CITY OF PARKSVILLE BYLAW NO A BYLAW TO AUTHORIZE AND APPROVE THE PARKSVILLE CIVIC AND TECHNOLOGY JOINT VENTURE AGREEMENT.

CITY OF PARKSVILLE BYLAW NO. 1317 A BYLAW TO AUTHORIZE AND APPROVE THE PARKSVILLE CIVIC AND TECHNOLOGY JOINT VENTURE AGREEMENT. PREAMBLE A. It is considered by the Council of the City of Parksville ("City") to be in the interest of the City to provide new municipal administration offices in a cost-effective manner by constructing, and sharing, office and administration premises jointly with the Board of School Trustees for School District No. 69 (Qualicum) ("Board") and Malaspina University- College ("College"); B. In order to carry out that project the City, the Board and the College wish to enter into a joint venture agreement to provide for the design, financing, construction and shared ownership and operation of premises for office, administrative and community uses; and C. The City, the Board and the College have negotiated the joint venture agreement a copy of which forms Schedule "A" to this Bylaw ("Civic and Technology Centre Joint Venture Agreement"), The Council of the City of Parksville, in open meeting assembled, enacts as follows: Authorization to Execute and Deliver Agreement 1. The Civic and Technology Centre Joint Venture Agreement is hereby approved and authorized and the Mayor and Clerk are hereby authorized and directed to execute and deliver the Civic and Technology Centre Joint Venture Agreement under seal, and upon such execution and delivery to the other parties thereto, the Civic and Technology Centre Joint Venture Agreement is a valid and binding obligation of the City. Delegation to City Manager 2. The Council of the City hereby delegates to the City Manager all of the powers, duties and functions of the City in and under the Civic and Technology Centre Joint Venture Agreement, including: the power to acquire, hold, manage or dispose of any land or improvements, and any interest or right in or with respect to such property, owned or held by the City and described in the Civic and Technology Centre Joint Venture Agreement, and any land subdivided from any such land and any improvements at any time constructed or affixed to any such land; /2

-2- (c) the power to make agreements respecting the carrying out and implementation of the joint venture, as provided in and subject to the Civic and Technology Centre Joint Venture Agreement; and the power to establish any terms and conditions the City Manager considers appropriate in exercising the powers, duties and functions delegated to the City Manager by this section. Nothing in this section delegates any power, duty or function of the City that by law may only be exercised by bylaw or that the Civic and Technology Centre Joint Venture Agreement expressly provides is to be exercised or performed by the Council of the City. 3. This bylaw may be cited for all purposes as "City of Parksville Civic and Technology Centre Joint Venture Agreement Authorization Bylaw, 1999, No. 1317". READ A FIRST TIME this 1 st day of April 1999 READ A SECOND TIME this 1 st day of April 1999 READ A THIRD TIME this 1 st day of April 1999 RECEIVED THE ASSENT OF THE ELECTORS this 15 th day of May 1999 ADOPTED BY AN AFFIRMATIVE VOTE OF AT LEAST 2/3RDS OF THE VOTES CAST BY COUNCIL this 19 th day of May 1999 Mayor Clerk

ARTICLE 1 - INTERPRETATION 1.1 Definitions 1.2 Construction PARKSVILLE CIVIC AND TECHNOLOGY CENTRE JOINT VENTURE AGREEMENT Table of Contents ARTICLE 2 - JOINT VENTURE FORMATION AND PURPOSE 2.1 Formation 2.2 Name 2.3 Purpose 2.4 Term ARTICLE 3 - JOINT VENTURE PARTIES CONTRIBUTIONS 3.1 Parksville 3.2 Qualicum School District 3.3 Malaspina University-College 3.4 Time of Sale of Lands 3.5 Deemed Contributions For Jensen Lands 3.6 Allocation of Contribution Value 3.7 Bowling Club Lands Transfer 3.8 Contributions in Kind 3.9 Lease of Existing Malaspina University-College Site ARTICLE 4 - MANAGEMENT 4.1 Project Administrative Team 4.2 Members 4.3 Changes to Membership 4.4 Authority 4.5 Monthly Report 4.6 Meetings 4.7 Observers 4.8 Quorum 4.9 Minutes 4.10 Chair ARTICLE 5 - PROJECT MANAGER 5.1 Scope of Services 5.2 Appointment 5.3 Communication and Instruction 5.4 General Contractor 1

