EXHIBIT 10.20
Licence Number A 59593
PROVINCE OF BRITISH COLUMBIA
Ministry of Forests
TIMBER SALE LICENCE - SALVAGE
THIS LICENCE, dated, July 21 1998.
BETWEEN:
THE DISTRICT MANAGER, on behalf of
HER MAJESTY THE QUEEN IN RIGHT
OF THE PROVINCE OF BRITISH COLUMBIA,
0000 00xx Xxxxxx
Xxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
(the "District Manager")
AND:
Licensee Name: Aquatic Cellulose LTD
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Address: Box 1952 3704 32nd Street Xxxxxx
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Postal Code: X0X 0X0 Phone: (000) 000-0000
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(the "Licensee")
WHEREAS:
A. On June 9, 1997 the District Manager gave effect to a forest development
plan identifying the areas designated for harvest under this Licence,
except for areas exempted from the requirement for a forest development
plan;
B. The parties have entered into this Licence pursuant to SECTION 23(1)(e) OF
THE FOREST ACT;
THE PARTIES agree as follows:
1.00 GRANT OF RIGHTS AND TERM
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1.01 Subject to this Licence and the Acts, regulations and standards
referred to in paragraph 7.01, the Licensee
(a) may during the term of this Licence harvest Crown timber from the
areas of land designated for harvest on the map attached to this
Licence, and
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Licence Number A 59593
(b) may, where necessary, fell trees qualifying as danger trees
according to Worker's Compensation Board regulations within
one and a half tree lengths of the area referred to in
paragraph 1.01 (a).
(c) for this purpose may enter into these areas.
1.02 The term of this Licence is 3 months, beginning on July 21, 1998
and expiring on October 31, 1998.
1.03 The District Manager may grant extensions to the term of this
Licence on such terms and conditions as the District Manager
considers appropriate, provided the term of this Licence,
including any extensions granted under this paragraph, does not
exceed one year.
2.00 SPECIAL CONDITIONS AND REQUIREMENTS
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2.01 The Licensee must comply with the conditions and requirements set
out in Schedule "A" and Schedule "B".
3.00 TIMBER XXXX
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3.01 The timber xxxx for this Licence is:
4.00 SCALE BASED STUMPAGE
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4.01 The Licensee will pay to the Crown immediately upon receipt of a
notice on behalf of the Crown, in respect of Crown timber
harvested under this Licence, stumpage at fixed rates determined
under the Forest Act and Regulations. The timber and stumpage
rates for this Licence are:
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Species and/or
Special Forest Products Stumpage Rate
$/m3
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Sunken timber 25 cents
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Grades 3, 4, 5, 6 499m/3/ $0.25
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Total Volume All Grades: 499m/3/
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4.02 The Licensee must ensure that:
(a) all timber harvested under this Licence is scaled, and
(b) the scale of the timber is conducted properly in accordance
with the requirements of the Forest Act and the regulations
made under the Act.
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Licence Number A 59593
4.03 Scale returns for all timber cut and removed from the licence area
shall be submitted as directed in the authorization letter(s) of
the scale site(s) to which the timber is directed for scaling.
5.00 MAXIMUM TIMBER VOLUME ALLOWED
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5.01 The maximum timber volume allowed for harvesting under this
License is 499m/3/.
5.02 When the Licensee's harvested volume approaches the maximum
specified in paragraph 5.01, the Forest Official in charge must be
informed.
5.03 Any harvested volume over the allowed maximum will be billed to
the Licensee at the current average Small Business billing rate,
and may result in trespass charges, forfeiture of the security
deposit, and disqualification from the salvage program.
6.00 LEGISLATIVE FRAMEWORK
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6.01 This Licence is subject to the Forest Act, the Forest Practices
Code Act and their regulations and standards.
6.02 The Licensee must obtain a Logging Plan approved under the Acts and
regulations referred to in paragraph 6.01 prior to the commencement
of any harvesting activities.
6.03 The Licensee, it employees, agents, and contractors must comply
with all specifications in the Logging Plan referred to in
paragraph 6.02.
7.00 FELLING, BUCKING AND UTILIZATION SPECIFICATIONS
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7.01 The Licensee must fell, buck, and utilize in accordance with the
specifications set out in the attached Schedule B.
