHTS TotalSizuAbbrevated Legal: BLK 36

Operating Division: POWELL RIVER

Grantor NORSKE SKOG CANADA LIMITED

Grantee: WEYRI-1AEUSER COMPANY LIMITED

Grantee File No.:

Term: INDEFINITE Original Poc Date: May-29-1998

Payment Amount $1.00 Effective Date: Jun-01 1 998

Payment Frequency: TERM Expiry Date: INDEF[NITE

Payment Due I)ate: 01/06(98 Review Date: Jun-01-2006

Land Districtloounty; Regional DistrictlGounty:Municipal Area:

Roll Number:

Tax Paid By;

Assessment Area: Sehool DMrict:

Tax Cbss:

Timber Mark:

Related Properties: F-1824

Comments: LICENCE TERMINATES UPON HARVESTING OF TIMBER IN ACCORDANCEWITH HARV6T1NG AGREEMENT BEtWEN PACIFICA AND MB

ge1 Qf I

/--

Pacifica Papers

Property SummaryInterest Granted

Powell RiverJune 2, 1999

File No: 2604-10 Record No.: G-4258 ProvlState: BC

Common Name: TIMBER RESERVATION ON BLOCK 36

Geographic Loc: POWELL RIVER Map No:

Document Rag No.:

Tenure: LICENCEIPERMIT PID No:

Legal Description: BLOCK 38 (SEE TITLE FOR FULL LEGAL)

Land Use: TIMBER RIGHTS TotalSize

Pbbrevated Legal: BUC 36

Operating DMsion: POWELL RIVER

Granton PACIFICA PAPERS INC.

Grantee: MACMILLAN BLOEDEL UMITED

Grantee File No..:

Term: INDEFINITE Original Doc Date: May-29-1998

Payment Amount: $1.00 Effective Date: Jun-01-1998

Payment Frequency TERM Expiry Date: INDEFINITE

Payment Due Date: 01108198 RevIew Date: Jun-01-2008

Land DistrictlCounty: Regional District

Municipal ..reaICounty:

Roll Nurnber

Tax Paid By:

Assessment Area: School Dlstrlct

Tax Class:

Timber Mark:


Comments: UCENCE TERMINATES UPON HARVESTING OF TIMBER IN ACCORDANCEWiTH HARVESTING AGREEMENT BEflNEN PACIFICA AND MB

Page loll

,5581S4 British Columbia Ltd) NONEXCL(JSIVE

1. EFFEC11VE DATE: June 1, 1998- EXPIRY DATE: See Paragraph 20111)

2. UCENSOR: 558654 BrItish Columbia L. (Incorporation Number 558654)do 1900-700 West Georgia Street, P.O. Box 10354Vancouver, B.C.V7YIG5

3. UCENSEE MacMillan Bloedel Limited

925 West Georgia Street

Vancouver, B.C.

V6C 3L2

4. GRANT: The Licenser grants to the Licensee, the non-exclusive licence to enter and be upon that part of the ands” shown inred on the attached print and described as

Block 36, except (A) Those portions In Plans 8230, 8368, 8765, 9240, 101 96 12203, 12273, 13618,

13904, 14438, 14728. 14857,15509, and 15920 (B) Prt Outilned In Green on Explanatory Plan 3126

(C) Parcel 7 (Reference Plan 5671), and part Subdivided by Plan LMP25234, Distdct Lot 450, New

Westminster District, Plan 8096.

The Llcensor acknowledges that the Licensee has the fuN right aid prIvliee to harvest and remove

the timber growing on the lands as of May’31, 1998. A hérvesting plan Is to be reasonably agreed to

between the Licensee and the Ucensor. The limber Is deemed to be owned by the Licensee

5. PURPOSE: . This Licence is granted far the purpose of harvesting of meivhantible timber, excluding any poplar treesplanted by the Ucensor and no other purpose, upon the terms agreed to herein.

6. LICENCE FEES: $1.00

7. TAXES: On demand from the Llcensor, the Licensee shall pay taxes levied on the.tlmber to be harvested by the Licensee on the Lands.

8. MAINTENANCE AND REPAIR; The Licensee shall keep the Lands and the Licenser’s roads used In connection therewith In a neat and tidycondition and In a state of repair reasonably ‘acceptable to the Licenser. On termination, the Licensee shall leave the Lands and any thelJcensor’s roads used In a condition reasonably acceptable to the Licensor.

9. IMPROVEMENTS: No improvements may be placed on, or physical changes made to,,excepting the harvesting of the timber, the Lands withoutthe prior written consent of the Ucensor.

10. 11MBER The Licensee shall not cut or damage, or allow the cutting or damaging of the Llcensot’s poplar trees on the Lands without the priorwrltteø consent of the Licensor.

11. ROAD USE RULES: If any the Licenser’s road Is used in connection with this Licence, the Licensee shada) strictly observe all speed limits and traffic regulations, andb) suspend use of the Licensor’s roads whenever such use Is likely to cause excessive damage to them.

