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                                                                    EXHIBIT 10.8


                         PROVINCE OF BRITISH COLUMBIA

                              FOREST LICENCE

                                                                          A18969

THIS LICENCE, dated December 1, 1993


BETWEEN:

         THE REGIONAL MANAGER, on behalf of
         HER MAJESTY THE QUEEN IN RIGHT OF
         THE PROVINCE OF BRITISH COLUMBIA
         518 Lake Street
         Nelson, British Columbia
         V1L 4C6

         (the "Licensor")


AND:

         Pope & Talbot Ltd.
         Box 39
         Grand Forks, British Columbia
         V0H 1H0

         (the "Licensee")


         WHEREAS under section 13 of the Forest Act, this Licence replaces
Forest Licence No. A18969 dated December 1, 1988, the parties agree as follows:
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1.00     GRANT OF RIGHTS AND TERM

         1.01     Subject to this Licence and the Forest Act, the Licensee has
                  the right to harvest an allowable annual cut of 434 549 m3 of
                  Crown timber each year during the term of this Licence from
                  areas of Crown land, within the Boundary Timber Supply Area,
                  which are specified in cutting permits and road permits.

         1.02     The term of this Licence is fifteen (15) years, beginning
                  December 1, 1993.

2.00     REVISIONS TO ALLOWABLE ANNUAL CUT

         2.01     The allowable annual cut is deemed to be increased or reduced,
                  as the case may be, according to increases and reductions made
                  to it under the Forest Act.

3.00     MANAGEMENT PLANS

         3.01     A management plan or management and working plan approved
                  under the forest licence replaced by this Licence and still in
                  effect on the date immediately preceding the date on which
                  that forest licence expires is deemed to be the management
                  plan in effect under this Licence 
                  (a)      for the 12-month period beginning on the date
                           specified in paragraph 1.02, or
                  (b)      until December 31, 1994,

                  whichever is later.

         3.02     If there is no approved management plan or management and
                  working plan in effect under the forest licence replaced by
                  this Licence on the date immediately preceding the date on
                  which that forest licence expires, then the Licensee, not
                  later than six (6) months after the date specified in
                  paragraph 1.02, will submit for the Licensor's approval a
                  proposed management plan for the planning area.

         3.03     The Licensee, not less than six (6) months prior to the
                  expiration of the management plan then in effect, will submit
                  for the Licensor's approval a proposed management plan to
                  replace the management plan then in effect.

         3.04     The Licensor, in a notice given to the Licensee, may require
                  that a management plan be amended if

                  (a)      timber in the Timber Supply Area is damaged by fire,
                           flood, wind, insects, disease or other causes,

                  (b)      the Licensor determines that operations conducted in
                           accordance with the management plan are causing or
                           could cause serious damage to the natural
                           environment, including soils, fisheries, wildlife,
                           water, range, and recreation resources,
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                  (c)      a land and resource management plan is approved,
                           amended or replaced,
                  (d)      a local resource use plan is approved, amended or
                           replaced, or
                  (e)      the Chief Forester determines a new allowable annual
                           cut for the Timber Supply Area.
                  and the Licensor considers that the management plan is thereby
                  rendered inadequate.

         3.05     A notice referred to in paragraph 3.04 must specify
                  (a)      why the Licensor considers the management plan has
                           been rendered inadequate,
                  (b)      the extent to which the management plan is
                           inadequate, and
                  (c)      the changes required by the Licensor.

         3.06     Where the Licensor gives a notice referred to in paragraph
                  3.04 to the Licensee, the Licensee will, within three (3)
                  months after the date on which the notice is given, submit for
                  the Licensor's approval a proposed amendment to the management
                  plan, which incorporates the changes referred to in
                  subparagraph 3.05(c), to have effect during the unexpired term
                  of the management plan.

         3.07     If the Licensee fails to comply with the requirements of
                  paragraph 3.06, the management plan then in effect will expire
                  three (3) months after the date on which the notice referred
                  to in paragraph 3.04 is given to the Licensee, in which case
                  the Licensee will submit for the Licensor's approval a
                  proposed management plan to replace the management plan which
                  expires under this paragraph.

         3.08     A proposed management plan submitted by the Licensee under
                  paragraph 3.02, 3.03, or 3.07 must be signed and sealed by a
                  professional forester and signed by the Licensee or the
                  Licensee's authorized signatory, and must

                  (a)      be prepared according to the guidelines set or
                           approved by the Ministry of Forests, which are in
                           effect four (4) months prior to the date on which the
                           proposed management plan is required to be submitted,
                  (b)      be consistent with this Licence, and any land and
                           resource management plan and local resource use plan
                           in effect at the time the proposed management plan is
                           submitted,
                  (c)      incorporate the commitments which
                           (i)      were made by the Licensee
                                    (A)      in the application on which the
                                             award of the forest licence
                                             replaced by this Licence or any
                                             predecessor to that forest licence
                                             was based,


                                       3.
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                                    (B)      in accepting the offer of the
                                             forest licence replaced by this
                                             Licence or any predecessor to that
                                             forest licence, or
                                    (C)      as a result of a request for the
                                             Minister's consent for the purposes
                                             of Section 50 of the Forest Act,
                                             and
                           (ii)     remain in effect at the time the proposed
                                    management plan is submitted,
                           unless the Minister exempts the Licensee in whole or
                           in part from the requirements of this subparagraph,
                  (d)      based on the best information readily available to
                           the Licensee, describe the timber and non-timber
                           resources within the planning area,
                  (e)      specify measures to be taken, specifications to be
                           followed, and standards to be met by the Licensee in
                           the planning area to provide for
                           (i)      integrated resource management,
                           (ii)     forest fire prevention and suppression,
                                    prescribed fire, and fuel management,
                           (iii)    disease and pest management,
                           (iv)     road planning, reconnaissance, survey,
                                    design and construction, road maintenance
                                    and road deactivation,
                           (v)      harvesting methods and utilization standards
                                    appropriate to the types of timber and
                                    terrain within the planning area,
                           (vi)     basic silviculture and, if applicable,
                                    incremental silviculture, and
                           (vii)    any other forest management assumptions or
                                    constraints inherent in a land and resource
                                    management plan or local resource use plan
                                    in effect at the time the proposed
                                    management plan is submitted,
                           which meet or, if the Licensee chooses, exceed the
                           applicable measures, standards or specifications
                           which have been set or approved by the Ministry of
                           Forests or are contained in a land and resource
                           management plan or local resource use plan in effect
                           at the time the proposed management plan is
                           submitted,

                  (f)      specify measures to be taken by the Licensee to
                           (i)      gather information regarding, and where the
                                    Licensor requires, consult with
                                    (A)      other licensees, and
                                    (B)      trappers, guide outfitters, range
                                             tenure holders, and other licensed
                                             resource users,
                                    who may be operating in the planning area,
                                    and
                           (ii)     coordinate the Licensee's operations with
                                    (A)      the small business forest
                                             enterprise program,
                                    (B)      other licensees, and
                                    (C)      trappers, guide outfitters, range
                                             tenure holders, and other licensed
                                             resource users


                                       4.
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                                    operating in the planning area,
                  (g)      specify measures to be taken by the Licensee to
                           consult with aboriginal people regarding sustenance
                           activities they may be carrying out in the planning
                           area,
                  (h)      have been referred to resource agencies in accordance
                           with Part 5,
                  (i)      have been made available for public viewing in
                           accordance with Part 5, and
                  (j)      include a summary of
                           (i)      all input received under Part 5 from
                                    resource agencies and the public not later
                                    than two (2) weeks prior to submission of
                                    the proposed management plan to the
                                    Licensor, and
                           (ii)     any modifications made to the proposed
                                    management plan, prior to its submission to
                                    the Licensor, in response to this input.