ARTICLE 6 - LAND DEVELOPMENT 6.1 Jensen Lands 6.2 Rezoning Jensen Lands 6.3 Rezoning Application - Non Waiver of Duties 6.4 Termination For Rejection of Rezoning 6.5 Sale of Other Development Lands ARTICLE 7 - DESIGN AND DEVELOPMENT OF CIVIC AND TECHNOLOGY CENTRE 7.1 Architect 7.2 Schematic Design 7.3 Preliminary Design 7.4 Final Design 7.5 Construction Budget 7.6 Construction Budget Breakdown 7.7 Construction Budget Update 7.8 Joint Venture Parties Approval 7.9 Cost Sharing ARTICLE 8 - INTEREST IN THE CIVIC AND TECHNOLOGY CENTRE 8.1 Title to Civic and Technology Centre Lands ARTICLE 9 - PROFIT SHARING, RISK OF SHORTFALL AND BORROWING 9.1 Risk 9.2 Jensen Development Lands Profit Sharing 9.3 Contribution Shortfall 9.4 Borrowing ARTICLE 10 - PARKSVILLE DISCRETION AND AUTHORITY 10.1 Discretion 10.2 Statutory Authorities ARTICLE 11 - DISPUTES 11.1 General Dispute Resolution Procedure 11.2 Disputes Relating to Parcel Area 11.3 Disputes Relating to Determination of Land Fair Market Value ARTICLE 12- OWNERSHIP AND OPERATION OF CIVIC CENTRE 12.1 Separate Agreement ARTICLE 13. - WORKS YARD 13.1 Expanded Parksville Works Yard 2

ARTICLE 14 - GENERAL 14.1 Time 14.2 Waiver 14.3 Amendment 14.4 Not a Partnership 14.5 Governing Law 14.6 Compliance with Laws 14.7 Headings 14.8 Notices 14.9 Non Enforceability 3

PARKSVILLE CIVIC AND TECHNOLOGY CENTRE JOINT VENTURE AGREEMENT THIS AGREEMENT dated for reference the day of, 1999. AMONG: AND: AND: Whereas: CITY OF PARKSVILLE, a municipal corporation incorporated under the Municipal Act, ("Parksville") THE BOARD OF SCHOOL TRUSTEES OF SCHOOL DISTRICT NO. 69 (QUALICUM), a board of school trustees incorporated under the School Act, ("Qualicum School District ) MALASPINA UNIVERSITY-COLLEGE, a university college designated by the Lieutenant Governor in Council under the College and Institute Act, ("Malaspina University-College") A. Parksville, Qualicum School District and Malaspina University-College each wish to undertake certain capital works in accordance with their individual needs, budgets and legislative authority, and in particular: (1) Parksville wishes to construct a new municipal hall complex to house its administrative staff, a regional library, with surplus space for future public, community or other needs; (2) Qualicum School District wishes to construct new administrative offices, and to maximize its returns to its school district capital fund to provide funds for potential future school projects; and (3) Malaspina University-College wishes to construct new classroom facilities. 4