12. PROTECTION AGAINST F1RE: The Licensee shalla) lawfully dispose of all slashings and debris created by the Licensee on the Lands In a manner satisfactory to the Licenser,’b) keep the Lands free of flammable and!or explosive material,.c) have on the Lands stall times fire fighting tools and equipment as advised are necessary by the Ucensor,d) immediately notify the Licenser and the nearest Ministry of Forests office upon discovery of any fire In the vicinity of the Lands, ande) strictly observe the Ucensor and MInistry of Forests closure instructions with regard to forest fire hazards.

13. ENVIRONMENTAL RESPONSIBIUTY:a) The Licensee shall comply with all applicable environmental laws and Implement practicable measures to protect environmental quality and

human health.b) The Licensee shall use the Lands In a comiuienflally reasonable manner to prevent the occurrence of any adverse events and minimize

potential hazards that may affect the Llcehaor and W contractors, invitees, licensees, employees, agents and servants, the public and the• enyl r,ment and In connection with any occurrerice’the Licensee shall implement effective control measures and notify all concerned

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14. COMPLIANCE WITh LAWS AND REGULATIONS: The Licensee shall comply with all laws, by-laws, and regulations, Federal, Provincial orotherwise. ---- —---“-— —------

------------ —---—-- ---------— -—--- - --

15. ASSUMPTION OF RiSK AND UABIUTYI.. aCENSEE:a) the Licerisor has made no representations or given any warranties save as set forth herein,b) The licensee assUmes all risk of damage to property of or Injury to the licensee and the Licensee’s contractors, invitees, licensees.employees, agents and servants (“said Licensee”) In connection with the exercise of the privileges hereunder.c) The licensee shall pay for bli damage resulting directly or Indirectly from any act or omission of the said Licensee, whether negligent orotherwise, and shall reknburse the Ucénsor for all eqenses incurred for fighting tire resulting directly or Indirectly from said Licensee’s actsor omissions hereunder, whether negligent or otherwise.ci) The licensee shalt IndemnIfy and save harmless the Licensor against all claims or liabilities asserted by third persons resulting directly orkidlrectlyfrom said Ucensee’e acts or omissions whether negligent or otherwise

18. INSURANCE: The Licensee shall obtain and maintain during the term hereofa) Comprehensive general liability insurance including non-owned automobile, covering boduy Injury and property damage including loss ofuse thereof, and loss of use of tangible property whIch has not been physically Injured or destroyed. The policy shall also Include coveragefór

I) unlicensed and specially licensed vehIcles,ii) contractual liability covering the licensee’s liability under this licence; and

b) Motor vehicle liability covering all said Licensee’s licensed vehicles (owned and leased) exercising privileges granted under this Licence.The mlnimuni limits of liabIlity for (a) and (b) shall be $2,000,000 hiduahie. Such insurance shall be issued by an insurance company acceptableto the Licensor, and shall Include an endorsement requiring thirty (30) days notice to the Ucensor prior to cancellation. The licensee shell furnishevidence of the insurance presalbed In sub-paragraphs (a) and (b) above to the Licensor upon demand.

17. TERMINATION, SUSPENSION AND RENEWALa) if the Licensee defaults, all privileges hereunder terminate thirty (30) days after notice of default Is given by the Licenser to the Licensee, Ifthe default Is not remedied within such time, or if the Licensee Is not taking reasonable steps to do so. The licenser’s termination of this

Licence shall not prejudice the Ucensor’s right to collect damages on account of the licensee’s breach of any temi hereof.b)• My failure to exercise the Licenser’s right to terminate this licence In case of default does not constitute a waiver of the Licensee’sobligations to perform strictly In accordance with the terms of this licence. Any such right to terminate shall remain In effect and may beexercised as long as the default continues.c) if the Licensee requests a renewal of this Licence at least 3 (three) months before the Expiry Date, the Licenser may, but Is not

obligated to, grant a renewal on terms satisfactory to It.

18. NON-ASSIGNMENT: Neither this licence nor the privileges hereunder may be assigned In whole or In part by operation of law or otherwise,without the previous written consent of the Licenser, WhICh consent may not be unreasonably withheld.

19. NOTICES: All notices shall be written and deemed duly given If delivered by hand or mailed by registered mill, postage prepaid, addressed tothe party concerned at the address herein set forth or at such other address as may from time to time be communicated by notice. Notices shallbe deemed to have been received, if delivered by hand, on the day delivered, and, if mailed, on the thIrd day after posting unless there Is betweenthe time of mailing and actual receipt a mall strike, slowdown or other dispute Which might affect delivery of the mail, hi which case notice shall beonly effective when actually delivered.

20. OTHER TERMS:

I) The Licensee may harvest the timber at any time provided both the Licensor and the Licensee have reasonably agreed toa harvesting plan for the lands. If the Licensee has not developed a harvesting plan and the Licenser requires the timber tobe removed, the Licensor, acting reasonably, will provide the Licensee a minimum sIx (6) months written notice to develop amutually acceptable harvesting plan. The licensee will immedIately commence the planning and development of aharvesting plan for review and approvai by the Licensor, approval not to be unreasonably withheld.