         3.09     Subject to paragraph 3.10, the Licensor will approve a
                  proposed management plan submitted under paragraph 3.02, 3.03,
                  or 3.07, subject to such conditions as the Licensor considers
                  necessary or appropriate, if
                  (a)      the Licensor is satisfied that the proposed
                           management plan meets the requirements of paragraph
                           3.08,
                  (b)      the proposed management plan specifies measures
                           referred to in subparagraphs 3.08 (f) and (g) which
                           are satisfactory to the Licensor, and
                  (c)      the modifications, if any, made to address the input
                           referred to in subparagraph 3.08 (j) are satisfactory
                           to the Licensor.

         3.10     Before approving a proposed management plan under paragraph
                  3.09, the Licensor may consult
                  (a)      resource agencies,
                  (b)      aboriginal people who may be carrying out sustenance
                           activities in the planning area,
                  (c)      trappers, guide outfitters, range tenure holders, and
                           other licensed resource users who may be operating in
                           the planning area,
                  (d)      other licensees who may be operating in the planning
                           area,
                  (e)      any local government which may be interested in, or
                           affected by, operations under this Licence, and
                  (f)      any member of the public who provided input regarding
                           the proposed management plan,
                  and may consider any input received as a result of
                  consultation under this paragraph in approving a proposed
                  management plan.

         3.11     Where the Licensor does not approve a proposed management
                  plan,
                  (a)      the Licensor will specify in a notice given to the
                           Licensee why the Licensor has not approved the
                           management plan, and
                  (b)      the Licensee will submit a new or revised proposed
                           management plan, as required by the Licensor.


                                       5.
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         3.12     A management plan is deemed to be part of this Licence.

         3.13     Subject to paragraphs 3.01, 3.07, 3.14, and 3.15, a management
                  plan expires five years after the date on which it takes
                  effect.

         3.14     If the Licensor does not give the notice referred to in
                  subparagraph 3.11(a) to the Licensee within three (3) months
                  of the date on which the proposed management plan was
                  submitted, the term of the management plan then in effect is
                  deemed to be extended to a date six (6) months after the date
                  on which the notice referred to in subparagraph 3.11(a) is
                  given to the Licensee.

         3.15     At the request of the Licensee, the Licensor may extend the
                  term of a management plan.

4.00     DEVELOPMENT PLANS

         4.01     A five-year development plan approved under the forest licence
                  replaced by this Licence and still in effect on the date
                  immediately preceding the date on which that forest licence
                  expires is deemed to be the development plan in effect under
                  this Licence until 
                  (a)      one year after the date on which the five-year
                           development plan took effect under the forest licence
                           replaced by this Licence, or
                  (b)      June 1, 1994,

                  whichever is later.

         4.02     If there was no approved five-year development plan in effect
                  under the forest licence replaced by this Licence on the date
                  immediately preceding the date on which that forest licence
                  expires, then the Licensee, not later than 6 months after the
                  date specified in paragraph 1.02, will submit for the District
                  Manager's approval a proposed development plan for the
                  planning area for a period of
                  (a)      five years, or
                  (b)      more than five years, if the Licensee so chooses,

                  beginning on the date specified in paragraph 1.02.

         4.03     The Licensee, not less than three (3) months prior to the
                  expiration of the development plan then in effect, will submit
                  for the District Manager's approval a proposed development
                  plan for the planning area for a succeeding period of 
                  (a)      five (5) years, or 
                  (b)      more than five (5) years, if the Licensee so chooses.

         4.04     If the Licensor gives a notice referred to in paragraph 3.04
                  to the Licensee, the Licensor may at the same time give a
                  notice to the Licensee requiring


                                       6.
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                  the Licensee to amend the development plan to ensure
                  consistency with the changes referred to in subparagraph
                  3.05(c)

         4.05     Where the Licensor gives a notice referred to in paragraph
                  4.04 to the Licensee, the Licensee will, within three (3)
                  months after the date on which the notice is given, submit for
                  the District Manager's approval a proposed amendment to the
                  development plan to have effect during the unexpired term of
                  the development plan.

         4.06     If the Licensee fails to comply with the requirements of
                  paragraph 4.05, the development plan then in effect will
                  expire three (3) months after the date on which the notice
                  referred to in paragraph 4.04 is given to the Licensee, in
                  which case the Licensee will submit for the District Manager's
                  approval a proposed development plan to replace the
                  development plan which expires under this paragraph.

         4.07     A proposed development plan submitted under paragraph 4.02,
                  4.03, or 4.06 must be signed and sealed by a professional
                  forester and signed by the Licensee or the Licensee's
                  authorized signatory, and must 
                  (a)      be prepared according to the guidelines set or
                           approved by the Ministry of Forests, which are in
                           effect four (4) months prior to the date on which the
                           proposed development plan is required to be
                           submitted,
                  (b)      be consistent with this Licence and the management
                           plan in effect at the time the proposed development
                           plan is submitted,
                  (c)      set out a proposed harvesting sequence of cut blocks
                           over a period of not less than five (5) years,
                           categorizing these cut blocks as follows:
                           (i)      cut blocks covered by existing cutting
                                    permits,
                           (ii)     cut blocks covered by outstanding cutting
                                    permit applications submitted to the
                                    District Manager,
                           (iii)    cut blocks for which the Licensee intends to
                                    submit cutting permit applications during
                                    the term of the proposed development plan,
                                    and
                           (iv)     cut blocks for which the Licensee does not
                                    intend to submit cutting permit applications
                                    during the term of the proposed development
                                    plan,
                  (d)      include the following information regarding the cut
                           blocks referred to in subparagraph (c):
                           (i)      season of operation, logging system and
                                    reforestation method, and
                           (ii)     the status of adjacent logged areas,
                  (e)      include one or more detailed maps of the following
                           information:
                           (i)      based on the best information readily
                                    available to the Licensee,
                                    (A)     the forest cover,


