Economic and Community Development Agreement

7/28/2019 Economic and Community Development Agreement

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This Agreement is dateday of2010.ECONOMIC AND COMMUNITY DEVELOPMENT AGREEMENT

BETWEENHER MAJESTY THE QUEENIN RIGHT OF BRITISH COLUMBIAas represented by the Minister ofEnergy, Mines and Petroleum Resources andthe Minister of Forest and Range and Minister Responsible for IntegratedLand Management Bureau("British Columbia")

andSTK'EMLUPSEMC OF THE SECWEPEMC NATIONas represented by the Tk'emliaps Indian Bandand the Skeetchestn Indian Band("SSN")

(collectively referred to as the "Parties")

WHEREAS:A. New Gold, Inc. has proposed to develop the New Afton Mine Project

("the Project") at the site of the historic Afton Mine, approximately10 kilometres west of Kamloops;B. The Project site is within the traditional territory of Tk'emlUps andSkeetchestn, which together comprise the Stk'emltipsemc of theSecwepemc Nation;C. The Parties will utilize this Economic and Community DevelopmentAgreement to demonstrate leadership and respect for each others'interests, while developing a successful long-term working relationshipintended to address fundamental SSN concerns, including those

presented in the 1910 Mem orial to Sir W ilfred Laurier;D. The Parties acknowledge that British Columbia and SSN haveundertaken a shared commitment to strengthening relationshipson a government-to-government basis, and on focusing efforts toclose the socio-economic and cultural gaps between Aboriginal and

THIS CONFIDENTIAL DRAFT ECONOMIC AND COMMUNITY DEVELOPMENT AGREEMENT WITH SSN IS SUBJECT TO FIRST NATIONS'AND PROVINCIAL APPROVALS (INCLUDING ANY NECESSARY CABINET, TREASURY BOARD AND EXECUTIVE APPROVALS), AND IS

RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUNI EVELOPMENT AGREEMENT- INITIALED DRAFT AUG. 13, 2010SS NC Pk /-w 1


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non-Aboriginal peoples, which will require a relationship betweenSSN and British Columbia based on enh anced collaboration,effective w orking partnerships and m utual respect, recognition andaccountability;E. The Ministry of Energy, Mines and Petroleum Resources (MEM PR)is interested in facilitating and developing a thriving, com petitive,safe and environmentally responsible mineral resource sector, andfor increasing the contribution to the local and provincial economyfor the benefit of all British Columb ians;F. The Parties entered into a Mining and Minerals Agreement which:provides for a government-to-government p rocess on m iningactivities, includes the establishment of a Mines and MineralsJoint Resources Com mittee, establishes information-sharingprinciples, and sets forth a consultation an d accom modationapproach for mining activity within SSN traditional territory;G. The Parties acknow ledge the importance of SSN and New Gold, Inc.having developed a benefits agreement between them in relation tothe Project and that this Agreement shou ld not limit, or diminishthe value of, that agreement; andH. The Parties have agreed upon a revenue-sharing arrangementrespecting the Project, which is set out in this Agreement.

NOW , THE PARTIES AGREE AS FOLLOWS.SECTION 1 DEFINITIONS"Aboriginal Rights" means asserted or determined aboriginal rights,including aboriginal title, as recognized and affirmed by section 35 (1) ofthe Constitution A ct, 1982;"Agreement" means this Economic and Community DevelopmentAgreement-in-Principle;"Annual Payments" means the paym ents to be made by BritishColumbia to SSN each year pursuant to section 3, and "Annual Payment"means any one such payment;


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOM IC AND COMMUNI-T EVELOPME NT AGREEMENT - INITIALED DRAFT AUG. 13, 2010

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"BC Fiscal Year" means a period beginning on April 1 of a calendar yearand ending on March 31 of the next calendar year;"Councils" means, in respect of Tk'emlUps and Skeetchestn, thecouncils of both bands;"Consultation and Accommodation Process" means the consultationand accommodation process set out in section 6.1.b which is the meansby which Provincial Releasees w ill fulfill any consultation andaccommodation obligations relating to any Governmental Actions thatmay impact SSN's Aboriginal Rights after the date of this Agreement;"Effective Date of this Agreement" means the date upon w hich thisAgreem ent has been ratified and is signed by all of the Parties;"Fiscal year of the Mine" has the same meaning as in the Mineral TaxAct;"Government Actions" means all processes, decisions, authorizations,permits, licences, approvals, Crown land dispositions, agreements, andother actions whatsoever entered into or otherwise taken by a ProvincialReleasee in relation to the Project at any time either before or after thedate of this Agreement;"Member" means any person who from time to time is a member ofTk'emliips or Skeetchestn;"MEMPR" means the Ministry of Energy, Mines and PetroleumResources;"Mine Fiscal Year" means a Fiscal Year of the Mine during which theProponent is an Operator of the Project;"Mining and Minerals Agreement" means the M ining and MineralAgreement entered into by British Columbia and SSN dated April 7,2009;"Mines and Minerals Joint Resources Committee" means thecommittee established under section 5.0 of the Mining and MineralsAgreement between the British Columbia and SSN, dated April 7, 2009;"Mining Activity" means a mining activity as that term is defined in theMines Act, R.S.B.0 1996, c.293 for which a permit would be requiredunder section 10 of the M ines Act;


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COEVELOPMENT AG.gMENT- INITIALED DRAFT AUG. 13, 2010