Ii) The Licensor will cooperate fiQy with the Licensee to ensure the appropriate limber Mark Is secured from the MInistry ofForests to allow for the harvesting and removal of the timber from the lands.

iii) Once the timber has been harvested in accordance with the agreed to harvesting pian and removed from the lands bythe Licensee, this licence and all the rights inferred will terminate. My remaining timber not harvested by the Licensee atthis time will belong to the Licensor.

iv) Should the Licensor enter Into a sales agreement for the Lands with another third party prior to the Licensee’s harvestingof the Lands, the Licensor will ensure that this Licence agreement will become an attachment to the sales agreement andthat any new owner wili be bound by all the terms and conditions of this Ucence.

ZI. SIGNED:558654 BritIsh Columbia Ii. MacMUtBloedel LimitedPer M Tlmbqpds and Properties Division

________________

Pey(

t1#_tt,- -

A1rnatum I A J‘L. Hayley /1 uvrr

TypwPdnt Name // pgp SECREtARYManager, Property Admrnrstre on

_-

May29, 1998

Signature

ratpi?i Nam rr..

I CORPORATE SECRETARYPositiOn

MaV29199WDated Dated

ii

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II

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_.j,r8/05 08:35 FA.X 250 246 6300 CATALYST PAPER C1Ofl4

SCHEDULE “B”

NorskeCaradaProperty Summary

Interest GrantedPoprar Farm (Canada)Tuesday. October 18, 2005

File No; 3604-02 Record No.: G-4257 ProvlState; 60

Common Name: TIMBER RESERVATION ON CLOSEb ROAD

Geographic Loc: POWELL RIVER Thflap No:

Document Reg No.;Tenure: TIM9ER RESERVATION PID No; 010-274-847

Legal Description: THAT CLOSED PART OF POWELL RIVER WESTVIEN ROAD SHOWNOUTLINED IN GREEN ON REFERENCE PLAN 3470, LOC1< 36. DISTRICT LOT40, NWD, PLAN 8096

Property Use: TIMBER RIGHTS TotalSizeAbbrevated Legal: DL 450, ELK 36 PL 3470

Operating Division: POPLAR FARMS (CANADA)

Grantor PACIFICA POPLARS LTD.

Grantee: WEYERHAEUSER COMPANY LIMITEDGrantee File No.:

Term; INDEFINITE Original Doc Data: May-29-1998

Payment Amount $1.00 Effective Date: Jun-01-1998

Payment Frequency: TERM Exphy Date: ILDEF1N1TE

Payment Due Date: 61111998. Review Date: Jun-01-2006

Land DistrlctlCounty: NEW WESTMINSTER RegionaL District POWELL RIVER- - tCounty:Municipal Area:

Roll Number:

Tax Paid By:

Assessment Area: School District;Tax Class:

Tmiber Mark:

Related PropertIes: F-1751

Comments: LICENCE TERMINATES UPON HARVESTING OF TIMBER IN ACCORDANCEWITH RESERVATION

Pane I of 1

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5G!-8ritish Columbia Ltd.Q I -

NON-EXCLUSIVE

1. EFFECTIVE DATE: June 4, 1998 — EXPlRYDATE s Paragraph 20 ill)

2. UCENSOR 5586S4 British Columbia Ltd. (incorporation Number 568654)cIa 1900-700 West Georgia Street, P.0 Box 10354Vancouver, B.C.V7YIG5

3. LICENSEE: MacMillan lcedel Urnited

925 WestGeocia Street —— --

Vancouver, B.C.

V60 312

4. GRANT: The Ucensor grants to the LIcensee, the non—exclusive licence to enter and be upon that pert of the “Lands” shown inred on the attached print and described asThat closed part of the Powell Rlver-Wostvicw Road shown outilned In green on Reference Plan

3470, Block 36, DistrIct Lot 450, New Westminster District, Plan 6096.

- The Licensor acknowledges that the Licensee has the full right and privilege to harvest, and remove

the timber growing on the lends of May 31, 1998. Ahaivesting plan is to be reasonably agreed lo

_betwri the Ucensee and the Licensor. The limber is deemed to be owned by the licensee

5. PURPOSE: This Ucence Is granted for the purpose of - harvesting of merchantible timber, excluding any poplar treesplanted by th Licerisor arid ro other purpose, upon the terms egread to herein.

6. UCENCCPESS: $1.00

7. TAXES: On demand from the Licensor, the LIcensee shall pay iazs levied on the timber to be harvested by the Licensee on the Lands.

8. MAINTENANCE AND REPAIR The Licenses shall keep the Lands grid the Ucensor’s roads used in connection therewith In a neat and tidycondition and In a state of repair reasonably acceptable to the Licensor. On temitnetien, the Licensee shall leave the Lands and any theUcenao?s roads used Fn a condition reasonably acceptable to the licenser.

9. IMPROVEMENTSr No Improvements may be placed on, or physIcal -changes made in, excepting the hnresllrig of the timber, the Lands wtthoLxtthe prior written consent of the Ucensor.

10. TIJi6BER The LIcensee shall not cut or damage, or allow the cttJng or damaging of the Ucerisor’s poplar frees on the Lands without -the priorwriseri consent of the Licenser.