                                       7.
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                                    (B)      recreation areas, community
                                             watersheds, fish spawning, fish
                                             rearing and fish migration areas,
                                             critical wildlife habitats, and any
                                             other areas subject to integrated
                                             resource management constraints,
                                             and
                                    (C)      private properties, foreshore
                                             leases, and public utilities within
                                             the planning area,
                           (ii)     based on information gathered by the
                                    Licensee for the area covered by the
                                    proposed development plan,
                                    (A)      operability and contour lines,
                                    (B)      sensitive soils, unstable slopes,
                                             and areas subject to visual quality
                                             constraints,
                                    (C)      boundaries of
                                             (I)      cut blocks referred to in
                                                      subparagraph (c), and
                                             (II)     existing cutting permits,
                                    (D)      existing roads including, where
                                             applicable, linkage to the public
                                             road system, timber processing
                                             facilities and log dumps,
                                    (E)      proposed roads, including bridges
                                             and major culverts,
                                    (F)      roads under construction,
                                    (G)      roads which have been deactivated
                                             to a temporary or semi-permanent
                                             level,
                                    (H)      fire breaks and fuel management
                                             problem areas, and
                                    (I)      log handling and storage areas,
                                             including existing or proposed log
                                             dump sites,
                           (iii)    based on consultation carried out in
                                    accordance with the measures specified in
                                    the management plan, the location of areas
                                    where aboriginal people have indicated they
                                    may be carrying out sustenance activities,
                           (iv)     based on information gathered, or
                                    consultation carried out, in accordance with
                                    the measures specified in the management
                                    plan, the location of areas where
                                    (A)      other licensees, and
                                    (B)      trappers, guide outfitters, range
                                             tenure holders, and other licensed
                                             resource users
                                    may be operating in the planning area, and
                           (v)      any other information required under the
                                    guidelines referred to in subparagraph (a),
                  (f)      include a Road Maintenance Plan complying with the
                           requirements of paragraph 10.04 and a Road
                           Deactivation Plan complying with the requirements of
                           paragraph 10.05,
                  (g)      have been referred to resource agencies in accordance
                           with Part 5,
                  (h)      have been made available for public viewing in
                           accordance with Part 5, and
                  (i)      include a summary of
                           (i)      all input received under Part 5 from
                                    resource agencies and the public not later
                                    than two (2) weeks prior to the date the


                                       8.
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                                    development plan is required to be submitted
                                    to the District Manager, and
                           (ii)     any modifications made to the proposed
                                    development plan, prior to its submission to
                                    the District Manager, in response to this
                                    input.

         4.08     Subject to paragraphs 4.09 and 4.10, the District Manager will
                  approve a proposed development plan submitted under paragraph
                  4.02, 4.03, or 4.06, subject to such conditions as the
                  District Manager considers necessary or appropriate, if 

                  (a)      the District Manager is satisfied that the proposed
                           development plan meets the requirements of paragraph
                           4.07,
                  (b)      the proposed harvesting sequence is satisfactory to
                           the District Manager,
                  (c)      the District Manager is prepared to accept cutting
                           permit applications for the cut blocks referred to in
                           clause 4.07(c)(iii), and
                  (d)      the modifications, if any, made to address the input
                           referred to in subparagraph 4.07 (i) are satisfactory
                           to the District Manager.

         4.09     The District Manager will not approve a proposed development
                  plan unless there is a management plan in effect.

         4.10     Before approving a proposed development plan under paragraph 
                  4.08, the District Manager may consult
                  (a)      resource agencies,
                  (b)      aboriginal people who may be carrying out sustenance
                           activities in the planning area,
                  (c)      trappers, guide outfitters, range tenure holders, and
                           other licensed resource users who may be operating in
                           the planning area,
                  (d)      other licensees who may be operating in the planning
                           area,
                  (e)      any local government which may be interested in, or
                           affected by, operations under this Licence, and
                  (f)      any member of the public who provided input regarding
                           the proposed development plan, and
                  may consider any input received as a result of consultation
                  under this paragraph in approving a proposed development plan.

         4.11     Where the District Manager does not approve a proposed
                  development plan,
                  (a)      the District Manager will specify in a notice given
                           to the Licensee why the District Manager has not
                           approved the development plan, and
                  (b)      the Licensee will submit a new or revised proposed
                           development plan, as required by the District
                           Manager.

         4.12     A development plan is deemed to be part of this Licence.


                                       9.
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         4.13     Subject to paragraphs 4.01, 4.06, 4.14, and 4.15, a
                  development plan expires [one/two] year[s] after the date on
                  which it takes effect.

         4.14     If the District Manager does not give the notice referred to
                  in subparagraph 4.11(a) to the Licensee within 45 days of the 
                  date on which the proposed development plan was submitted, 
                  then the term of the development plan then in effect is deemed
                  to be extended to a date three (3) months after the date on 
                  which the notice referred to in subparagraph 4.11(a) is given
                  to the Licensee.

         4.15     At the request of the Licensee, the District Manager may
                  extend the term of the development plan for a period not
                  greater than one (1) year.

         4.16     Before extending the term of a development plan under
                  paragraph 4.15, the District Manager may require the Licensee 
                  to amend the development plan to the extent required to ensure
                  compliance with the management plan in effect at the time the
                  Licensee requests an extension to the term of the development
                  plan.

5.00     INPUT FROM RESOURCE AGENCIES AND THE PUBLIC

         5.01     Before submitting a proposed management plan under 
                  paragraph 3.02, 3.03, or 3.07, or a proposed development plan 
                  under paragraph 4.02, 4.03, or 4.06, the Licensee will 
                  (a)      at least three (3) months before the proposed
                           management plan or proposed development plan is
                           submitted to the Licensor or District Manager, refer
                           the proposed management plan or proposed development
                           plan to those resource agencies specified in a notice
                           referred to in paragraph 5.04,
                  (b)      make the proposed management plan or proposed
                           development plan available for public viewing
                           (i)      subject to paragraph 5.03, for at least 
                                    5 days with the last day being at least 
                                    30 days before the proposed management plan 
                                    or proposed development plan is submitted to
                                    the Licensor or District Manager,
                           (ii)     at locations within communities and at times
                                    which
                                    (A)      are convenient to the public, and
                                    (B)      have been approved by the Licensor
                                             or District Manager, as the case
                                             may be, and
                  (c)      in accordance with paragraph 5.02, advertise where 
                           and when the proposed management plan or proposed
                           development plan will be available for public
                           viewing.

         5.02     Subject to paragraph 5.03, the Licensee will advertise for the
                  purposes of subparagraph 5.01(c), at least twice within a 
                  period of two (2) consecutive weeks in at least one newspaper
                  circulating in the Timber Supply Area,


                                       10.
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                  with the last advertisement appearing at least two (2) weeks
                  prior to the first date on which the proposed management plan
                  or proposed development plan will be available for public
                  viewing.