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"Operator" has the same meaning as in the Mineral Tax Act;"Overpayment Amount" means any payment am ount of that is subjectto the off-set provisions in section 3.1.d;"Payment Account" has the meaning given to that term in section 3.2 ofthis Agreement;"Payment Statement" means the financial statement containing the taxinformation referred to in section 3.1.b that British Columbia will provideto SSN u nder section 3.1.a;"Project" means:

1. the New Afton Mine Project which is the subject of the Mines Actpermit M-229 issued to New Gold Inc. on October 30, 2007 andwhich is at the site of the historic Afton Mine, approximately 10kilometres west of K amloops, and includes its associatedinfrastructure, access roads, power facilities and other physicalfacilities;

2. any changes or modifications to the project and phys ical facilitiesdescribed in clause (1) above that may be made from time to time;3. all matters relating to the exploration, planning, permitting,construction, maintenance, repair and operation of the project andits infrastructure and facilities described in clauses (1) and (2)

above; and4. but does not include, unless the Parties agree otherwise,

a. any expansion of the New Afton Mine project or any of theinfrastructure and facilities of the kind desc ribed in clauses (1)and (2) that would be associated with a m aterial expansion orchange in the mine p roject and that would require a significantamendment to the Mines Act permit M-229 issued to New GoldInc.; orb. any extraordinary, unforeseen environmental em ergencyresulting from the m ine project that may have a potentiallysignificant adverse affect on SSN's Aboriginal Rights.


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND CODEVELOPMENT A GREEMENT- INITIALED DRAFT AUG. 13, 2010

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"Proponent" means the O perator who from time to time is responsiblefor the Project and for paying Mineral Tax Act tax payments in relation tothe Project to British Columbia;"Provincial Releasee" means British Colum bia, including:

1. any minister, public official, employee or agent of BritishColumbia;2. any government corporation; and3. any director, officer, employee, or contractor acting on behalf of oras an agent of British Columbia.

"Skeetchestn" means the band nam ed Skeetchestn Indian Band;"SSN Corporation" means a corporation to be incorporated under thelaws of the Province of British Columbia for the purposes of thisagreement;"Stk'emhipsemc of the Secwepemc Nation" (or "SSN") means theTk'emhIps and Skeetchestn, including their Members; and"Tk'emltips" means the band named Tk'eml -Cips Indian Band, formerlyknown as Kamloops Indian Band.SECTION 2 PURPOSES AND OBJECTIVES2.1 The purposes of this Agreement are to:a. confirm understandings reached between the Parties with respectto how British Columbia will meet its legal obligations to consultwith and to accommodate SSN in relation to the Project, andb. share resource revenue received by British Columbia from theProject with SSN so that it may pursue activities that will enhancethe social, economic and cultural well being of its Mem bers.SECTION 3 PROVINCIAL PAYMENTS3.1 ANNUAL PAYMENTSa.ubject to comp liance by SSN with the provisions of section 6.3,British Columbia will, within 60 days after the end of a BC FiscalYear, provide a Payments Statement to SSN for that BC FiscalYear. The first Payments Statement will be following the first BCTHIS CONFIDENTIAL DRAFT ECONOMIC AND COMMUNITY DEVELOPMENT AGREEMENT WITH SSN IS SUBJECT TO FIRST NATIONS'AND PROVINCIAL APPROVALS (INCLUDING ANY NECESSARY CABINET, TREASURY BOARD AND EXECUTIVE APPROVALS), AND ISRECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOM IC AND COMMU NITY DEVELOPMENT AGREEMEN T- INITIALED DRAFT AUG. 13, 2010BC/NI / 67(-

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Fiscal Year in which B ritish Columbia receives a tax payment fromthe Proponent under the Mineral Tax Act.b. The Paym ents Statement for a BC Fiscal Year will contain thefollowing information in relation to the Proponent's tax liability,

payments and refunds under the Mineral Tax Act relating to theProject:the total amount of tax, penalty and interest assessed orreassessed during the BC Fiscal Year;the total amount of tax, penalty and interest paid by theProponent during the BC Fiscal Year in relation to any MineFiscal Year other than a Mine Fiscal Year that ended before theEffective Date of this Agreement; andthe total amount of tax and pen alty refunded to the Propon entand interest paid to the Proponent during the BC F iscal Yearin relation to any Mine Fiscal Year other than a Mine FiscalYear that ended before the Effective Date of this Agreement.

c. If the amount in section 3.1(b)(ii) exceeds the amount in clause(b)(iii), British Colum bia will pay to SSN 37.5 % of the differencebetween those two am ounts. British Columbia will make thispayment within 90 days after British Colum bia has sent to SSNthe Paymen ts Statement under clause (a).d.f the amount in section 3.1(b)(ii) is less than the am ount in section3.1(b)(iii), British Columbia will off-set 37.5 % of the differencebetween those two amoun ts (the "Overpayment Amount") fromany subsequent paym ents British Columbia is required to make toSSN under this Agreement in relation to any subsequent BC FiscalYears. In the event that the Proponent is no longer responsible formaking Mineral Tax Act payments in relation to the Project, suchthat there will be no subsequent payments owing to SSN underthis Agreement, British Colum bia will send to SSN a notice of anyOverpaymen t Amount that remains outstanding, and British

Columbia m ay off-set that amount from any future amou nts thatmay be payable to SSN, Skeetchestn or Tk'eml -Cips under anysubsequent agreement governing the sharing of revenue in relationto the Project.