11. ROAD USE RULES: If any the Ucenso?s road Is used in confection with this Licence, the LIcensee shalla) strictly observe all speed limits end traffic regulations, andb) suspend use of the LIcenser’s roads whenever such use Is fflely to cause excessive damage to them.

12. PROTEcflONAGAlNSTFlRE The Licensee shalla) lawfully dispose of all slshins and debris created by the Licensee on the Lands in a manner satisfactory to the Licenser,b) keep the Lands free of flammable endlur explosive material,c) have an the L.artds stall times fire fighting tools and equipment as advised era necessaty bytes Licenser,d) Immediately notity the Licenser and the nearest Ministry of Forests ofitee upon discovery of any fire in the vicinity of the Lands, anda) strictly ebserva the Licenser end Minlstiy of Forests dosure InbuctTons with regard to forest tire hazards.

13. ENVIRZNMENTAL RaSPONSIaIUTha) The Licensee shall comply with all appliceble envfronmenfal laws and implement pradiceble measures to protect environmental quality end

humeri health,b) The LIcensee shall use the Lands In a ocirnmeroiaily reasonable manner Ia prevent the occurrence of any adverse events and niinlmlze

potoi1taiazards that may aflect the LIcenser and Ifs conimotros. lrwffasa, flcenanes, employees, agents and servants, the public and the- . eradranmant arid in connection with any occurrence the LIcensee shall implement, effective control rfieasures and notify all concerned

parlied. “ . •

14. COMPLIANCE WItH LAWS AND REGULATIONS: The Licensee shall comply with all laws, by—laws, and regulations, Federal, Provincial orotherwise. -

15. ASSUMPTION OF RISK AND UABILIT( OF LICENSEE:—s--—theoenser-has-madeoreprescntations-org1en-anyivrondese-aa-set-forth4iereIn-

-- -- —- —---- - —-——- - - - -- -

b) The Licensee assumes all risk of damage to property of, or injury to the Licensee and the Ucense&s contractors, invitees, licensees.employees, agents end selvants rsaid Licensee”) In connection with the exercise of the privileges hereunder.

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c) The Licensee shall pay for all dam Lilting directly or indfredlly from any act ore n of the said Licensee, whether nsSent rotherwise, arid shalt reimburse the orfor all epet1ses incurred lbrtlghtlng lire rsau directly or indirectly from said Ltcensce’cthor omissions hereunder, whether noligerrt or otherwise.

d) The Licensee traU Indemnify and save heanless the Ucensor egalnzt all claims or IiabWrtjee asserted by third persons resulting directly orindirectlyfrom said Licensee’s acts or omissions whether negligent or otherwise.

16. INSIJRANCE The Llcensee shall obtain and maintain during the term hereofa) Comprehensive general liability insurance including non-owned automobile. COVellflg bodily Injury and property damege irng Io of

use thereof and loss of use of tang ibis properly which has not been physically Injured or destroyed. The policy shall also Include coverageforI) unhicerised and specialty Ilcensad vctiices,ii) ContractUal llSblDty covering the L1CaTISeeS IIsbillty under this Lnc and

b) Motor vehicle Iiabilfi covering all said Licensee’s licensed vafliotes (owned arid leased) exercising privileges granted under this Licence.The minirmirn limits of liability for (a) and (b) ahell be $2,000,000 Inclusive. Such insurance shalt be issued by an Insurance company acceptableto the Licensor, and shall Include an endorsement requiring thIrty (30) days notice to the Licenser prior to cancellation. The Licensee shall fomlsheVidence of the insurance prescribed fri sub-paragraphs (a) and (b) above to the Licenser upon demand.

17 TERMINATiON. SUSPENSLON AND RENEWAL:a) If the Licensee defaults, all privileges he eundortsrrninate thirty (30) days after notice of default is given by the LJcensor to the Licensee, if

the default is not remedied within such time, or If the Licensee Is not taking reasonable stops to do so. The Licensor’s terminailon of thisUcerice Shell 1101 prejudice the Licenser’s rightto collect dernages on account of the Licerisse’s breach of any term hereof.

b) Any failure to exerdse the Licenser’s nght to terminate this Licence in cose of default does no: constitute a waiver of the Licenseesobligations to perform strrdly In accordance with the tems of this Licence. Any such ri9ht to terminate shall remain in effect arid may be

as long as the default continuesc) If the Licensee requests a renewal ofthis Licence at least 3 (three) - months before the Expiry Date, the Licenser may, bUt Is not

obligated to, grt a renewal on terms setisfactoty to it

18 NON-ASSIGNMENT Neither this Ucerce nor the priviteges hereunder may be assigned in whole or In part by operation of law or otherwisewrthcrut the previous written consent of the L.Jcensor which consent may riot be unreaaonablywTttdleld

iS NOTICES All notices shall be written end deemed duly given If delivered by hand or mailed by registered mail postage prepald, addressed tothe party concerned at the address herein bet forth or at such other addis as may from tone to time be conimunicated by notice. Notices shallbe deemed to have been received if delivered by hand on the day delivered, and If mailed, on the third day after posting unless there Is betweenthe time of mailing arid actual receipt a mall strike slowdown ci- other disputo whIch might affect delivery of the trial! in which case notice shall beonly effective when actually delivered.