         5.03     The Licensor or the District Manager, in a notice given to the
                  Licensee not less than four (4) weeks prior to the first date
                  on which the Licensee must advertise under paragraph 5.02, may
                  specify 
                  (a)      a number of days greater or less than the five (5)
                           days referred to in subparagraph 5.01(b), and
                  (b)      a period greater or less than the two (2) weeks
                           referred to in paragraph 5.02.

         5.04     The Licensor or District Manager may from time to time, in a
                  notice given to the Licensee, specify resource agencies for
                  the purposes of paragraph 5.01.

6.00     ANNUAL REPORT

         6.01     The District Manager, in a notice given to the Licensee on or
                  before April 1, may require the Licensee to submit an annual
                  report containing such information as the District Manager
                  requires regarding
                  (a)      the Licensee's performance, over the previous
                           calendar year, in relation to its obligations under
                           this Licence, and
                  (b)      the processing or other use or disposition of the
                           timber harvested under this Licence,
                  where the information is not or will not be included in any
                  other reports which the Licensee must submit under this
                  Licence or the Forest Act.

         6.02     Upon receipt of a notice referred to in paragraph 6.01, the
                  Licensee, on or before the date specified in the notice, will
                  submit an annual report to the District Manager containing the
                  required information.

         6.03     Subject to paragraph 6.04, the District Manager may include 
                  the information contained in an annual report submitted under
                  paragraph 6.02 in any reports prepared by the Ministry of 
                  Forests for public review.

         6.04     Subject to the Freedom Of Information And Privacy Act, the
                  District Manager will not disclose information provided in
                  confidence by the Licensee in an annual report submitted under
                  paragraph 6.02.

         6.05     The Licensee may make a copy of an annual report submitted
                  under paragraph 6.02 available for public review, and may 
                  display a copy at any public viewing under Part 5.


                                       11.
<PAGE>   12
7.00     CUTTING PERMITS

         7.01     All cutting permits in effect under the forest licence that is
                  replaced by this Licence continue in effect under this Licence
                  for the duration of their respective terms.

         7.02     Subject to paragraph 7.04, the Licensee may submit cutting 
                  permit applications for cut blocks referred to in clause
                  4.07(c)(iii), which are categorized as such in the 
                  development plan.

         7.03     Subject to paragraphs 7.05, 7.06, and 7.07, upon receipt of 
                  a cutting permit application referred to in paragraph 7.02,
                  the District Manager will issue a cutting permit to the 
                  Licensee if the District Manager is satisfied that the cutting
                  permit application meets the requirements of paragraph 7.04.

         7.04     A cutting permit application referred to in paragraph 7.02
                  must be signed and sealed by a professional forester and
                  signed by the Licensee or the Licensee's authorized signatory
                  and must 
                  (a)      contain such information as is required by the
                           District Manager,
                  (b)      subject to paragraph 7.09, be accompanied by a 
                           proposed logging plan, and
                  (c)      be consistent with the management plan and
                           development plan, and the pre-harvest silviculture
                           prescription approved for the area on which the
                           timber to be harvested is located.

         7.05     The District Manager will not issue a cutting permit under
                  paragraph 7.03, unless:
                  (a)      subject to paragraph 7.09, the District Manager has
                           approved the logging plan accompanying the cutting
                           permit application,
                  (b)      the District Manager has approved a pre-harvest
                           silviculture prescription for the area on which
                           timber to be harvested is located, and
                  (c)      there is a management plan and development plan in
                           effect.

         7.06     The District Manager may consult
                  (a)      resource agencies,
                  (b)      aboriginal people who may be carrying out sustenance
                           activities in the planning area,
                  (c)      trappers, guide outfitters, range tenure holders, and
                           other licensed resource users who may be operating in
                           the planning area, and
                  (d)      other licensees who may be operating in the planning
                           area,

                  prior to issuing a cutting permit.

         7.07     The District Manager may delay issuing a cutting permit if he
                  or she is satisfied that


                                       12.
<PAGE>   13
                  (a)      the Licensee will be able to harvest the allowable
                           annual cut under existing cutting permits and road
                           permits, and
                  (b)      the delay will not compromise the development plan.

         7.08     Where the District Manager
                  (a)      is not satisfied that a cutting permit application
                           meets the requirement of paragraph 7.04,
                  (b)      is prohibited under paragraph 7.05, from issuing a
                           cutting permit,
                  (c)      is carrying out consultations under paragraph 7.06,
                           or
                  (d)      is delaying issuing the cutting permit under
                           paragraph 7.07, the District Manager will notify the
                           Licensee within 60 days of the date on which the 
                           cutting permit application was submitted.

         7.09     The District Manager may exempt the Licensee from the
                  requirement under paragraph 7.04(b), in which case the 
                  District Manager is exempted from the prohibition under 
                  subparagraph 7.05(a); however, where a cutting permit is 
                  issued prior to the approval of the logging plan, the Licensee
                  will not commence operations under the cutting permit until 
                  a logging plan has been approved.

         7.10     If the District Manager requests the Licensee to remove
                  windthrown, dead, damaged or diseased timber within the Timber
                  Supply Area, and the Licensee agrees to do so, the District
                  Manager may 
                  (a)      amend an existing cutting permit, or
                  (b)      issue a cutting permit, 
                  to authorize the Licensee to harvest the timber.

         7.11     A cutting permit must
                  (a)      subject to this Licence and the Forest Act, and in
                           accordance with the provisions of the cutting permit,
                           authorize Crown timber to be harvested from proximate
                           cut blocks located within an area of Crown land in
                           the Timber Supply Area,
                  (b)      be consistent with this Licence, the Forest Act, the
                           pre-harvest silviculture prescription approved for
                           the area on which the timber is to be harvested, and,
                           subject to paragraphs 7.10 and 7.15, the management 
                           plan and development plan in effect on the date the 
                           cutting permit is issued,
                  (c)      subject to paragraph 7.14, be for a term not 
                           exceeding three (3) years,
                  (d)      prescribe the locations of roads to be built or
                           deactivated on the area covered by the cutting
                           permit, and the specifications and standards to be
                           followed in building or deactivating these roads,
                  (e)      prescribe utilization standards and forestry
                           practices to be followed in timber harvesting
                           operations carried on under the cutting permit,
                  (f)      provide for the payment of stumpage on timber
                           harvested under the cutting permit,


                                       13.
<PAGE>   14
                  (g)      set out procedures for assessing the volumes of
                           timber wasted or damaged by the Licensee, and provide
                           for a charge based on applicable stumpage rates to be
                           paid by the Licensee,
                  (h)      specify a timber mark to be used in conjunction with
                           the timber harvesting operations carried on under the
                           cutting permit,
                  (i)      specify whether the cutting permit is scale based or
                           cruise based, and
                  (j)      subject to subparagraph (b), include such other
                           provisions as the District Manager considers
                           necessary or appropriate.