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUN DEVELOPMENT AGREEMENT- INITIALED DRAFT AUG. 13, 2010S S NC,42j 65c-

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e. For the purposes of determining any Overpayment Amounts undersection 3.1(d), British Columbia will not include any credit orrefund amoun ts that may be refunded to the Proponent in relationto any Project reclamation credits that may occur at the end of theProject after the Proponent is no longer liable to pay any tax u nderthe Mineral Tax Act.

f. SSN understands that British Columbia may audit the Proponentfrom time to time to review the accuracy of Mineral Tax Actpayments over a specific period of time, and also understands thatthe Proponent may appeal any assessment or reassessment of tax,pena lty or interest to the Minister responsible for administering theMineral Tax Act and then to the Court. SSN understands that anysuch audits or appeals may influence the amount of the paymen tsBritish Columbia will provide to SSN in subsequent years, and mayalso influence the am ounts that m ay be set-off under section3 . 1 ( d ) .

g. If British Columbia conducts an audit of the Proponent, BritishColumbia w ill report in writing to SSN the results of the audit andspecifically whether the Proponent had made overpayments,underpayments or correct payments under the Mineral Tax Act toBritish Columbia for the period of time subject to the audit. In theevent of any appeal by the Proponent of any assessment orreassessment, British Columbia will report in writing to SSN of theresults of the appeal.h. If this Agreem ent is terminated prior to the last day of a MineFiscal Year:

no Annual Payment will be payable to SSN under thisAgreement in relation to that portion of the Mine Fiscal Yearafter this Agreement is terminated or any subsequent M ineFiscal Year, andthe obligations of British Columbia set out in sections 3.1(a)through (g) will continue , but only to the extent that tax,penalty or interest is assessed or reassessed, or amounts arereceived from, or refunded or paid to, the Proponent by BritishColumbia in relation to Mine Fiscal Years ending between theEffective Date of this Agreement and the date this Agreementis terminated.


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC A ND COM MUNMVELOPMENT A GREEMENT-INITIALED DRAFT AUG. 13, 2010SS N _____C PA /


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British Colum bia will notify SSN of any significant changes m adeto the Mineral Tax Act tax regime and w ill be open to discussionswith SSN respecting whether the nature of this Agreement shouldbe reviewed.j.SN acknow ledges that Mineral Tax Act revenues fluctuate and anyrevenue-sharing paym ents from British Columb ia will vary over time.3.2 DELIVERY OF PAYMENTS AND DIRECTIONa. SSN acknowledges and covenants that it will establish the S SNCorporation and will throughout the term of this Agreement m aintaina bank account in the nam e of SSN Corporation at a Canadianfinancial institution for the purpose of receiving monies payable byBritish Colum bia pursuant to this Agreement (the "PaymentAccount"), which bank account will be used solely for the purpose ofreceiving monies payable under this Agreement and imp lementingthe objectives described in section 6.2 (d).b . SSN will provide to Br it ish Columbia suffic ient address and accountinformation respecting the Paym ent Accoun t to enable B ritishColumbia to make paym ents to the Payment Account.c. SSN h ereby directs that all payments wh ich British Columbia isobliged to make to SSN pursuant to this Agreement are to beremitted to the Payment Account.d. British Columbia will not be obligated to make any paym ents under

this Agreement until the provisions of this section 3.2 have beencomplied with to the reasonable satisfaction of British Columbia.3.3 CONFIDENTIAL INFORMATIONa. SSN will keep confidential information that British Columbiaexplicitly denotes as "Confidential", such as the PaymentStatements, that relates to tax paym ent information un der the

Mineral Tax Act and will not disclose such confidential informationto any other person.b. Notwithstanding any other p rovision of this Agreement, thisAgreement and B ritish Columbia's obligations under thisAgreement are subject to British Colum bia obtaining a release andconsent from the Proponent for sharing potentially confidentialinformation obtained un der the Mineral Tax Act with SSN for the


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUNI DVELOPMENT AGREEM ENT- INITIALED DRAFT AUG. 13, 2010SSNC&f/Gre-

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purposes of providing Payment Statements to SSN and makingAnnual Payments to SSN.3.4 APPROPRIATIONNotwithstanding any other provision of this Agreement, the Annu alPayments to be provided by British Colum bia to SSN are subject to:

a. there being sufficient monies available in an appropriation, asdefined in the Financial Administration Act, to enable BritishColumbia in any Fiscal Year or part thereof when such payment isrequired, to make such payment; andb. Treasury Board, as defined in the Financial A dministration Act, nothaving controlled or limited expenditure un der any appropriationnecessary in order to make such paym ent.