B. Parksville, Qualicum School District and Malaspina University-College have each reached the conclusion that if they undertake their projects jointly to construct a combined civic and technology centre complex, they will each achieve superior facilities, at a lower capital and operating cost. The joint project will: (1) minimize the duplication of services; (2) provide better access to government services; and (3) achieve operating savings in a jointly-owned facility with shared staff. C. Parksville, Qualicum School District and Malaspina University-College all recognize that a combined facility will be a centre for business and other activities within the downtown core of the City of Parksville, which will stimulate economic and social activity for the benefit of each of them. D. Parksville, Qualicum School District and Malaspina University-College therefore wish to enter into a joint venture agreement generally to construct a new civic and technology centre (the Civic and Technology Centre ), that will be owned jointly by Parksville, Qualicum School District and Malaspina University-College, and will be used by them for public and administrative purposes, and to enter into an ownership and operating agreement for the ownership and operation of the Civic and Technology Centre. NOW THEREFORE Parksville, Qualicum School District and Malaspina University-College severally agree as follows: ARTICLE 1. - INTERPRETATION Definitions 1.1 In this Agreement, including the schedules, except as expressly provided or as the context otherwise requires: Adjusted Jensen City Lands has the meaning as set out in article 3.5(ii). Adjusted Jensen School Lands has the meaning as set out in article 3.5(ii). Agreement means this agreement. Architect means the architectural firm identified in article 7.1. Bowling Club means the Parksville Lawn Bowling Club located on lands sub-leased from Parksville at the corner of Stanford Avenue and McCarter Street in the City of Parksville. Bowling Club Lands means the lands sublet to the Bowling Club. 5

"Chief Administrative Officer" with respect to Parksville means the City Manager, with respect to Qualicum School District means the Superintendent of Schools, and with respect to Malaspina University-College means Campus Principal (Parksville/Qualicum). City s Area Occupation has the meaning set out in article 3.5(ii). Civic and Technology Centre has the meaning set out in recital paragraph D. Civic and Technology Centre Lands means the new parcel of land, approximately 3.84 acres in size, located at the corner of Jensen Avenue and Craig Street in the City of Parksville as shown generally on Schedule 1, on which the Civic and Technology Centre will be constructed. University-College s Area Occupation means the area in the Civic and Technology Centre occupied by the Malaspina University-College s classrooms. "Construction Budget" has the meaning as set out in Article 7.5. "Dispute Note" means the notice of a dispute as set out in Article 11.1. Development Lands means the following lands to be sold, or to be developed and sold, as described in this Agreement: (c) Jensen Lands, excluding the Civic and Technology Centre Lands, and the Park Lands Existing City Hall Property School Island-Highway Property Effective Date means October 9, 1997. Existing City Hall Property means the Parksville's offices, and lands, located at 194 Memorial Avenue, Parksville, B.C., known and described as set out in Schedule 3. Existing Malaspina University-College Site means the buildings and lands, located at 223 Mills Street, Parksville, B.C., known and described as set out in Schedule 3. Fair Market Value means the amount that the lands would realize if sold in the open market by a willing seller to a willing and able buyer free and clear of this Agreement, less real estate commissions. Future Community Centre means the new community centre which has been included in the City s Area Occupation under article 3.5(ii), and which may be constructed on the Civic and Technology Centre Lands, but which will not be designed and constructed under this Agreement. 6

Future Use Space means the approximately 10,000 square foot space which will be constructed under this Agreement as part of the Civic and Technology Centre, which as of the date of this Agreement is surplus to the needs of the parties. Final Design has the meaning set out in article 7.4. Jensen City Lands means the parcel of land, approximately 7.21 acres, owned by Parksville, located adjacent to the Jensen School Lands, at the southwest corner of the intersection of Jensen Avenue and Craig Street, as shown generally on Schedule 1, known and described as set out in Schedule 3. Jensen Lands means the Jensen City Lands and the Jensen School Lands together, comprising approximately 20.21 acres, being the lands in the City of Parksville generally bounded by Jensen Avenue to the north, Craig Street to the west and Stanford Avenue to the south, as shown generally on Schedule 1. Jensen Development Lands means the portion of the Jensen Lands that will be serviced, as shown generally on Schedule 1, and sold for development as provided by this Agreement,. Jensen School Lands means the approximately 11.8 acre portion of the parcel of land, owned by Qualicum School District, located adjacent to the Jensen City Lands, excluding approximately 1.8 acres occupied by the Bowling Club, as shown generally on Schedule 1, known and described as set out in Schedule 3. Joint Venture means the joint venture between Parksville, Qualicum School District and Malaspina University-College as described in this Agreement; and Joint Venture Party or Joint Venture Parties means one or all of the parties to this Agreement as the context may require. Library means the regional library to be included in the Civic and Technology Centre as provided by this Agreement. Net Sales Revenue with respect to the sale of a parcel of land means the gross sales revenue minus all actual direct costs incurred on account of the sale, including all real estate commissions, listing costs, advertising and other related costs. Ownership and Operating Agreement means the agreement, generally in the form attached as Schedule 2, which the parties will execute to set out their mutual rights and obligations relating to the Civic and Technology Centre, including rights and obligations of ownership, use, maintenance and repair. Park means the new public park, approximately 2.69 acres, to be constructed on the Park Lands adjacent to the Civic and Technology Centre, generally as shown on Schedule 1. Park Lands means the portion of the Jensen Lands that will be occupied by the Park. 7