8.00 FINANCIAL AND DEPOSITS
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8.01 In addition to any money payable by the Licensee under the Acts or
regulations referred to in paragraph 6.01 in respect of this
Licence or a road permit, the Licensee must pay to the Crown,
immediately upon receipt of a notice, statement or invoice issued
on behalf of the Crown, stumpage under Part 7 of the Forest Act in
respect of timber harvested under this Licence or a road permit, at
rates determined, predetermined and varied under section 105 of
that Act,
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License Number A 59593
8.02 The annual rent will be $ N/A based on $1.25 x __________ xx
xxxxx area under this permit. Payment number:__________________
or
The operational area under this permit is equal to or less than 20 ha;
therefore, no rent is due. > less than 20 hectares
8.03 During the term of this Licence, the Licensee must maintain with the
Crown a deposit in the amount prescribed under the Forest Act or the
regulations made under that Act, in a form acceptable to the Minister,
as security for the Licensee's performance of its obligations under or
in respect of this Licence or a road permit. The amount of the deposit
for this Licence will be $1500.00. Payment number 163768.
8.04 If the District Manager gives the Licensee a notice that an amount has
been taken under this Part from the deposit, the Licensee, within four
weeks of the date on which the notice is given, must pay to the Crown,
in a form acceptable to the Minister, an amount sufficient to
replenish the deposit.
8.05 If the Licensee fails
(a) to pay money that the Licensee is required to pay to the Crown
under
(i) this Licence or a road permit, or
(ii) the Acts or regulations referred to in paragraph 6.01 in
respect of this Licence or a road permit, or
(b) to otherwise perform its obligations under
(i) this Licence or a road permit, or
(ii) the Acts, regulations or standards referred to in paragraph
6.01 in respect of this Licence or a road permit,
the District Manager, after at least four weeks notice to the
Licensee, may take from the deposit
(c) an amount equal to the money which the Licensee failed to pay,
(d) an amount sufficient to cover all costs incurred by the District
Manager in remedying the Licensee's failure to perform its
obligations, or
(e) an amount equal to the District Manager's estimate of the costs
which the District Manager could reasonably expect to incur in
remedying the Licensee's failure to perform its obligations, and
for that purpose a security included in the deposit may be
realized.
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Licence Number A 59593
9.00 LIABILITY AND INDEMNITY
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9.01 The License must indemnify the Crown against and save it
harmless from all claims, demands, suits, actions, causes of
action, costs, expenses and losses faced, incurred or suffered
by the Crown as a result, directly or indirectly, of any act or
omission of
(a) the Licensee, or
(b) any other person who, on behalf of or with the consent of
the Licensee, engages in any activity or carries out any
operation, including but not restricted to harvesting
operations under or associated with this License or a road
permit.
9.02 Amount taken under Part 8.00 from the deposit or a special
deposit, are in addition to and not in substitution for any
remedies available to the Crown in respect of a default of the
Licensee.
10.00 LIMITATION OF LIABILITY
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10.01 The Crown is not liable to the Licensee for injuries, losses,
expenses, or cost incurred or suffered by the Licensee as a
result, directly or indirectly, of an act or omission of a
person who is not a party to the Licence, including but not
restricted to an act or omission of a person disrupting,
stopping or otherwise interfering with the Licensee's operations
under this Licence by road blocks or other means.
11.00 TERMINATION
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11.01 If this Licence expires or is surrendered, cancelled or
otherwise terminated, title to all
(a) improvements, including roads and bridges, constructed
under the authority of this Licence, and
(b) timber, including logs and special forest products,
harvested under the authority of this Licence and still
located on Crown land, will vest in the Crown, without
right of compensation to the Licensee.
11.02 If the Licensee commits an act of bankruptcy, makes a general
assignment for the benefit of its creditors or otherwise
acknowledges its insolvency, the District Manager may, in a
notice given to the Licensee, cancel this Licence.
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Licence Number A 59593
13.00 W.C.B. REQUIREMENTS
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13.01 The Licensee is the prime contractor for purposes of the Workers'
Compensation Board and shall conduct operations in compliance with
the Workers' Compensation Act and Regulations.
14.00 MISCELLANEOUS
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14.01 This permit must be available for viewing while cutting or
transporting the forest products described herein.
14.02 Any power conferred or duty imposed on the District Manager under
this Licence may be exercised or fulfilled by any person authorized
to do so by the district Manager.
14.03 The Exhibit and Schedules to this Licence are deemed to be part of
this Licence.
14.04 The laws of British Columbia will govern the interpretation of this
Licence and the performance of the parties' obligations under this
Licence.
14.05 The Licensee must personally conduct logging operations under this
Licence, otherwise the Licensor reserves the right to cancel the
Licence.