         7.12     Subject to paragraphs 7.13, 7.14 and 7.15, the District
                  Manager may amend a cutting permit only with the consent of
                  the Licensee.

         7.13     A cutting permit that does not comply with the requirements of
                  paragraph 7.11 is not void; however, 
                  (a)      on the request of the Licensee, or 
                  (b)      on 4 weeks' notice to the Licensee, 

                  the District Manager may amend the cutting permit to the 
                  extent required to ensure compliance with the requirements of
                  paragraph 7.11.

         7.14     The District Manager may, in a notice given to the Licensee,
                  extend the term of a cutting permit.

         7.15     Where under paragraph 7.14 the District Manager extends the 
                  term of a cutting permit, the District Manager may, in a 
                  notice given to the Licensee, amend the cutting permit to the 
                  extent required to ensure compliance with the management plan 
                  and development plan in effect on the date the term of the
                  cutting permit is extended.

         7.16     Unless exempted in writing by the District Manager or a person
                  authorized by the District Manager, the Licensee will define
                  on the ground the boundaries of the areas authorized for
                  harvesting under a cutting permit.

         7.17     Timber cut under this Licence or a road permit must be
                  (a)      marked according to the Forest Act, and
                  (b)      unless the timber is cut under a cruise based cutting
                           permit, scaled according to the Forest Act and any
                           procedures set or approved by the Ministry of
                           Forests.

         7.18     A cutting permit is deemed to be part of this Licence.

         7.19     An approved logging plan referred to in paragraph 7.05 or 7.09
                  is deemed to be part of this Licence and the applicable 
                  cutting permit.


                                       14.
<PAGE>   15
         7.20     The Licensee will not harvest any timber under a cutting
                  permit, unless a pre-harvest silviculture prescription has
                  been approved for the area on which the timber is located.

         7.21     A cutting permit or approved logging plan that is inconsistent
                  with the pre-harvest silviculture prescription approved for
                  the area covered by the cutting permit is not void, but to the
                  extent of the inconsistency the pre- harvest silviculture
                  prescription will prevail.

8.00     CUT CONTROL

         8.01     The allowable annual cut must be harvested in accordance with
                  the cut control provisions of the Forest Act.

         8.02     The five-year cut control period for this Licence commences
                  January 1, 1992.

9.00     FINANCIAL AND DEPOSITS

         9.01     Where any money is payable by the Licensee under the Forest
                  Act in respect of this Licence or a road permit, the money
                  payable under the Forest Act is also deemed to be money
                  payable under this Licence.

         9.02     In addition to any money payable by the Licensee under
                  paragraph 9.01, the Licensee will pay to the Crown, 
                  immediately upon receipt of a notice issued on behalf of the 
                  Crown, 
                  (a)      stumpage at rates determined, redetermined and varied
                           under the Forest Act in respect of timber harvested
                           under a cutting permit or a road permit,
                  (b)      a bonus bid in the amount of $Nil/m3 in respect of
                           timber harvested under a cutting permit, and
                  (c)      any charges in respect of an assessment referred to
                           in subparagraph 7.11(g).

         9.03     During the term of this Licence, the Licensee will maintain on
                  deposit with the Crown an amount prescribed under the Forest
                  Act, in cash or in negotiable securities acceptable to the
                  Minister, as security for the Licensee's performance of its
                  obligations
                  (a)      under this Licence or a road permit, or road permit,
                           and
                  (b)      under the Forest Act in respect of this Licence or a
                           road permit, and

                  where the Licensor gives the Licensee a notice that an amount
                  has been taken under this Part from the deposit the Licensee,
                  within four (4) weeks of the date on which the notice is 
                  given, will pay to the Crown, in cash or negotiable securities
                  acceptable to the Minister, an amount sufficient to replenish
                  the deposit.


                                       15.
<PAGE>   16
         9.04     If the Licensee fails
                  (a)      to pay money that the Licensee is required to pay to
                           the Crown under this Licence or a road permit, or
                           under the Forest Act in respect of this Licence or a
                           road permit, or
                  (b)      to otherwise perform its obligations under this
                           Licence or a road permit, or under the Forest Act in
                           respect of this Licence or a road permit,
                  then the Licensor or District Manager may, after at least four
                  (4) weeks notice to the Licensee, 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 reasonably
                           incurred by the Licensor or District Manager in
                           remedying the Licensee's failure to perform its
                           obligations, or
                  (e)      an amount equal to the Licensor's or District
                           Manager's estimate of the costs which the Licensor or
                           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
                  sold.

         9.05     A notice referred to in paragraph 9.04, must specify:
                  (a)      the obligation which the Licensee has failed to
                           perform, and
                  (b)      amount of money the Licensor or District Manager
                           intends to take from the deposit.

         9.06     Subject to paragraphs 9.08, 9.09, and 9.10, where
                  (a)      the Licensor or District Manager, under 
                           paragraph 9.04, takes from the deposit an amount 
                           equal to the Licensor's or District Manager's 
                           estimate of the costs which the Licensor or District
                           Manager could reasonably expect to incur in remedying
                           the Licensee's failure to perform its obligations, 
                           and
                  (b)      the costs reasonably incurred by the Licensor or
                           District Manager in remedying the Licensee's failure
                           to perform its obligations are less than the amount
                           taken from the deposit,
                  the Licensor or District Manager, as the case may be, will as
                  soon as practicable return to the Licensee an amount equal to
                  the difference between the amount taken from the deposit and
                  the costs incurred by the Licensor or District Manager.

         9.07     Where
                  (a)      the Licensor or District Manager, under 
                           paragraph 9.04, takes from the deposit an amount
                           equal to the Licensor's or District Manager's
                           estimate of the costs which the Licensor or District
                           Manager could reasonably expect to incur in remedying
                           the Licensee's failure to perform its obligations,
                           and


                                       16.
<PAGE>   17
                  (b)      the costs reasonably incurred by the Licensor or
                           District Manager in remedying the Licensee's failure
                           to perform its obligations are greater than the
                           amount taken from the deposit,
                  the Licensor or District Manager may take from the deposit an
                  additional amount equal to the difference between the costs
                  incurred by the Licensor or District Manager and the amount
                  originally taken from the deposit, and for that purpose a
                  security included in the deposit may be sold.

         9.08     Where the Licensor or District Manager, under paragraph 9.04,
                  takes from the deposit an amount equal to the Licensor or
                  District Manager's estimate of the costs which the Licensor or
                  District Manager could reasonably expect to incur in remedying
                  the Licensee's failure to perform its obligations, the
                  Licensor or District Manager, as the case may be, is under no
                  obligation to remedy the Licensee's failure.