Parksville Works Yard means the existing Parksville works yard located at 1116 Herring Gull Way. Parksville Works Yard Lands means the lands on which the Parksville Works Yard is located. Plaza means the plaza area to be constructed on the Civic and Technology Centre Lands as part of the Civic Centre. Preliminary Design has the meaning set out in article 7.3. "Preliminary Project Budget" means the budget as provided by Article 5.1. Project means the design and construction of the Civic and Technology Centre and the Park, the development and sale of the Development Lands and all other activities as required or permitted under this Agreement. Project Administrative Team means the committee described in Article 4. Project Administrative Team Representatives are the Joint Venture Parties appointees to the Project Administrative Team as described in Article 4. Project Manager means the company or firm appointed and retained as provided by Article 5. Project Schedule means the schedule indicating the dates for significant Project events that will occur under this Agreement, including the sale of lands, the Joint Venture Parties payment of contributions to the Project, and the design and construction of the Civic and Technology Centre, as prepared and approved under article 5.1. Rezoning means the new zoning applicable to the Jensen Lands adopted by the council of the City of Parksville as described in article 6.2. Schematic Design has the meaning set out in article 7.2. School Island-Highway Property means the buildings and lands located at 499 West Island Highway, Parksville, B.C., owned by the Qualicum School District, known and described as set out in Schedule 3. School s Area Occupation has the meaning set out in article 3.5(ii). Construction 1.2 In this Agreement, except as otherwise expressly provided, or as the context otherwise requires, this Agreement means this document including the recitals and Schedules hereto, as may be amended and supplemented; 8

(c) (d) (e) (f) the headings and captions are for convenience only and do not form a part of this Agreement and will not be used to interpret, define or limit the scope, extent or intent of this Agreement or any of its provisions; the word "including" when following any general term or statement is not to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters; a reference to a statute includes every regulation made pursuant thereto, all amendments to the statute or to any such regulation in force from time to time and any statute or regulation that supplements or supersedes such statute or any such regulation; a word in the masculine form includes the feminine and the neuter, and a word in the singular includes the plural and vice versa; and a reference to approval, authorization, consent, designation, waiver or notice means expressly written approval, authorization, consent, designation, waiver or notice. ARTICLE 2. - JOINT VENTURE FORMATION AND PURPOSE Formation 2.1 Parksville, Qualicum School District and Malaspina University-College declare and confirm that a joint venture subsists between them on and after the Effective Date for the purposes and upon the terms and conditions set out in this Agreement. Name 2.2 The name of the Joint Venture is the Parksville Civic and Technology Centre Joint Venture. Purpose 2.3 The purposes of the Joint Venture are: (c) (d) to develop, design, finance and fund, and construct the Civic and Technology Centre including the Park and related servicing; and to develop and sell the Jensen Lands, excluding the Civic and Technology Centre Property and the Park Lands, to provide financing for the Civic and Technology Centre; and to sell the other Development Lands on behalf of the parties owning such lands; and to develop the Parksville Works Yard, so as to accommodate the works-yard needs of the Qualicum School District. 9