SECTION 4 RELATIONSHIP4.1 No partnership, joint venture, agency, fiduciary or employmentrelationship will be deemed to be created by this Agreement or byany actions of the Parties under this Agreement.SECTION 5 REPRESENTATIONS AND WARRANTIES5.1 SSN REPRESENTATIONS AND WARRANTIESSkeetchestn and Tk'emlups each represent and warrant to BritishColumbia, on which B ritish Columb ia will rely in entering into thisAgreement, the following:

a. each of them h as the authority, and SSN, as represented by theChief of Tk'emlUps and the Chief of Skeetchestn, has the authorityto enter into this Agreement and to m ake the covenants andrepresentations in the Agreement, all of which have been dulyauthorized and executed;b. each of them h as obtained or had the opportunity to obtain theadvice of their own financial, legal, tax and other professionaladvisors with respect to this Agreement;


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC A ND COM MUNI DEVELOPMENT AGREEMENT- INITIALED DRAFT AUG. 13, 2010

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c. SSN has entered into this Agreement for, and on behalf of,Tk'eml -Cips and Skeetchestn, as represented by their duly electedCouncils, with full authority to represent their Members;d. Appendix 1 to this Agreement consists of a true copy of a

resolution m ade by Skeetchestn Council approving this Agreementand giving authority to the Chief to enter into this Agreement onbehalf of Skeetchestn and M embers and such resolution has notbeen varied, amended, repealed or replaced;e. Appendix 2 to this Agreement consists of a true copy of aresolution made by Tk'emlUps Council approving this Agreementand giving authority to the Chief to enter into this Agreement onbehalf of Tk'emliips and Mem bers and such resolution has notbeen varied, amended, repealed or replaced; andf. all of the shares of SSN Corporation are legally and beneficiallyheld by Skeetchestn and T'kemlups.

5.2 PROVINCIAL REPRESENTATIONS AND WARRANTIESBritish Colum bia represents and warrants to SSN that it has the legalauthority to enter into this Agreem ent and carry ou t its obligations inaccordance w ith it.

SECTION 6 ACKNOWLEDGEMENTS AND COVENANTS6.1 ENGAGEMENT ON THE PROJECTa.ith respect to any proposed Government Actions relating to theProject after this Agreement, which m ay relate to new or existingprovincial dispositions, licences, permits or authorizations, thatmay impact SSN 's Aboriginal Rights,i. MEMPR British Columbia will engage SSN through Mines andMinerals Joint Resources Comm ittee and w ill consult withSSN, and SSN will participate as appropriate, in accordance

with the Consultation and Accom modation Process; andother Provincial Releasees will consult with SSN, and SSN willparticipate as appropriate, in accordance with theConsultation and Accomm odation Process,


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUNI DEVELOPMENT AG' MENT- INITIALED DRAFT AUG. 13, 2010

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for the purposes of identifying potential mitigation oraccomm odation measures that may be app ropriate for theGovernmen t Action but such measures w ill not include anyadditional financial or economic compon ent.b.he Consu ltation and Accom modation Process is as follows:Provincial Releasees will provide to SSN advance writtennotification of a proposed Government Action that mayadversely affect any of SSN's Aboriginal Rights together withrelevant information about the proposed activity;Provincial Releasees will provide a reasonable period of timefor SSN to prepare its views on the proposed GovernmentAction;

Provincial Releasees will provide a reasonable opportunity forSSN to present its views as to potential adverse impacts on theexercise of any Aboriginal Rights, together with anysuggestions as to how any such impact may be avoided,mitigated, m inimized or otherwise accommodated (other thanby compensation), and Provincial Releasees will provide areasonable opportunity to discuss the views and attempt toresolve any concerns;iv . Provincial Releasees w ill undertake a full and fairconsideration of any views presented by SS N;v. in the absence of a presentation of views by SSN within areasonable period of time, Provincial Releasees will undertakea full and fair consideration of all relevant informationavailable respecting how to avoid, mitigate, minimize orotherwise accommodate (other than by compensation) anypotential adverse impacts on the exercise of any of itsAboriginal Rights, given that Provincial Releasees will havetaken reasonable steps to inform them selves of any suchadverse impacts on such Aboriginal Rights; and,

vi. Provincial Releasees will provide, in writing where appropriate,to SSN notification of the decision taken and how the viewspresented by SSN w ere taken into account.c.f there is a conflict or inconsistency w ith section 6.1 of thisAgreement and section 7 of the Mines and Minerals Agreement,section 6.1 prevails to the extent of the conflict or inconsistency.THIS CONFIDENTIAL DRAFT ECONOMIC AND COMMUNITY DEVELOPMENT AGREEMENT WITH SSN IS SUBJECT TO FIRST NATIONS'AND PROVINCIAL APPROVALS (INCLUDING ANY NECESSARY CABINET, TREASURY BOARD AND EXECUTIVE APPROVALS), AND ISRECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND CODEVELOPMENT AGREEMENT- INITIALED DRAFT AUG. 13, 2010BC63r-SN

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6.2 ACKNOWLEDGEMENTS AND COVENANTSSSN acknowledges and covenants that:

a. subject to section 6.1 above, Provincial Releasees will be deemed tohave fulfilled any legal obligations of consu ltation andaccomm odation to SSN and their Members in relation to theProject and associated Governm ent Actions;b. this Agreement resolves any past or future claims associated w iththe Project in relation to Provincial Releasees w ith respect to theissues of capacity funding, third-party studies or payments, orother compensation or disbursements of any k ind, including anyclaims related to the consu ltation activities described in section 6.1above;c. this Agreement resolves any past o r future claims associated w iththe Project in relation to Provincial Releasees w ith respect to theissues of revenue generation, including revenue-sharing andeconomic benefits;d. the Annual Payments provided under this Agreement w ill be usedto pursue activities that will help it to enhance and improve thesocial, cultural and econom ic well-being of its comm unities,including governance capacity, and in particular, all expendituresfrom the Paym ent Account w ill be consistent with the Statement ofCommunity Priorities referred to in section 6.3(a);e. SSN will use all, or a portion of, Annual Payments received in anygiven year for the ob jectives set out in section 6.2(d) in that yea r,or will hold such payments for imp lementing the objectives set outin section 6.2(d) in future years, as they see fit;f . monies received under this Agreement will be used for theobjectives set out in section 6.2(d) even if this agreement isterminated; andg. this Agreement resolves the need to further identify fundingresources, as contemplated in section 2.1(h) of the Mining andMinerals Agreement, to bridge the involvement of the SSN in thefive phases of consu ltation and engagem ent in the m ineralresource sector.