         9.09     Where
                  (a)      the Licensor or District Manager, under paragraph
                           9.04, takes from the deposit an amount equal to the
                           Licensor's or District Manager's estimate of the
                           costs which the Licensor or District Manager could
                           reasonably expect to incur in remedying the
                           Licensee's failure to perform its obligations,
                  (b)      Licensor or District Manager does not remedy the
                           Licensee's failure to perform its obligations, and
                  (c)      the Licensor or District Manager, as the case may be,
                           gives a notice to the Licensee indicating that the
                           Crown will not be remedying the Licensee's failure to
                           perform its obligations,

                  then, subject to paragraph 9.10, the Licensor or the District
                  Manager, as the case may be, may retain the amount taken from
                  the deposit under paragraph 9.04.

         9.10     If, after receiving a notice referred to in paragraph 9.09,
                  the Licensee
                  (a)      remedies the failure to perform its obligations, and
                  (b)      gives a notice to that effect to the Licensor or
                           District Manager, as the case may be, within three
                           (3) months of the date on which the notice referred
                           to in paragraph 9.09 , is given to the Licensee, or
                           within such longer period as the Licensor may
                           approve,
                  then the Licensor or District Manager, as the case may be, 
                  will return to the Licensee an amount equal to the difference
                  between the amount taken from the deposit and any costs 
                  reasonably incurred by the Licensor or District Manager in
                  respect of the Licensee's failure to perform its obligations.

         9.11     If the Licensor or the District Manager considers that
                  (a)      any operation that is to be carried out under this
                           Licence or a road permit is likely to cause damage to
                           persons or property, and


                                       17.
<PAGE>   18
                  (b)      the deposit is insufficient to indemnify the Crown
                           for any liability which the Crown might incur as a
                           consequence of the operation,
                  then Licensor or District Manager may require the Licensee to
                  maintain with the Crown a special deposit, in cash or in
                  negotiable securities acceptable to the Minister, in the
                  amount determined by the Licensor or the District Manager.

         9.12     If the Licensee fails to
                  (a)      remedy any damage resulting from an operation
                           referred to in paragraph 9.11, or
                  (b)      compensate any person who suffers a loss as a result
                           of an operation referred to in paragraph 9.11,
                  the Licensor or the District Manager may, after at least four
                  (4) weeks' notice to the Licensee, take an amount from the
                  special deposit sufficient to indemnify the Crown for any
                  liability which is or may be incurred by the Crown as a
                  consequence of a failure referred to in subparagraph (a) or
                  (b).

         9.13     A notice referred to in paragraph 9.12 must specify:
                  (a)      the nature of the Licensee's failure, and
                  (b)      the amount of money the Licensor or District Manager
                           intends to take from the special deposit.

         9.14     Subject to the Forest Act, the Licensor will refund to the
                  Licensee
                  (a)      the deposit, less deductions made under paragraphs
                           9.04 and 9.07, when
                           (i)      this Licence terminates or expires and is
                                    not replaced under section 13 of the Forest
                                    Act, and
                           (ii)     the Licensor is satisfied that the Licensee
                                    has fulfilled its obligations under this
                                    Licence, and

                  (b)      a special deposit, less deductions made under
                           paragraph 9.12, when the Licensor or District
                           Manager, acting reasonably, is satisfied that the
                           Crown is no longer at risk of being held liable as a
                           consequence of an operation referred to in paragraph
                           9.11.

10.00    ROADS

         10.01    Subject to the provisions of a cutting permit or road permit,
                  the Licensee will ensure that the specifications, standards
                  and locations of all roads the Licensee builds on Crown land
                  under a cutting permit or road permit are consistent with the
                  management plan and development plan in effect at the time the
                  road is built.

         10.02    Upon the expiry of a road permit, all improvements, including
                  roads and bridges, constructed by the Licensee under the
                  authority of the road permit will vest in the Crown, without
                  right of compensation to the Licensee, unless otherwise
                  specified in the road permit.


                                       18.
<PAGE>   19
         10.03    The Licensee will not remove any improvements referred to in
                  paragraph 10.2, unless authorized to do so by the Licensor.

         10.04    The Road Maintenance Plan included in the Development Plan
                  must
                  (a)      identify those roads shown on the maps referred to in
                           subparagraph 4.07(e) which the Licensee will maintain
                           for harvesting, silviculture and forest protection
                           purposes, and
                  (b)      specify the maintenance operations which the Licensee
                           will carry out to
                           (i)      protect the structural integrity of the
                                    roads referred to in subparagraph (a) and
                                    the cleared area of the road right-of-way
                                    adjoining these roads,
                           (ii)     keep drainage systems, including culverts
                                    and ditches, functional,
                           (iii)    minimize surface erosion, and
                           (iv)     ensure these roads are safe for forest
                                    harvesting or other industrial purposes.

         10.05    The Road Deactivation Plan included in the Development Plan
                  must
                  (a)      identify those roads shown on the maps referred to in
                           subparagraph 4.07(e), which the Licensee will
                           deactivate each year over the next three (3) years,
                           specifying in each case whether the deactivation will
                           be temporary, semi-permanent or permanent,
                  (b)      specify the operations required to
                           (i)      stabilize the roads referred to in
                                    subparagraph (a) and the cleared area of the
                                    road right-of-way adjoining these roads, and
                           (ii)     restore or maintain the natural drainage at
                                    each road location,
                  (c)      identify those roads shown on the maps referred to in
                           subparagraph 4.07(e) which have been deactivated by
                           the Licensee to a temporary or semi-permanent level
                           in the past year, and any other roads that have been
                           permanently deactivated by the Licensee in the past
                           year, and
                  (d)      specify the type of vehicle which can access the
                           roads referred to in subparagraph (a) or (c).

11.00    FIRE PROTECTION

         11.01    Before April 1 of each year during the term of this Licence,
                  the Licensee will submit for the District Manager's approval a
                  fire protection pre-organization plan consistent with this
                  Licence, and will include a duty roster in the fire protection
                  pre-organization plan.

         11.02    An approved fire protection pre-organization plan is deemed to
                  be part of this Licence.


                                       19.
<PAGE>   20
         11.03    The Licensee's obligations under an approved fire protection
                  pre-organization plan are in addition to and do not replace
                  its commitments in the management plan or development plan or
                  its obligations under section 121 of the Forest Act.

12.00    FORESTRY

         12.01    The Licensee will, at its own expense and in accordance with
                  the Forest Act and pre-harvest silviculture prescriptions
                  approved by the District Manager, carry out basic silviculture
                  on the land from which timber is harvested under this Licence,
                  and the Licensee may enter onto Crown land for this purpose.

         12.02    If, under this Licence or the Forest Act, the Licensee is to
                  develop or maintain a recreation site or trail on Crown land
                  in the Timber Supply Area, the Licensee may enter onto Crown
                  land for this purpose.