No other purpose may be undertaken by the Joint Venture except with the express written approval of all Joint Venture Parties. Term 2.4 The term of the Joint Venture began on the Effective Date and will, unless terminated earlier pursuant to the terms of this Agreement, continue until the later of the time when all obligations of the Joint Venture Parties have been met, including the Development Lands are sold as provided under this Agreement, and all warranty periods for the design and construction of the Civic and Technology Centre and Park have expired. ARTICLE 3 - JOINT VENTURE PARTIES CONTRIBUTIONS Parksville 3.1 Parksville will contribute the following to the Project, or for the benefit of the Project: (c) (d) the Jensen City Lands, to be used or sold as provided by this Agreement; plus the Net Sales Revenue from the sale of the Existing City Hall Property, to be sold as provided by this Agreement; plus $364,468 from its Parkland Reserve account, to be used as a contribution to design and construct the Park; plus pursuant to Article 3.7 the conveyance to the Qualicum School District of a onethird interest in the Parksville Works Yards Lands. Qualicum School District 3.2 Qualicum School District will contribute the following to the Project, or for the benefit of the Project: (c) the Jensen School Lands, to be used or sold as provided by this Agreement; plus the Net Sales Revenue from the sale of the School Island-Highway Property, to be used first to cover the Qualicum School District s cost contribution to the upgrade and improvement to the Parksville Works Yard as described in Article 13, with the balance to be used for other costs of the Project; plus. pursuant to Article 3.7 the conveyance of title to the lands which are under lease to the Bowling Club. Malaspina University-College 3.3 Malaspina University-College will contribute to the amount of $910,000, which it will obtain by any means it deems appropriate, including conventional borrowing secured by a mortgage on the Existing Malaspina University-College Site, or other Malaspina University- College properties. Malaspina University-College will 10

make this payment in full, payable as directed by the Project Administrative Team, on or before the date as determined by the Architect that the Civic and Technology Centre is available for use and occupancy by Malaspina University-College. Notwithstanding the above provisions of this Article 3.3, Malaspina University-College s payment obligation is subject to the condition that the Qualicum School District enters into a lease of the Existing Malaspina University-College Site as provided under Article 3.9. Time of Sale of Lands 3.4 Upon written request from the Project Administrative Team, each of Parksville and Qualicum School District will make their respective contributions as required under this Agreement, within the time limits as reasonably required by the Project Administrative Team. Where the contribution involves the sale or transfer of lands, the Joint Venture Parties will take all steps, including executing transfer and other documents, as reasonably required by the Project Administrative Team so as to give effect to the sale or transfer. Deemed Contributions For Jensen Lands 3.5 The Jensen Lands, comprised of the Jensen City Lands contributed by Parksville, and the Jensen School Lands contributed by the Qualicum School District, will be subdivided into the three parcels, the Civic and Technology Centre Lands, the Park Lands, and the Jensen Development Lands. For certainty the Jensen Development Lands may subsequently be subdivided further to facilitate their development and sale. By making the contribution of the Jensen Lands to the Joint Venture, Parksville and the Qualicum School District will, for the purposes of this Agreement, be deemed to have made contributions to the Joint Venture and to the costs of the Project valued in the amounts calculated as follows: Civic and Technology Centre Lands: (i) (ii) the value of the Civic and Technology Centre Lands will be the market value as of the date of this Agreement, based on the existing City of Parksville P1 zoning, in an amount as determined by the Project Administrative Team, or failing agreement, as determined under article 11.3; the market value of the Civic and Technology Centre Lands as determined under subparagraph (i) will be allocated between Parksville and the Qualicum School District as follows: City s Share: [City s Area Occupation] x [Market Value Lands determined under (i)] [City s plus School s Area Occupation] School s Share: [School s Area Occupation] x [Market Value Lands determined under (i) [City s plus School s Area Occupation] For the purposes of this subparagraph (ii): City s Area Occupation means the sum of the Gross Area Occupation for each of the following uses of the Civic and Technology Centre: Parksville offices, plus the Library, plus 930 square metres on account of the Future Community Centre, but does not include the area of the Future Use Space. 11