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COM MUNDyVELOPMENT AGREEM ENT- INITIALED DRAFT AUG. 13, 2010S S NC ,E /

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6.3 COMMUNITY PRIORITIES, ANNUAL REPORTS AND RECORDSSSN covenants and agrees as follows:

a. Within one year of the Effective Date of this Agreement, SSNwill prepare a Statement of Community Priorities thatindentifies community priorities and outlines goals and specificoutcomes that SSN intends to fund to help achieve theobjectives set out in section 6.2(d) over the next 3 years.b. Within 90 days of receipt of each Annual Payment under thisagreement, SSN will update the Statement of CommunityPriorities identified in section 6.3(a) taking into accou nt theamount of that Annual Payment; the updates will include asection on h ow the funds have helped the SSN achieve theircomm unity priorities.c. Within 90 days of receipt of each Annual Payment under thisAgreement, SSN will provide to British Columbia a reportprepared by the treasurer of SSN Corporation identifying allexpenditures made from the Payment Account since the date ofthe last such report (or, in the case of the first such report,since the Effective Date of this Agreement) and confirming that,aside from reasonable administrative expenses, all suchexpenditures were made for the purpose of accomplishing the

objectives referred to in section 6.2(d).d. British Colum bia will have the right from time to time, at itssole discretion, to require an audit of expenditures made fromthe Payment Account to ensure that all such expenditures weremade for appropriate purposes under this agreement, suchaudit to be at the expense of SSN.e. The documents referred to in sections 6.3(a), 6.3(b) and 6.3(c)will be published by SSN on the Internet or in another mannerthat can reasonably be expected to bring the information to theattention of its comm unities and the public.f. Notwithstanding the termination or expiry of this Agreement,SSN will continue to comply w ith section 6.3 u ntil twelvemonths after SSN receives the last Annual Payment from BritishColumbia.


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AN D COMMU NITX DEVELOPMENT AGREEMEN T- INITIALED DRAFT AUG. 13, 2010

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6.4 RELEASESSN hereby releases and forever discharges the Provincial Releasees fromall actions, causes of actions, claims, proceedings, debts, duties,demands, interest, fines, costs, expenses and compensation ofwhatsoever amou nt, nature and k ind relating to consultation,accomm odation and infringement of any Aboriginal Rights of SSN,arising from any Government Actions in relation to the Project.

6.5 NO PROCEEDINGSSSN covenants and agrees that:

a. without restricting the generality of section 6.4, they will not bringor continue any action or other proceeding, in their own nam e orby representative action, against Provincial Releasees in regard tothe subject matter of the release in section 6.4; and

b. neither it nor Skeetchestn or T'Kemlups will challenge or impede,directly or indirectly, the right of Provincial Releasees or theProponent, or any of their respective employees, contractors,agents, represen tatives or invitees to gain access to the Project andto carry out any activities associated w ith the development andoperations of the Project.6.6 SSN CORPORTATIONSSN covenants and agrees that Skeetchestn and T'Kemlups w ill not,during the term of this Agreement as defined in section 8, dispose of anylegal or beneficial interest in the shares of SSN Corporation. This sectionis not intended to limit the ability of SSN to ass ign this Agreem ent or anyright of SSN under this Agreem ent as set forth in section 7 of thisAgreement.

6.7 ASSISTANCESSN w ill promptly, upon request by British Colum bia:


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUNVELOPMENT AG REEMENT- INITIALED DRAFT AUG. 13, 2010

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a. cooperate with British Colum bia and provide their support toBritish Columbia in contesting or otherwise seeking to resolve anyaction that m ight be taken by any Mem ber that is inconsistentwith the release in section 6.4, or inconsistent w ith any of theother obligations of SSN in this Agreement; andb. cooperate with British Colum bia and provide their support toBritish Columbia in contesting or otherwise seeking to resolve anyaction or p roceeding against British Columbia by any otheraboriginal group or proceeding in abeyance, seeking a legal claimfor economic benefits or compensation in relation to the Project.

6.8 CONTINUING OBLIGATIONSThe Parties acknowledge and agree that they intend this Agreement tobenefit and bind British Colum bia and SS N, including present and futureMem bers and Chiefs and Councils of Skeetchestn and Tk'emhaps, on anongoing basis and accordingly the acknow ledgements, releases andcovenants given by SSN in this section 6 are intended to remain fullybinding and enforceable despite any matter whatsoever including anydetermination by a court or a tribunal of competent jurisdiction, or anyother recognition, of any Aboriginal Rights held by SSN.