         12.03    If the Licensee posts a sign concerning silviculture or the
                  development and maintenance of recreation sites or trails, the
                  sign must acknowledge any contribution made by the Crown in
                  respect of the silviculture or the development or maintenance
                  of recreation sites or trails.

         12.04    The Licensee will annually review pest management strategies
                  with the District Manager and, if required by the District
                  Manager, the Licensee will submit a pest treatment plan for
                  the District Manager's approval.

         12.05    The Licensee's obligations under an approved pest treatment
                  plan are in addition to and do not replace its commitments in
                  the management plan or development plan respecting pest
                  management.

13.00    CONTRACTORS

         13.01    The Licensor, in a notice given to the Licensee, may require
                  that a portion of the volume of timber harvested under this
                  Licence during any calendar year be harvested by persons under
                  contract with the Licensee, and, where a notice is given under
                  this paragraph, it is deemed to be part of this Licence.

         13.02    A notice given under the forest licence replaced by this
                  Licence, requiring a portion of the volume of timber harvested
                  under that forest licence be harvested by persons under
                  contract with the Licensee, is deemed to be a notice given
                  under paragraph 13.01 and a part of this Licence.

         13.03    The Licensee will comply with a notice referred to in
                  paragraph 13.01 or 13.02 unless the Minister relieves the
                  Licensee in whole or in part from the requirements of this
                  paragraph.


                                       20.
<PAGE>   21
         13.04    Compliance with a notice referred to in paragraph 13.01 or
                  13.02 will be calculated in accordance with the method
                  prescribed under the Forest Act.

         13.05    If in a calendar year the volume of timber harvested by
                  persons under contract with the Licensee is less than a volume
                  required in a notice referred to in paragraph 13.01 or 13.02,
                  the Licensee will on demand pay to the Crown, an amount of
                  money equal to 
                  (a)      the volume required in the notice minus the volume
                           harvested during the calendar year by persons under
                           contract, multiplied by
                  (b)      the weighted average of the stumpage rates, including
                           bonus bids if applicable, charged in invoices issued
                           to the Licensee during the calendar year for timber
                           harvested under this Licence,
                  unless the Minister relieves the Licensee in whole or in part
                  from the requirements of this paragraph.

14.00    TIMBER PROCESSING

         14.01    The Licensee will process all timber harvested under this
                  Licence or a road permit, or equivalent volumes, through a
                  timber processing facility 
                  (a)      owned or operated by the Licensee or an affiliate of
                           the Licensee within the meaning of the Company Act,
                           and
                  (b)      equipped to carry out debarking and chipping, 
                  unless the Minister exempts the Licensee in whole or in part
                  from the requirements of this paragraph.

         14.02    Where the Licensee
                  (a)      intends to close a timber processing facility or
                           reduce its production, or
                  (b)      has reason to believe that an affiliate of the
                           Licensee within the meaning of the Company Act
                           intends to close a timber processing facility or
                           reduce its production,
                  for a period of longer than 90 days the Licensee will give the
                  Minister at least three (3) months' notice prior to the
                  closure or reduction.

         14.03    Where
                  (a)      the Licensee, or
                  (b)      an affiliate of the Licensee within the meaning of
                           the Company Act, 
                  closes a timber processing facility or reduces its production
                  for a period longer than 90 days, the Licensee will on 
                  request of the Minister provide information regarding the 
                  volume of Crown timber processed through the timber 
                  processing facility during the 24-month period immediately 
                  preceding the closure or reduction in production level.

         14.04    The Licensee will continue to operate, and where applicable
                  construct or expand, a timber processing facility in
                  accordance with


                                       21.
<PAGE>   22
                  (a)      the proposal made in the application on which the
                           award of the forest licence replaced by this Licence
                           or any predecessor to that forest licence was based,
                           or
                  (b)      any modifications to that proposal which have been
                           approved by an appropriate official of the Ministry
                           of Forests.

15.00    LIABILITY AND INDEMNITY

         15.01    The Licensee will 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,
                  (b)      an employee of the Licensee,
                  (c)      a contractor of the Licensee who engages in any
                           activity or carries out any operation, including but
                           not restricted to harvesting operations, under or
                           associated with this Licence or a road permit, or
                  (d)      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
                           Licence or a road permit.

         15.02    For greater certainty, the Licensee has no obligation to
                  indemnify the Crown under paragraph 15.01 in respect of any
                  act or omission of 
                  (a)      an employee or agent of the Crown, in the course of
                           carrying out his or her duties as employee or agent
                           of the Crown, or
                  (b)      a person, other than the Licensee, to whom the Crown
                           has granted the right to use or occupy Crown land, in
                           the course of exercising those rights.

         15.03    Money taken under Part 9 from a deposit or special deposit,
                  money paid by the Licensee under paragraph 13.05 or 15.01, and
                  reductions in the allowable annual cut made under the Forest
                  Act are in addition to and not in substitution for any other
                  remedies available to the Crown in respect of a default of the
                  Licensee.

16.00    TERMINATION AND SURRENDER

         16.01    If this Licence is terminated, expires and is not replaced
                  under Section 13 of the Forest Act, or if this Licence is
                  cancelled, 

                  (a)      cutting permits will terminate when the expiration,
                           termination or cancellation occurs, and

                  (b)      title to all

                           (i)      improvements, including roads and bridges,
                                    constructed by the Licensee under the
                                    authority of this Licence, and


                                       22.
<PAGE>   23
                           (ii)     logs and special forest products which were
                                    harvested under the authority of this
                                    Licence and are still located on Crown land,

                           will vest in the Crown, without right of compensation
                           to the Licensee.

         16.02    The Licensee will not remove any improvements, logs or special
                  forest products referred to in subparagraph 16.01(b), unless
                  authorized to do so by the Licensor.

         16.03    Subject to paragraph 16.04, if the Licensee commits an act of
                  bankruptcy, makes a general assignment for the benefit of its
                  creditors or otherwise acknowledges its insolvency, the
                  Licensor may cancel this Licence in a notice given to the
                  Licensee.

         16.04    The Licensor will not cancel this Licence under paragraph
                  16.03 unless and until the Licensor gives a written notice to
                  every holder of a registered security interest that charges
                  this Licence, allowing a period of not less than 60 days prior
                  to cancellation during which the holder of the registered
                  security interest may exercise the rights and pursue the
                  remedies available in respect of the registered security
                  interest.

17.00    NOTICE

         17.01    A notice given under this Licence must be in writing.

         17.02    Where a notice is to be given under this Licence, it may be
                  (a)      delivered by hand, or
                  (b)      sent by prepaid registered mail addressed to the
                           address
                           (i)      specified on the first page of this Licence,
                                    or
                           (ii)     to such other address as is specified in a
                                    notice given in accordance with this Part.