20. OTHCR TERMS:

I) The lJcensee may harvest the timber at any time provided both the Licenser arid the Ucerisee have reasonably agreed toa harvesting pLan lbr the lands. If the Licensee has not developed a harvesting plan and the Licenser requires the timber tobe removed, the Ucensor acting reasonably, will provide the Licensee a minimum six (6) months writtert notice to develop amutually acceptable harvesting plan. The licensee will immediately commence the planning and development of aharvesting plan for review and approval by the Ucensor, approval riot to be unreasonably withheld.

ID The Llcensor will cooperate fUlly with the Licensee to ensure the appropriate Timber Mark is secured from the Ministry ofForests to ollow for the harvesting and removal of the timberfrom the lends.

21.

iii) Once the timber has been harvested itt accordance with the agreed to harvesting plan arid removed from the lands bythe Licensee, thIs licence and all the rights irrfrred will terminate. Any remaining timber not harvested by the Licensee atthis time will belong to the licenser,

lv) Should the Licensor enter Into a sales agreement for the Lands with another third party prior to the Licensee’s harvestingof the Lands, the Licenser will ensure that this Licence agreement will become an aachment to the sales agreement andthat any new owner will be bound by all the terms and conditions of this Ucerice.

SIGNED;558654 BrItish Columbia LtflPer

Signeiri,e

TypHrtf)&e .. MTlEiiCORPORATE SECREZAR

Posftion1999

MacMiIIat,,edeL limitedrtmbeha4nd Properties DivisionPer

a7Typ&PnnL Name cORPORATE SEtRErA(Manger, Pperty Admlnistrati n —-

Posh fanMay29, 1098Dateo’

N

..1Q./18/O5 O836 FAX

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U0

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SCHEDULE “C”

File No:

Common Name:

Tenure:

Legal Description:

Property Use:

Abbrevated Legal:

Operating Division:

Norske CanadaProperty Summary

Interest GrantedPowell River

Monday, August 04, 2003

2101-18 Record No.: G-4260 ProvlState: BC

TIMBER RESERVATION ON WILLINGTON BEACH TRAIL

Grantor: NORSKE SKOG CANADA LIMITED

Grantee: WEYERHAEUSER COMPANY LIMITED

Grantee File No.:

Term: INDEFINITE

Payment Amount $1 00

Payment Frequency TERM

Payment Due Date 01/06/98

Land DistrictlCounty:

Municipal Area:

Roll Number:

Original Doc Date: May-29-1998

Effective Date: Jun-01-1998

Expiry Date: INDEFINITE

Review Date Jun 01-2008

Regional District!County:

School District:

Geographic Loc: POWELL RIVER Map No:

Document Reg No.:

LICENCE/PERMIT PID No:

BLOCK 43 (SEE LEGAL FOR FULL DESCRIPTION>

TIMBER RIGHTS TotalSize

BLK43

POWELL RIVER

Tax Paid By:

Assessment Area:

Tax Class:

Timber Mark:


Comments: LICENCE TERMINATES UPON HARVESTING OF TIMBER IN ACCORDANCEWITH HARVESTING AGREEMENT BETNEEN MB AND PACIFICA

Page 1 of 1

EFFECTIVE DATE: June 1 • 1998 EXPIRY DATE: see Paragraph 20 iii)

LICENSOR: MB Paper Limited rMBP’)do 1900 -700 West Georgia Street. P.O. Box 10354Vancouver, B.C.V7Y tG5

LICENSEE: MacMillan Bloedel Limited

925 West Georgia Street

Vancouver, B.C.

V6C 3L2

MBP grants to the Licensee, the non-exclusive licence to enter and be upon that part of the “Lands” shown in red on theattached print and described as

Block 43, except portions included in Plans 12273 and 14778, arid Explanatory Plans 5457 and 7624,

District Lot 450, Group 1, New Westminster District, Plan 8096

MBP acknowledges that the Licensee has the full right and privilege to harvest and remove the

timber growing on the lands as of May 31, 1998. A harvesting plan is to be reasonably agreed to

between the Licensee and MBP. The Timber is deemed to be owned by the Licensee

This Licence is granted for the purpose of harvesting of merchantible timber, excluding any poplar trees —

planted by MBP and no other purpose, upon the terms agreed to herein.

$1.00

TAXES On demand from MBP the Licensee shall pay taxes levied on the Umber to be harvested by the Licensee on the Lands

MAINTENANCE AND REPAIR: The Licensee shall keep the Lands and MBP roads used in connection therewith In a neat and tidy conditionand In a state of repair reasonably acceptable to MBP. On termination, the licensee shall leave the Lands and any MBP roads used in acondition reasonably acceptable to MBP.

IMPROVEMENTS: No Improvements may be placed on, or physIcal changes made to, excepting the harvesting of the timber, the Lands withoutthe pnor written consent of MBP

0 TIMBER The Licensee shall not cut or damage or allow the cutting or damaging of MBP poplar trees on the Lands without the pnor writtenconsent of MBP.