14.06 The Licensee shall not erect any camp on the lands described in this
Licence without the written authority of the Forest Officer.
14.07 A minimum of $100 administrative fee may be charged if operations do
not commence during the term of this licence.
14.08 The Licence shall inform the District Timber Administration Resource
Clerk as soon as logging is complete.
14.09 This timber sale licence is subject to any conditions or
recommendations made by the Ministry of Environment. The Licensor
reserves the right to cancel this timber sale licence dependent on
recommendations from the Ministry of Environment.
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Licence Number A 595933
IN WITNESS WHEREOF this Licence has been executed by the District Manager and
the Licensee.
SIGNED on ________________ )
by the District Manager )
on behalf of Her Majesty )
the Queen in Right of the )
Province of )
British Columbia in the )
presence of: )
_____________________________) /s/
) ----------------------------
Vernon Forest District
THE COMMON SEAL of )
the Licensee was affixed )
on _______________________ )
in the presence of: )
) c/s
_____________________________)
)
)
OR
SIGNED on July 21/98 )
by the Licensee, in the )
presence of: )
)
Xxxx Xxxxx ) /s/
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) (Licensee)
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Schedule A for TSL A 59593
SCHEDULE "A"
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SPECIAL CONDITIONS AND REQUIREMENTS*
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All circled conditions apply
1.00 ROAD USE
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1.01 a) Under the authority of Section 54(4) and (5) of the Forest
Practices Code of British Columbia Act the Licensee is exempt
from the requirements to obtain a Road Use Permit and or, a road
Permit (for road use of less than 60 days), for existing Forest
Service, Operational, and Non Status Roads. Public Highways and
Private Roads are not covered, under the terms of this agreement.
b) Notwithstanding (a) above, the Licensee is responsible for the
repair of all damage to the road and right-of-way, as a result of
his use under this License. Repairs or maintenance carried out
by the Licensee shall be carried out to the satisfaction of the
District Manager.
c) The Licensee shall comply with Workers Compensation Board,
Industrial Health and Safety Regulations, and Orders relating to
the use and safety of the road and right-of-way. Any conditions
which do not meet Workers Compensation Board standards, shall be
brought to the attention of the Licensor immediately.
d) Upon termination of this Licence, or completion of use of the
road, the road and right-of-way shall be left in a condition that
is acceptable to the District Manager. Landings shall be restored
to their original condition unless otherwise directed by the
Forest Official.
e) Unless otherwise specified, the dimensions and weight of vehicles
used on the road, shall conform to the Ministry of Transportation
and Highway Standards for Public Highways.
f) Log or equipment hauling must not occur during periods of poor
road conditions, specifically, break-up (March 1st to June 1st),
and periods of very heavy rain. Exceptions may be made by the
Licenser, on a site specific basis.
g) All vehicles operating under this permit will have a road radio
with two-way communication, with the proper logging road
frequency, and will call locations at one kilometre intervals.
Industrial vehicles not so equipped are not authorized to use
Forest Service Roads accessing this permit.
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Schedule A for TSL A 59593
1.02 In the event the Licensee wishes to use _________________________,
he/she shall first obtain a permit governing the conditions of use
from the District manager. Use of this road is otherwise prohibited,
and any unauthorized use by the Licensee or his/her agents or
employees may render this document subject to cancellation.
1.03 In the event the Licensee wishes to use _________________________,
he/she shall first enter into a Road Use Agreement with this road's
principal user, ___________________________________________________.
Use of this road otherwise prohibited, and any unauthorized use by
the Licensee or his/her agents or employees may render this document
subject to cancellation.
1.04 This license does not authorize the licensee to join the right of way
to a public road. A permit must be obtained from the Ministry of
Transportation and Highways before such junction is made.
2.00 MISCELLANEOUS
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2.01 The Forest Officer must be advised, in writing or phone call, of
start-up and completion dates.
2.02 As per Part 2 Section 3 (3)(a)(v) and 3 (3)(b)(iii) of the Timber
Harvesting Practices Regulation the licensee is exempted from marking
out block boundaries.
2.03 The manufacture of shakes is prohibited on the license area.
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Schedule B for TSL A 59593
SCHEDULE "B"
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FELLING, BUCKING AND UTILIZATION SPECIFICATIONS
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1.01 The Licensee must not fell, buck, or utilize timber if
(a) the timber is specified in Part 5.00 of this Schedule as reserved
timber, or
(b) under an operational plan or the Acts, regulations or standards
referred to in paragraph 6.01 of the Licence, the Licensee is
required not to fell or utilize the timber for any reason,
including silviculture, biodiversity or other forest management
reasons.