6.9 CONDITION SUBSEQUENTIf British Columbia fails to make a paym ent to SSN as contemplated bysection 3, other than a failure to pay as a result of a dispute concerningthe proper amount of paym ent, and such failure is not remedied w ithinone hun dred and eighty (180) days after the date on which SSN giveBritish Columbia written notice of the failure to pay, SSN may elect toterminate this agreement. If there is a dispute as to the proper amountof payment then either Party may give the other notice of the same andupon the giving of such no tice the Parties will diligently seek to resolvethat dispute. Until any such dispute is finally resolved by agreement orthe final decision of a court or arbitrator, and the expiration of anyapplicable appeal periods, British Columbia will be deemed to be incompliance with its obligation to make payments for the purpose of thissection 6.9.

SECTION 7 ASSIGNMENT7.1 SSN w ill not assign, either directly or indirectly, this Agreem ent orany right of SSN under this Agreement without the prior written consent


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COM MUNIT,I\DEVIELOPMENT AG REEMENT- INITIALED DRAFT AUG . 13, 2010

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of British Columbia. British Columbia will not unreasonably withholdsuch consent, and a condition of such consent m ay be that SSN m ustobtain written consent from the Proponent, to be provided to BritishColumbia, that the Proponent consents to the potential for anyconfidential information obtained under the Mineral Tax Act to beprovided to SSN's assigns.SECTION 8 TERM8.1 The term of this Agreement will commence on the Effective Date ofthis Agreement and will continue for as long as tax, interest andpenalties payable by the Proponent are sub ject to reassessmentunder applicable legislation, unless this Agreement:

a. terminates or is extended by m utual agreement of theParties; or

b. terminates under section 6.8 or section 9 (Termination) ofthis Agreement.

SECTION 9 TERMINATION9.1 Either Party may terminate this Agreement on the grounds set outin sections 9.2 or 9.3 by giving the other Pa rty thirty (30) daysadvance written notice of the intent to terminate the Agreement

and the reasons for terminating the Agreem ent, except that uponthe occurrence of one or more of the even ts referred to in section9.3(e) termination will be effective immediately upon the giving ofwritten notice.9.2 SSN will have the right to terminate this Agreement:

a. in accordance with section 6.9; orb. British Columbia is not in compliance with its obligationsunder this Agreement.

9.3 British Columbia will have the right to terminate this Agreement if:a.SN, Skeetchestn, or Tk'emhaps are not in compliance withtheir obligations under this Agreement, including but notlimited to those set out in section 6.3;THIS CONFIDENTIAL DRAFT ECONOMIC AND COMMUNITY DEVELOPMENT AGREEMENT WITH SSN IS SUBJECT TO FIRST NATIONS'AND PROVINCIAL APPROVALS (INCLUDING ANY NECESSARY CABINET, TREASURY BOARD AND EXECUTIVE APPROVALS), AND ISRECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUNII.YDEVELOPMENT AGREEMENT- INITIALED DRAFT AUG. 13, 2010SSNC PA /

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b. SSN, Skeetchestn, or Tk'emhaps are not in comp liance withtheir obligations und er the Mining and Minerals Agreement;c. any representation or warranty made by SSN, Skeetchestn,or Tk'eml -Cips in this Agreement is untrue or incorrect; andd. SSN, Skeetchestn, or Tk'emhAps com mence (in their ownname or in the name of their Chiefs acting on behalf of SSN,Skeetchestn, or Tk'eml -Cips or their Members) any proceedingagainst British Columbia or activate a proceeding inabeyance, in relation to the Project; ande. SSN Corpo ration

(i) commences proceedings to be adjudged a voluntarybankrupt or has consented to the filing of abankruptcy p roceeding against it;

(ii) is declared bankrupt or insolvent;(iii) has appointed for it a receiver, receiver-manager,trustee, liquidator or assignee in bankruptcy (or SSNconsents to the appointment of same); or(iv) institutes, or there is instituted against it, any formalor informal proceeding for its dissolution orliquidation, settlement of claims against it, or winding-

up of its affairs.9.4 The termination of this Agreement will not cease the obligations of

the Parties in the Mining and Minerals Agreement. For greatercertainty, the termination of this Agreement would result in theconsultation and accomm odation approach of the Mining andMinerals Agreement potentially being applicable again to potentialprovincial decisions relating to the Project that would be otherwiseincluded as Governm ent Actions and subject to the Consultationand Accommodation Process under this Agreement.9.5 SSN covenants and agrees that, upon termination of SSNCorporation, it will cause all monies in the Payment Accoun t to bedistributed to Skeetchestn and Tk 'emhaps on such equitable basisas they may agree.


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND CO IEVELOPMEN T AGREEMENT- INITIALED DRAF T AUG. 13, 2010Bc_pgi erC

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9.6 The Parties' rights and obligations, which by their nature extendbeyond the expiration or termination of the Agreement, will surviveany expiration or termination of this Agreement.

SECTION 10 AMENDMENT OF AGREEMENT10.1 Any am endment of this Agreement agreed to by the Parties mustbe in w riting and signed b y the Parties.SECTION 11 DISPUTE RESOLUTION11.1 A "dispute" is defined, for the purposes of this section, as anydisagreement:

a . about which written notice o f a dispute is given inaccordance with sections 11.3 and 12; andb. which relates to the interpretation of this Agreement.