II. ROAD USE RULES: If any MBP road Is used in connection with this Licence, the licensee shalla) strictly observe all speed limits and traffic regulations, andb) suspend use of M8P roads whenever such use Is likely to cause excessive damage to them.

12 PROTECTION AGAINST FIRE The Licensee shalla) lawfully dispose of all slashings and debns created by the Licensee on the Lands in a manner satisfactory to MBPb) keep the Lands free of flammable arid!or explosive material,C) have on the Lands at all times fire fighting tools and equipment as advised are necessary by MBP,d) Immediately notify MBP and the nearest Ministry of Forests office upon discovery of any fire in the vicinity of the Lands, ande) strictly observe MBP and Ministry of Forests closure instructions with regard to forest fire hazards.

13. ENVIRONMENTAL RESPONSIBILITY:a) The Licensee shall comply with all applicable environmental laws and implement practicable measures to protect environmental quality and

human health.b) The Licensee shall use the Lands in a commercially reasonable manner to prevent the occurrence of any adverse events and minimize

potentlal.hazards that may affect MBP and it’s contractors, invitees, licensees, employees, agents and servants, the public and theenvlroriment and in connection with any occurrence the licensee shall Implement effective control measures and notify all concernedparties.

14. COMPLIANCE WITH LAWS AND REGULATIONS: The Licensee shall comply with all laws, by-laws, and regulations, Federal, Provincial orotherwise.

15. ASSUMPTION OF RISK AND LIABILITY OF LICENSEE:a) MBP has made no representations or given any warranties save as set forth herein.b) The Licensee assumes all risk of damage to property of, or injury to the Licensee and the licensee’s contractors, invitees, licensees,

employees, agents and servants (“said Licensee”) in connection with the exercise of the privileges hereunder.

Papr Limited I • NoN-EXCLUSlV. .

LICENCE.“ -I’

GRANT:

I. PURPOSE:

LICENCE FEES:

) The Licensee shall pay for all damag ulting directly or indirectly from any act or amiss f the said Licensee, whether negligent orotherwise, and shall reimburse MBP I expenses incurred for fighting fire resulting dire r indirectly from said Licensee’s acts oromissions hereunder, whether negligent or otherwise. -

d) The Licensee shall Indemnify and save harmless MEP against all claims or liabilities asserted by third persons resulting directly or indirectly...from said Licensee’s acts or omissions whether negligent or otherwise.

INSURANCE: The licensee shall obtain and maintain during the term hereofa) Comprehensive general liability insurance including non-owned automobile, covering bodily injury and property damage including loss of

use thereof, and loss of use of tangible property which has not been physicafly injured or destroyed. The policy shall also include coveragefor.I) unlicensed and specially licensed vehicles,U) contractual liability covering the Licensee’s liability Under this Licence; and

b) Motor vehicle liability covering all said Licensee’s licensed vehicles (owned and leased) exercising privileges granted under this Licence.The minimum limits of liability for (a) and (b) shall be $2,000,000 inclusive. Such insurance shall be issued by an insurance company acceptableto MBP. and shall include an endorsement requiring thirty (30) days notice to MBP prior to cancellation. The licensee shall furnish evidence ofthe insurance prescribed in sub-paragraphs (a) and (b) above to MBP upon demand.

TERMINATION. SUSPENSION AND RENEWALa) If the licensee defaults, all privileges hereunder terminate thirty (30) days after notice of default is given by MBP to the Licensee, if the

default is not remedied within such time, or if the Licensee is not taking reasonable steps to do so. MBP’s termination of this Licence shallnot prejudice MBP’s right to collect damages on account of the Licensee’s breach of any term hereof.

b) Any faIlure to exercise MB P’s right to terminate this Licence in case of default does not constitute a waiver of the Licensee’s obligations toperform strictly in accordance with the terms of this Ucence. Any such right to terminate shall remain in effect and may be exercised aslong as the default continues.

c) If the Licensee requests a renewal of this licence at least 3 (three) months before the Expiry Date, MBP may, but is not obligated to,grant a renewal on temis satisfactory to it.

L NON-ASSIGNMENT: Neither this Licence nor the privileges hereunder may be assigned in whole or in part by operation of law or otherwise,without the previous written consent of MBP. which consent may not be unreasonably withheld.

NOTICES: All notices shall be written and deemed duly given if delivered by hand ormailed by registered mail, postage prepaid, addressed tothe party concerned at the address herein set forth or at such other address as may from time to time be communicated by notice. Notices shallbe deemed to have been received, if delivered by hand, on the day delivered, and, If mailed, on the third day after posting unless there is betweenthe time of mailing and actual receipt a mail strike, slowdown or other dispute which might affect delivery of the mail, in which case notice shall beonly effective when actually delivered.