2.00 UTILIZATION SPECIFICATIONS
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Subject to paragraph 1.01 of this Schedule, the following utilization
specifications apply to timber authorized for harvest under this Licence:
[DIAGRAM]
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Species Minimum Minimum Minimum Minimum Minimum
Log Length Diameter Top Slab Slab
at Xxxxx Diameter Length Thickness
Height
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All except P1 3m 20 10 3m 15cm
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P1 3m 15 10 N/A N/A
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Schedule B for TSL A 59593
3.00 OBLIGATORY UTILIZATION
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The following timber is specified as obligatory utilization:
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Species Description Grade(s)
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All Safety 03 and better
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All All authorized access wood 03 and better
(maximum 10% of total cut
volume).
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4.00 OPTIONAL UTILIZATION
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The following timber is specified as optional utilization:
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Species Description Grade(s)
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All Authorized felled or down wood unless 04,05,06,and Z
located in a riparian reserve zone or
other area reserved by the forest Official.
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5.00 RESERVED TIMBER
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5.01 (a) Wildlife trees that are reserved from cutting by a Forest
Official, and
(b) All timber except that specified below is reserved from
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cutting:
Only sunken timber.
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5.02 Reserved timber that is harvested will be billed at the current
average Small Business billing rate and may result in trespass
charges, forfeiture of deposit, and disqualification from the
salvage program.
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Schedule B for TSL A 59593
6.00 FELLING SPECIFICATIONS
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Subject to paragraph 1.01, standing timber of the species shown must be felled
in accordance with the following specifications:
[DIAGRAM]
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Species Maximum Xxxxx Height Minimum Diameter at Xxxxx Height
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All except P1 30 cm 20 cm
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P1 30 cm 15 cm
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TSL A
HARVESTING GUIDE FOR SMALL SCALE SALVAGE PROGRAM
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xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxxxx Xx. XXX X00000 Licensee: Aquatic Cellulose
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Tel: 000-0000
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Location: Monte Lake Timber Xxxx: 59593
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Road Radio Frequency____ Logging Supervisor Xxxx Xxxxxx
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Contact Telephone No: 000-0000
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REFERRAL(S) sent to: _________________________________ Date:__________________
Referral recommendations to be followed: (or N/A-- No response)
Must follow all Ministry of Environment Recommendations.
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______________________________________________________________________________
______________________________________________________________________________
PLACE OF SCALING: T.B.A.
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METHOD OF SCALE: (circle) PIECE OF SCALE WEIGH SCALE CRUISE BASED
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(Attach copy of scale site designation)
CUTTING METHOD:
[_] Single tree selection of damaged or infested timber.
[_] Small patch clearcut.
[_] Other Under water salvage
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______________________________________________________________________
PERIOD OF OPERATION COMMENCEMENT DATE July 21/98
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COMPLETION DATE October 31/98
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SCHEDULE OF OPERATIONS: All aspects of operations will be kept in phase:
harvesting in one area will be completed before operations move on to another
area.
HARVESTING SEASON: When lake is ice free and as prohibited by MOE.
RIPARIAN MANAGEMENT AND LAKESHORE MANAGEMENT AREAS
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Stream Wetland Riparian Class Reserve Zone Management
or Lake ID (as Width Zone Width
per map)
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Monte Lake
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1
TSL A
Description of operations within a Riparian Management Area(RMA)
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Felling strategy: Fell away from waterbody.
Exceptions/Other measures: Interim decking of de watered logs. All logs must
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be removed upon Sale completion
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Yarding strategy: Yard away from water body.
Exceptions/Other measures:
__________________________________________________
______________________________________________________________________________
Protection of immature or understory protection strategy: Minimize damage to
immature timber and understory vegetation. Exceptions/Other measures: N/A
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Debris management strategies: Slash and debris will not be deposited near a
waterbody or accumulated within a RMA.
Streambank protection strategy: No machinery will be operated within 5m of a
stream bank or lakeshore Exceptions/Other measures: As per MDE conditions, No
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tracking within this 5 meter area
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STREAM CROSSINGS AND INSTREAM OPERATIONS
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Area Proposed Installation Removal Comments
Identification Structure Date Date
(As per map)
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Monte Lake
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Landings
- Number of landings: 1
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- Maximum size of each landing: only use what is existing hectares
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- Landings will be located as shown on the attached map(s).
Excavated and Bladed Trials [_] Permanent [_] Temporary [_] N/A
- Approximate location is shown on map.