         17.03    Where a notice is given under this Licence, it is deemed to
                  have been given
                  (a)      if it is given in accordance with subparagraph
                           17.02(a), on the date it is delivered,
                  (b)      if it is given in accordance with subparagraph
                           17.02(b), subject to paragraph 17.04, on the eighth
                           day after its deposit in a Canada Post Office at any
                           place in Canada.

         17.04    Where, between the time a notice is mailed in accordance with
                  subparagraph 17.02(b) and the time it is actually received by
                  a party, there occurs a postal strike, lockout or slowdown
                  that might reasonably affect delivery of the notice, the
                  notice is not deemed to be given until the party actually
                  receives it.


                                       23.
<PAGE>   24
18.00    MISCELLANEOUS

         18.01    This Licence is subject to the Forest Act, and is governed by
                  the laws of British Columbia.

         18.02    This Licence will enure to the benefit of, and be binding on,
                  the parties and their respective heirs, executors, successors
                  and permitted assigns.

         18.03    Where under this Licence the Licensor or the District Manager
                  has a discretion to impose a condition or require information,
                  the Licensor or District Manager will exercise this discretion
                  in a reasonable manner, having regard to the purposes and
                  functions of the Ministry of Forests set out in Section 4 of
                  the Ministry Of Forests Act.

19.00    INTERPRETATION

         19.01    In this Licence, unless the context otherwise requires:
                  (a)      "aboriginal people" includes registered and
                           non-registered Indians, Inuits and Metis,
                  (b)      "allowable annual cut" means, subject to paragraph 
                           2.01, the amount of timber the Licensee is 
                           authorized to harvest annually, as specified in 
                           paragraph 1.01,
                  (c)      "close" or "closure" means cessation of production of
                           the principal forest products normally produced by a
                           timber processing facility,
                  (d)      "cutting permit" means a cutting permit referred to
                           in paragraph 7.01, or issued under paragraph 7.03 or
                           7.10,
                  (e)      "deposit" means the deposit which the Licensee is
                           required to maintain under paragraph 9.03,
                  (f)      "development plan" means a development plan referred
                           to in paragraph 4.01, or approved under paragraph
                           4.08,
                  (g)      "District Manager" means a district manager appointed
                           under the Ministry Of Forests Act, for a forest
                           district in which all or part of the Timber Supply
                           Area is situated,
                  (h)      "Forest Act" means:
                           (i)      the Forest Act, R.S.B.C. 1979, c. 140, as
                                    amended, or the successor to this Act, if it
                                    is repealed, and
                           (ii)     the regulations enacted under this Act or
                                    its successor.
                  (i)      "harvest" includes entry on land for the purpose of
                           cutting and removing timber, cutting the timber and
                           removing the timber from the land,
                  (j)      "land and resource management plan" means a plan,
                           approved by an appropriate official of the government
                           of British Columbia, which provides direction for
                           land use, and establishes resource management
                           objectives and strategies, for all or part of the
                           Timber Supply Area,


                                       24.
<PAGE>   25
                  (k)      "licensees" means holders of agreements entered into
                           under the Forest Act,
                  (l)      "local resource use plan" means any plan approved by
                           the District Manager which provides guidelines for
                           resource use and development in all or part of the
                           planning area,
                  (m)      "logging plan" means one or more detailed maps
                           setting out how the Licensee proposes to conduct
                           harvesting and related operations on one or more cut
                           blocks covered or to be covered by a cutting permit,
                  (n)      "management plan" means a management plan referred to
                           in paragraph 3.01, or approved under paragraph 3.09,
                  (o)      "Minister" means the minister responsible for
                           administering the Forest Act,
                  (p)      "person" includes a corporation and a partnership,
                  (q)      "planning area" means that part of the Timber Supply
                           Area for which the Licensee is recognized as a major
                           user of the timber resource,
                  (r)      "resource agency" means any governmental agency,
                           ministry or department having jurisdiction over a
                           resource which, in the Licensor's or District
                           Manager's opinion, may be affected by any activity or
                           operation, including but not restricted to harvesting
                           activities or operations, engaged in or carried out
                           under or associated with this Licence or a road
                           permit,
                  (s)      "Road Deactivation Plan" means a road deactivation
                           plan referred to in paragraph 10.05,
                  (t)      "Road Maintenance Plan" means a road maintenance plan
                           referred to in paragraph 10.04,
                  (u)      "road permit" means a road permit entered into under
                           the Forest Act which provides access to timber
                           harvested, or to be harvested, under this Licence,
                  (v)      "special deposit" means a special deposit which the
                           Licensee is required to maintain under paragraph
                           9.11,
                  (w)      "sustenance activities" means activities associated
                           with traditional aboriginal life, such as hunting,
                           gathering and collecting activities, and includes
                           cultural, spiritual and religious activities,
                  (x)      "Timber Supply Area" means the timber supply area
                           described in paragraph 1.01.

         19.02    Unless otherwise provided in paragraph 19.01, if a word or
                  phrase used in this Licence is defined in the Forest Act, the
                  definition in the Forest Act applies to this Licence, and
                  where the word or phrase in the Forest Act is replaced by a
                  new word or phrase, this Licence is deemed to have been
                  amended accordingly.


                                       25.
<PAGE>   26
         19.03    Where a provision of the Forest Act referred to in this
                  Licence is renumbered, the reference in this Licence must be
                  construed as a reference to the provision as renumbered.

         19.04    In this Licence, unless the context otherwise requires,
                  (a)      the singular includes the plural and the plural
                           includes the singular, and
                  (b)      the masculine, the feminine and the neuter are
                           interchangeable.

         19.05    This Licence is divided into parts, paragraphs, subparagraphs,
                  clauses and subclauses, illustrated as follows:
                  1.00     part,
                           1.01     paragraph,
                                    (a)     subparagraph,
                                            (i)      clause,
                                                     (A)      subclause;
                  and a reference to a subparagraph, clause or subclause must be
                  construed as a reference to a subparagraph, clause or
                  subclause of the paragraph, subparagraph or clause, as the
                  case may be, in which the reference occurs.



                                       26.
<PAGE>   27

                  IN WITNESS WHEREOF this Licence has been executed by the
Licensor and the Licensee.

SIGNED on  _________________, 19___   
by the Regional Manager on           )
behalf of Her Majesty the Queen      )
in Right of the Province of British  )
Columbia in the presence of:         )
                                     )
___________________________________  )      ____________________________________
                                     )      ROSS R. TOZER       
___________________________________  )      NELSON FOREST REGION
                                            



THE COMMON SEAL OF the               )
Licensee was affixed on              )
_______________, 19__ in the         )
presence of:                         )
                                     )      c/s
                                     )
___________________________________  )                                     
                                     )
___________________________________  )


         (or)


SIGNED on _____________, 19__        )
by the Licensee, in the              )
presence of:                         )
                                     )
                                     )
___________________________________  )      ____________________________________
                                     )      POPE & TALBOT LTD.
___________________________________  )




                                      27.