). OThER TERMS:

i) The Licensee may harvest the timber at any time provided both MBP and the Licensee have reasonably agreed to aharvesting plan for the lands. If the Licensee has not developed a harvesting plan and MBP requires the timber to beremoved, MBP, acting reasonably, will provide the Licensee a minimum six (6) months written notice to develop a mutuallyacceptable harvesting plan. The licensee will immediately commence the planning and development of a harvesting plan forreview and approval by MBP, approval not to be unreasonably withheld.

ii) MBP will cooperate fully with the Licensee to ensure the appropriate Timber Mark is secured from the Ministry of Foreststo allow for the harvesting and removal of the timber from the lands.

lii) Once the timber has been harvested in accordance with the agreed to harvesting plan and removed from the lands bythe Licensee, this licence and all the rights inferred will terminate. Any remaining timber not harvested by the Licensee atthis time will belong to MBP.

iv) Should MBP enter Into a sales agreement for the Lands with another third party prior to the Licensee’s harvesting of theLands, MBP will ensure that this Licence agreement will become an attachment to the sales agreement and that any newowner will be bound by all the terms and conditions of this Licence.

Mac Bloedel LimitedTlmt)Øf)hds and Properties DivisionPep’7_____4’—---j

-

UUHT L. ,Vñ14ETTCORPORATE SECRETARY

i- 1/U

ç 4OFFTEY E_MYNETr<GGRPOR SECRETAR

éSlgaature ILG. HayleyTypeiPrint NameManager, Property AdministrationPositionMay 29, 1998Uäfdd

!1. SIGNED:MB Paper LimitedPer

Signature 9TYPeJPrinçyame

PositionMay29, 1998

Dated

I.SCHEDULE “D”

ASSIGNMENT OF TIMBER LICENCE AGREEMENT

CATALYST PAPER CORPORATION and PACEFICA POPLARS LTD. (the “Assignors”) hereby assign toPRSC LAND DEVELOPMENTS LTD , as General Partner ofthe PRSC Limited Partnership (the “Assignee”)all of their respective right, title, interest and estate as Licensors in and to the Timber Licences listed on theSchedule attached hereto PROVIDED THAT in the case of the Licences numbered 3, 4 and 5 on the attachedSchedule, the Assignors shall retain all their respective right, title, interest and estate in and to those Licencesinsofar as they cover those portions of the lands not included in the legal descriptions set out in the attachedSchedule.

Wherever a single Timber Licence covers lands owned by the Assignors (or either ofthem) and lands owned by theAssignee, the parties shall co-operate to carry out the obligations and exercise the rights of each as LicensorPROVIDED THAT each will maintain control for any matter or thing in the Licences pertaining to the landscovered by their respective licences.

The Assignee acknowledges receipt ofcopies of the Licences described on the attached Schedule and agrees to bebound by all the terms and conditions of such Licences with respect to the lands described on the attachedSchedule.

This Assignment binds the parties hereto, their successors and assigns.

DATED for reference this .2,’ct day of 8 u1 , 2006.

CATALYST PAPER CORPORATION PACIFICA POPLARS LTD.

Per: Per: O4Authorized Signatory Authorized Signatory

Per: Per:Authorized Signatory Authorized Signatory

PRSC LAN]) DEVELOPMENTS LTD.,as General Partner of the PRSC LIMITEDPARTNERSEIIP

Per:Walter Paul

Per:_________Stewart Brett Alsgard

Per:_________I vii nnwn

SCHEDULE

TIMBER LICENCES

EXISTING PARCELS:

PU) 023-209-119, Lot B, District Lot 450, Group 1, New Westminster District, Plan LMP25234

(3.17S hectares/7.84 acres). Reference: Lot between Timberlane & Hemlock (behind Brooks)

Weyerhaeuser (Cascadia) Timber Reservation File 3605-02 Record #0-4256

Licencee: Island Timberlands Limited Partnership

2 P1]) 010-267-409, Block 56, Except part in Plan 12767, Distnct Lot 450, Plan 8096,

(approximately 115 acres) Reference Wildwood, both sides ofsewage lagoon, Italian Hall

Weyerhaeuser (Cascadia) Timber Rights (unregistered) File 3606-03 Record No G-4261

Licencee Island Timberlands Limited Partnership

NEWLY SUBDIVIDED LANDS

3. Lot A, District Lot 450, Group 1, New Westminster District, Plan BCP 23890

Contains approximately 96.6 hectares (238.70+ acres). Reference: Gibson s Beach and south of

Sliammon Firit Nations

Weyerhaeuser/Cascadza Timber Reservation File 2 703-03 Record G-4259


4 Lot A, Distnct Lot 450, Group 1, New Westminster District, Plan BCP 23887

Contains 761 hectares (.1880) acres Reference South ofTimberlane Ave and borders Marine

Ave on the west and the BCHpower line right ofway on the east

Timber ReservatzonlCascadia File 3 604-02 Record G4257 & G4258

Lzcencee Island Timberlands Limited Partnership

5 Lot C, District Lot 450, Group 1, New Westminster District, Plan BCP 23887

Contains 128 hectares (316 acres) Reference Bordered by the BCHpower line right ofway on

the wes4 Cranberiy St on the north, TimberlaneAve on the south and Dieppe Ave on the east

Timber Reservation/Cascadia File 3 604-02 Record G4257 & G4258

Licencee Island Timberlands Limited Partnership

6 Lot 1, District Lot 450, Group 1, New Westminster District, Plan BCP 23888

Contains 13 8 hectares (341 acres) Reference Millennium Park east ofMarine Ave (Lot 1 is

slated to becomepart ofMillennium Park)