- Maximum Depth: ___m Maximum Gradient ____ %
- Maximum Width: ___m
- Maximum Total Length: ____m Minimum Skid Trail spacing _____m or
N/A ___
- Trail location(s) to be approved by a forest official prior to
construction. Yes _____ No _____
- Equipment confined to exiting trials? Yes ____ No ____
- Comments on any of the above: No new trails are authorized
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_______________________________________________________________________________
2
TSL A
Unbladed Skid Trails
- Maximum Width:__m
- Other Specifications:__________________________________________________
_______________________________________________________________________
- Minimum skid trail spacing, if applicable______m
- Equipment confined to existing trails? Yes ___ No_____
- Trail locations(s) to be approved by a forest official prior to
construction? Yes ___ No___
- Comments on any of the above:__________________________________________
Previously Established Skid Trails May be used Yes [X] No_____
- Comments:______________________________________________________________
Fire Prevention and Protection Measures
- Top in xxxx and lop and scatter all limbs? Yes ___ No ___ Comments
_______________________________________________________________________
- Full tree yard to designated landings? Yes ___ No___ Comments:_________
_______________________________________________________________________
- Pile and Burn Yes [X] No ___
- Debris to burn Yes
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- Debris will be piled by machine [x] by hand [X]
- Debris pile location(s): Lot 475
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- Restricted to one debris pile per landing.
- Piles will be tightly piled, free of dirt, placed no
closer than 5m to standing timber or regen., and be
-
surrounded by a fireguard 2m wide.
-
* - Debris piles not to be placed closer than 30m to a water body
or stream
- Timing of burning will be subject to the approval of a Forest
Official and the issuance of a burning permit. Burning to be
completed by: Upon completion of operations
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- Other Measures:______________________________________________
protection of the Residual Stand
Measures to be taken regarding: N/A
- Felling and yarding pattern and sequence_____________________
_____________________________________________________________
- Slashing and/or utilization of leaners_______________________
_____________________________________________________________
3
TSL A
Forest Health N/A
- Removal and disposal of debris threatening forest health: Yes ____ No ____
- Comments (discription of debris and method of disposal): ________________________
- Deadline for removal: __________________________________.
- Trap tree felling? Yes ____ No____
- Comments:________________________________________________________________________
- To be felled by ____________________. To be removed from site by ________________.
HARVESTING METHODS:
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Standard Hectares Average Site Felling Special concerns/seasonal site
Units as in Slope % Sensitivity Method conditions and constraints
SP L-M-H (Hand, etc.)
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Monte Lake under water salvage
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During ice free conditions
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Maximum log length:____m or N/A
Remove limbs before skidding? yes ___ no ___
Comments: Logs were limbed before they sunk N/A
Equipment to be Used
- Felling: Hand __________________________ Mechanical Barge with Robotic Arm
- Skid and Yard: RT line skidder ________ Track-line __________ Light floatation ___________
RT grapple skidder _______ Track-grapple _______ Cable _____ Other _______
- Other Equipment: _______________________________________________________________________________
- Equipment size/power restrictions: _____________________________________________________________
Interruptions or Termination of Harvesting Operations: Seasonal Shutdown or End of Sale
Measures to be followed to stabilize and rehabilitate soils on
- Roads and Rights of Way: ____________________________________________________________________
_____________________________________________________________________________________________
- Landings: must be cleaned up at completion of sale
4
TSL A
- Skid Trails: N/A
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- Disturbed Ground in General: Using existing non productive land only.
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All logging equipment, fixtures, and non-biodegradable debris (metal cans,
plastic lubricant pails, oil filters, etc.) will be removed and all areas will
be left in an orderly and sanitary condition. Litter shall be removed on a daily
basis.
Other measures: (Re: other tenures, improvements, features, or higher level plan
objectives)
Licensee has authorization to de-water timber on Riverside Forest Products
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private property, xxx 000, xxxxxxxx xx Xxxxx Xxxx. See fire prevention for
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conditions.
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Operations carried out under this logging plan are to meet the safety
requirements of the Worker's Compensation Board. It is the responsibility of the
Licensee to familiarize himself and abide by these requirements.
Changes to this Harvesting Guide, require approval from a Forest Official prior
to being carried out on the area of harvest.
SUBMITTED BY (If different from approving officer): Xxxx Xxxxxxx
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DATE:____________________________
SIGNATURE OF LICENSEE: /s/
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DATE:____________________________
APPROVED BY (District Manager or designate) /s/
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DATE: July 21/98
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