11.2 No part of this section applies in respect of a Government Actionwh ich potentially adversely affects or infringes an Aboriginal Right.11.3 Any Party may give written notice of a dispute to the other Party,which notice mu st include a summ ary of the particulars of thedispute.11.4 Within ten (10) working days, all Parties w ill meet and will attempt

to resolve the dispute through unassisted collaborative negotiation.If the meeting fails to resolve the dispute, any Party may refer thedispute to mediation by delivering a notice to comm ence m ediationto the other Party, and the Parties may participate in a mediationprocess as set out below:a. if all Parties fail to agree on a mediator within ten (10)working days after notice to commence mediation isdelivered under the ab ove paragraph, on written request of aParty that is copied to the other Parties, the appointment willbe made by the B ritish Columbia M ediator Roster Society

using the Society's mediation rules;b. at any time prior to the conclusion of the med iation, a Partymay give the mediator and the other Parties a w ritten notice,with or w ithout reasons, requiring the mediator to w ithdrawfrom the mediation on the grounds that the Party has


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUNIT7ELOPMENT AGREEMENT- INITIALED DRAFT AUG. 13, 2010S S Nsc--

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justifiable doubts as to the mediator's independence orimpartiality;c. a mediator's appointment terminates if the mediator isrequired to withdraw under section 11.4(b), the mediator

withdraws from office for any reason, or all Parties agree to atermination of the m ediation or this Agreement;d. if a mediator's appointment terminates under section 11.4(c)and all Parties want to continue a mediated process, areplacement mediator will be jointly appointed by the Partieswithin ten (10) working days of termination of the mediator's

appointment. If the Parties cannot agree, on the writtenrequest of a Party that is copied to the other Parties, theappointment w ill be made by the B ritish Columbia MediatorRoster Society using the Society's mediation rules;e. each Party will submit to the mediator within five (5) workingdays a sum mary of the facts and its views on the issue indispute;f. the first mediation session must take place no later than ten(10) working days following the appointment of the m ediator;g.ediation sessions m ust not extend beyond fifteen (15)working days after the first mediation session and the

following will apply:i. the mediation process and all its related proceedings willbe and will remain confidential;

the mediator will not issue a report or make anyrecommendations unless requested to do so in writingby all Parties;a Party may withdraw from mediation at any time byproviding written notice of its intent to the mediator; and

iv. each Party will assume its own expenses related to themediation, and one-half of the expenses and fees of themediator will be paid by SSN and one-half by BritishColumbia;THIS CONFIDENTIAL DRAFT ECONOMIC AND COMMUNITY DEVELOPMENT AGREEMENT WITH SSN IS SUBJECT TO FIRST NATIONS'

AND PROVINCIAL APPROVALS (INCLUDING ANY NECESSARY CABINET, TREASURY BOARD AND EXECUTIVE APPROVALS), AND ISRECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.

DRAFT ECONOMIC AND CO IEVELOPMENT AG REEMENT - INITIALED DRAFT AUG . 13, 2010B C /2 2 - ' EXc1 9

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h. if a meeting or mediation has not resolved the dispute, theParties may jointly agree to refer the dispute to an arbitratorpursuant to the Com mercial Arbitration Act;

i. if the Parties agree to arbitration, then the following w illapply:the arbitrator will be chosen jointly by the Parties, andfailing agreement, the appointment will be made by aneutral appointing authority on the written request of aParty that is copied to the other Parties;the arbitration process and a ll its related proceedingswill be and w ill rema in confidential;the decision of the arbitrator will be binding on theParties for the term of this Agreement; and

iv. each Party participating in the arbitration will bear itsown costs of participation; British Columbia will bearone-half of the expenses and fees of the arbitrator, andSSN will bear the other one-half of the expenses andfees.11.5 The Parties may also choose other appropriate approaches to assistin reaching resolution of the dispute.SECTION 12 NOTICE & DELIVERY12.1 Where in this Agreement an y notice or other communication isrequired to be given by an y of the Parties, it will be made in

writing. It will be effectively given:a. by person al delivery to the address of the Party set outbelow, on the date of delivery;b. by pre-pa id registered mail to the address of the Partymentioned in this Agreem ent, on the date the registered mailis delivered; orc.y facsimile, to the facsimile number of the Party set out inthis Agreement, on the date the facsimile is received.THIS CONFIDENTIAL DRAFT ECONOMIC AND COMMUNITY DEVELOPMENT AGREEMENT WITH SSN IS SUBJECT TO FIRST NATIONS'AND PROVINCIAL APPROVALS (INCLUDING ANY NECESSARY CABINET, TREASURY BOARD AND EXECUTIVE APPROVALS), AND ISRECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOM IC AND COMMUNI DEVEL OPMENT AGREEM ENT- INITIALED DRAFT AUG . 13, 2010S S NC

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12.2 The address and facsimile num bers of the Parties are:a. SSN:

Chief, Tk'emltips Indian B andChief, Skeetchestn Indian Bandc/o Stk'emhIpsemc of the Secwepemc NationP.O. Box 1881000 Trans-Canada HighwaySavona, BC VO K 2J0Fax: (250) 373-0025

b. British Columbia:Executive Director, Division of Marketing, Aboriginal andCommunity RelationsMinistry of Energy, Mines and Petroleum ResourcesPO Box 9315 Stn Prov GovtVictoria, British Colum bia V8W 9N1Fax: (250) 952-0111

12.3 Any Party may at any time give notice to the other Party of anychange of address or facsimile number in accordance with section12.1.