Timber Reservation File No. 2101-18 Record G4260


7. Lot 2, District Lot 450, Group 1, New Westminster District, Plan BCP 23888

Contains 393 hectares (971 acres) Reference Marine Business Parksouth ofmill remainder lands,

and east ofMarine Ave

Timber Reservation File No. 2101-18 Record G4260

Licene: Island Timblands Limited Pwership

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SCHEDULE I

ALTERNATE POTENTIAL TIMBER CUTTING SITES

Willingdon Beach Campsite Area

• Complex Way

a City High Tech Park Area (Penticton)

• Airport Reserve Lands

a Any Alternate City-owned Development Area

4,

ASSIGNMENT OF TIMBER LICENCE AGREEMENT

CATALYST PAPER CORPORATION and PACIFICA POPLARS LTD. (the “Assignors”) hereby assign toPRSC LAND DEVELOPMENTS LTD., as General Partner of the PRSC Limited Partnership, (the “Assignee”)all of their respective right, title, interest and estate as Licensors in and to the Timber Licences listed on theSchedule attached hereto PROVIDED THAT in the case of the Licences numbered 3, 4 and 5 on the attachedSchedule, the Assignors shall retain all their respective right, title, interest and estate in and to those Licencesinsofar as they cover those portions of the lands not included in the legal descriptions set out in the attachedSchedule.

Wherever a single Timber Licence covers lands owned by the Assignors (or either ofthem) and lands owned by theAssignee, the parties shall co-operate to carry out the obligations and exercise the rights of each as LicensorPROVIDED THAT each will maintain control for any matter or thing in the Licences pertaining to the landscovered by their respective licences.

The Assignee acknowledges receipt of copies of the Licences described on the attached Schedule and agrees to bebound by all the terms and conditions of such Licences with respect to the lands described on the attachedSchedule.

This Assignment binds the parties hereto, their successors and assigns.

DATED for reference this .t’1C day of Pt’-.’ 2006.

CATALYST PAPER CORPORATION

Per:________Authorized Signatory

Per:

_______________________________

Per:Authorized Signatory

PRSC LAN]) DEVELOPMENTS LTD.,as General Partner of the PRSC LIMITEDPARTNERSHIP

______

Per: LAJ’QJ%..-’ ‘c:::Walter Paul

Per:4cStewart Brett Aisgard

Per: 4JALyn rown


Per:

PACIFICA POPLARS LTD.

QL4Authorized Signatory

Ii

SCHEDULE

TIMBER LICENCES

EXISTING PARCELS:

1. PID 023-209-119, Lot B, District Lot 450, Group 1, New Westminster District, Plan LMP25234(3.175 hectares/7.84 acres). Reference: Lot between Timberlane & Hemlock (behind Brooks)

Weyerhaeuser (Cascadia) Timber Reservation File 3 605-02 Record #G-4256Licencee: Island Timberlands Limited Partnership

2. PU) 010-267-409, Block 56, Except part in Plan 12767, District Lot 450, Plan 8096,(approximately 115 acres). Reference: Wildwood, both sides ofsewage lagoon, Italian Hall

Weyerhaeuser (Cascadia) Timber Rights (unregistered) File 3606-03 Record No G-4261Licencee Island Timberlands Limited Partnership

NEWLY SUBDIVIDED LANDS

3 Lot A, District Lot 450, Group 1, New Westminster District, Plan BCP 23890Contains approximately 966 hectares (238 70+ acres) Reference Gibson s Beach and south ofSliammon First Nations

Weyerhaeuser/Cascadia Timber Reservation File 2 703-03 Record G-4259Licencee: Island Timberlands Limited Partnership

4. Lot A, District Lot 450, Group 1, New Westminster District, Plan BCP 23887Contains 76.1 hectares (188.0) acres. Reference: South of Timberlane Ave and borders MarineAve on the west and the BCHpower line right ofway on the east

Timber Reservation/Cascadia File 3604-02 Record G4257 & G4258Licencee: Island Timberlands Limited Partnership

5. Lot C, District Lot 450, Group 1, New Westminster District, Plan BCP 23887Contains 12 8 hectares (31 6 acres) Reference Bordered by the BCHpower line right ofway onthe west, Cranberry St on the north, Timberlane Ave on the south and Dieppe Ave on the east

Timber Re.servation/Cascadia File 3604-02 Record G4257 & G4258Licencee Island Timberlands Limited Partnership

6 Lot 1, Disthet Lot 450, Group 1, New Westminster District, Plan BCP 23888Contains 13 8 hectares (341 acres) Reference Millennium Park east ofMarine Ave (Lot 1 isslated to becomepart ofMillennium Park)

Timber Reservation File No 2101-18 Record G4260Licencee: Island Timberlands Limited Partnership

7. Lot 2, District Lot 450, Group 1, New Westminster District, Plan BCP 23888Contains 39.3 hectares (97.1 acres). Reference: Marine Business Park south ofmill remainder lands,and east ofMarine Ave

Timber Reservation File No. 2101-18 Record G4260Licencee: Island Timberlands Limited Partnership

agreement this agreement dated for reference may 4, 2015

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