School s Area Occupation means the Gross Occupation Area for the Qualicum School District s use in the Civic and Technology Centre. University-College s Area Occupation means the Gross Occupation Area for the Malaspina University- College s use in the Civic and Technology Centre. The Civic and Technology Centre will be divided into areas as follows: (A) Exclusive Use Area is the size of an area exclusively used by a single use, such as the Parksville s offices: (B) Shared Use Area is the size of an area shared by two or more uses, but not open to all uses, such as joint Parksville and Qualicum School District office areas; (C) Common Use Area is the size of an area open for use by all uses, such as the entrance foyer. Gross Area Occupation for each use means the sum of the following areas of the Civic and Technology Centre: (A) all the Exclusive Use Areas for that use; plus (B) the pro rata share for that use of all the Shared Use Areas, calculated based on the ratio of the total of the Exclusive Use Areas for those uses that are sharing a Shared Use Area; plus (C) the pro rata share for that use of all Common-Use Areas, calculated based on the ratio of the total of the Exclusive Use Areas plus the total of the Shared Use Areas for each use. Attached as Schedule 4 is an illustration of the calculation of the City s Share and the School s Share, which is included only to illustrate the method of the calculations. Park Lands: (i) (ii) the value of the Park Lands will be the market value as of the date of this Agreement, based on the existing City of Parksville zoning applicable to the Park Lands, in an amount as determined by the Project Administrative Team, or failing agreement, as determined under article 11.3; the market value of the Park Lands as determined under subparagraph (i) will be allocated between Parksville and the Qualicum School District as follows: City s Share: [Adjusted Jensen City Lands] x [Value Lands] [Sum of Adjusted Jensen City and School lands] School s Share: [Adjusted Jensen School Lands] x [Value Lands] [Sum of Adjusted Jensen City and School lands] For the purposes of this subparagraph (ii): Adjusted Jensen City Lands means the area of the Jensen City Lands minus Parksville s Share of the area of the Civic and Technology Centre Lands; and Adjusted Jensen School Lands means the area of the Jensen School Lands (excluding the Bowling Club Lands) minus Qualicum School District s Share of the area of the Civic and Technology Centre Lands; where Parksville s Share and Qualicum School District s Share are defined as the fractions calculated under Article 3.5(ii) for the City s Share and School s Share of the market value of the Civic and Technology Centre Lands. 12

(c) Jensen Development Lands: the value of the Jensen City Lands and the Value of the Jensen School Lands which Parksville and the Qualicum School District respectively will be deemed to have contributed will be calculated as follows: Value Jensen City Lands = [Base Jensen City Lands Value] minus [City s Share fraction in Article 3.5(ii)] x [High Density Jensen Lands Value] minus Jensen Development Lands Value] Value Jensen School Lands: = [Base Jensen School Lands Value] minus [School s Share fraction in Article 3.5(ii)] x [High Density Jensen Lands Value] minus Jensen Development Lands Value] For the purposes of this subparagraph (c) the following will apply: High Density Jensen Lands Value means the market value of all the Jensen Lands as of the date of the execution of this Agreement, based on the assumption that the highest and best use included in the Rezoning applies to all of the Jensen Lands. Low Density Jensen Lands Value means the market value of all the Jensen Lands as of the date of the execution of this Agreement, based on the assumption that the least dense use for residential housing either in effect as of the date of this Agreement, or included in the Rezoning bylaw applies to all of the Jensen Lands. High Density Jensen City Lands Value means the value of the Jensen City Lands only, determined in the same manner as for the High Density Jensen Lands Value. High Density Jensen School Lands Value means the value of the Jensen School Lands only, determined in the same manner as for the High Density Jensen Lands Value. Low Density Jensen School Lands Value means the value of the Jensen School Lands only, determined in the same manner as for the Low Density Jensen Lands Value. Base Jensen City Lands Value means the value calculated as: [High Density Jensen City Lands Value] plus 0.5[(High Density Jensen School Lands Value) minus (Low Density Jensen School Lands Value)] Base Jensen School Lands Value means the value calculated as: [High Density Jensen School Lands Value] minus 0.5[(High Density Jensen School Lands Value) minus (Low Density Jensen School Lands Value)] Jensen Development Lands Value means the market value of the Jensen Development Lands as of the date of the execution of this Agreement, based on the assumption that the highest and best use included in the Rezoning applies. Determination of Areas and Pro Rata Share 3.6 In this Agreement: the calculation of an Area of Occupation, for example for illustration the City s Exclusive Use Areas, will be determined initially from the Final Design approved under article 7.4, but will be determined finally as the actual area, 13