SECTION 13 GENERAL PROVISIONS13.1 Nothing in this Agreement prohibits SSN from participating in

government programs for which it may be eligible.13.2 This Agreement does not constitute a treaty or land claimagreement w ithin the m eaning of sections 25 and 35 of the

Constitution Act, 1982.13.3 Except as expressly provided herein, this Agreement does notcreate, expand, amend, define, affirm, recognize, limit, deny,abrogate, extinguish, replace or derogate from any S SN aboriginalrights or title which are recognized and affirmed by section 35(1) of

the Constitution Act, 1982.13.4 This agreement shall not be interpreted as addressingcompensation for alleged past or future infringements of AboriginalRights that are not related to the Project.


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUNITY.,DEVELOPMENT AGREEMENT- INITIALED DRAFT AUG. 13, 2010

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13.5 This Agreement does not change or affect the position either Partyhas, or may have, regarding its jurisdiction, responsibilities anddecision-making authority, and it should not be interpreted in amanner that would affect or unlawfully interfere with anylegislative authority of British Columbia or any lawful authority ofSSN.

13.6 This Agreement does not limit the position either Party may take inany legal or administrative proceedings or in any discussions ornegotiations b etween the Parties.13.7 Nothing in this Agreement is to be construed as an acceptance ofor admission by a Party of the position of the other Party or as anadm ission of fact or liability.13.8 This Agreement does not constitute any admission of any claimthat the Project, including any Governmen t Action associated withthe Project, has resu lted or will result in any un justifiedinfringement of any Aboriginal Rights.13.9 This Agreement does not constitute any admission of an obligationto provide financial or economic benefits, as provided in thisAgreement, as part of the British Columbia's obligation to consultand accomm odate.13.10This Agreemen t shall be governed by the applicable laws of Can ada

and British Columbia.13.11There will be no presumption that any ambiguity in any of theterms of this Agreement should be interpreted in favour of eitherParty.13.12This Agreement and any am endment to it constitute the entireAgreement between the Parties with respect to the subject m atterof this Agreement, unless otherwise agreed in w riting by theParties.13. 131 f any part of this Agreement is void or unenforceable at law, itshall be severed from this Agreement an d the rest of the Agreementshall remain in effect and fully enforceable.13. 141 f any part of this Agreement is void or unenforceable at law, theParties agree to negotiate and attempt to reach agreement, to the


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COMMUNIWELOPMENT AGRENVMNT- INITIALED DRAFT AUG. 13, 2010SSNC gg / eTC--

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extent reasonably possible and as their respective interests mayrequire, on a replacement for the severed part with a view toachieving the intent of the Parties as expressed in this Agreement.The Parties may agree to refer the matter to the dispute resolutionprocess set out in section 11 .13.15A11 headings in this Agreement are for convenience only and do notform a p art of this Agreement and are not intended to interpret,define, limit, enlarge, modify or explain the scope, extent or intentof this Agreement or any of its provisions.13.161n this Agreement, words in the singular include the plural, andwords in the plural include the singular unless the context or anyspecific definition otherw ise requires.13.17The use of the word "including" is to be read as not limiting thegenerality of the preceding term or phrase.13.181n this Agreement, any reference made to a statute includes allregulations made under that statute and any amendments orreplacements.13.19 No term, condition, covenant or other provision of this Agreementwill be considered to have been waived by the Parties unless suchwaiver is expressed in writing by the Parties.13.20All references in this Agreement to a designated "section", "clause"or other subdivision or to an Appendix are to the d esignatedsection, clause or other subdivision of, or Appendix to, thisAgreement.13.21Any reference to a corporate entity includes and is also a referenceto any corporate entity that was a predecessor to, or that is asuccessor to, such entity.13.22The following appendices are attached to and form part of thisAgreement:

Appendix 1keetchestn Band C ouncil Resolution; andAppendix 2k'eml -Cips Band Council Resolution.13.23This Agreement may be executed in counterparts and by facsimileby the Parties.THIS CONFIDENTIAL DRAFT ECONOMIC AND COMMUNITY DEVELOPMENT AGREEMENT WITH SSN IS SUBJECT TO FIRST NATIONS'AND PROVINCIAL APPROVALS (INCLUDING ANY NECESSARY CABINET, TREASURY BOARD AND EXECUTIVE APPROVALS), AND ISRECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND CO IEVELOPM ENT AGREEMEN T- INITIALED DRA FT AUG. 13, 2010BC W / 65-_23

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SIGNED in the presence of:ER MAJESTY THE QUEEN IN RIGHTOF BRITISH COLUMB IA OF BRITISHCOLU MBIA, as represented by theMinister of Energy Mines andPetroleum Resources

Witnessinister Bill Benn ettSIGNED in the presence of: HER MAJESTY THE QUEEN IN RIGHTOF BRITISH COLUM BIA OF BRITISHCOLUMB IA, as represented by theMinister of Forest and Range andMinister Responsible for IntegratedLand Management Bureau

Witnessinister Pat BellSIGNED in the presence of: STK'EMLOPSEMC OF THESECWEPEMC NATIONas represented by Tk'emlaps IndianBand and the Skeetchestn IndianBand

Witnesshief Rick Deneault, SkeetchestnIndian BandWitness hief Shane G ottfriedson, Tk'emlUpsIndian Band


RECOMMENDED BY THE PARTIES' RESPECTIVE NEGOTIATORS FOR SUBSEQUENT APPROVAL AND SIGNING.DRAFT ECONOMIC AND COME LOPMEN T AGREEM ENT-INITIALED DRAFT AU G. 13, 2010

Economic and Community Development Agreement

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