measured after substantial completion of the Civic and Technology Centre, as certified by the Architect; the determination of the pro rata shares as called for under Article 3.5, will be as determined by the Project Administrative Team, or failing agreement, as determined under article 11.3. Bowling Club Lands Transfer 3.7 As of the date of this Agreement title to the Bowling Club Lands is owned by the Qualicum School District. These lands are leased to Parksville and sublet by Parksville to the Bowling Club. To facilitate the Project (c) the Qualicum School District will transfer title for $1.00 to the Bowling Club Lands to Parksville; Parksville will transfer a one-third interest in the Parksville Works Yard Lands to Qualicum School District; and Parksville will during the term of this Agreement, as well as the term of the Ownership and Operating Agreement, use its reasonable best efforts, within the limits of its authority, to require a developer, at no cost to Parksville or to the Qualicum School District, to contribute a site located within the boundaries of Parksville suitable for a future elementary school. Contributions in Kind 3.8 For certainty the Joint Venture Parties contributions will, as required under this Agreement, be as cash contributions, or as contributions in kind as real property or services, or in other forms. Lease of Existing Malaspina University-College Site 3.9 Qualicum School District and Malaspina University-College will enter into good faith discussions to finalize a lease agreement by which Qualicum School District will lease the Existing Malaspina University-College Site from Malaspina University-College for use by the Qualicum School District s alternate school, including a day care use, on terms that are within the authority of both parties and generally acceptable to both parties. Both Qualicum School District and Malaspina University-College agree the terms of the lease will: be for a term of at least five years, commencing at the beginning of the month following the date following substantial completion of the Civic and Technology Centre when Malaspina University-College vacates the site, with renewals for a second five years; be at a lease rate which is fixed for the entire term, at a rate which as of the date of execution of this Agreement is market (which the two parties agree will be in the range of approximately $79,000 per year); 14

(c) include a term disallowing termination, except for cause, during the first five years, and thereafter requiring at least one year notice of termination for any reason. If a party terminates without cause then liquidated damages will be payable in addition to the rent as follows: (i) (ii) if termination occurs in the sixth year an amount equal to six months rent; if termination occurs in the seventh year an amount equal to three months rent; (iii) if termination occurs in the eighth or ninth year an amount equal to 1 month rent. (d) (e) (f) the Qualicum School District will be responsible for all maintenance of the site and buildings, and all taxes, charges, rates and other charges payable such that Malaspina University-College will not incur any costs during the term relating to the site; the Qualicum School District will indemnify Malaspina University-College from any claims arising from the Qualicum School District s lease and occupation of the site; the Qualicum School District may make minor modifications to the buildings on the leased site, except that at the end of the lease the Qualicum School District will, on the request of Malaspina University-College, return the buildings to their original state, wear and tear excepted; generally include other terms normally included in commercial leases between armslength parties. ARTICLE 4 - MANAGEMENT Project Administrative Team 4.1 For the purpose of overseeing and expediting the Project, Parksville, Qualicum School District and Malaspina University-College will each appoint a single representative (the "Project Administrative Team Representative") who shall form a committee (the "Project Administrative Team") to perform the functions as set out in this Agreement. Members 4.2 As of the date of this Agreement the Joint Venture Parties Project Administrative Team Representatives are: Parksville: Qualicum School District: Malaspina University-College: Rob Roycroft John Moss Greg Spears 15

Changes to Membership 4.3 With respect to the Joint Venture Parties' Project Administrative Team Representatives: (c) (d) a Joint Venture Party may, by written notice to the other Joint Venture Parties, change its Project Administrative Team Representative, if for any reason a Joint Venture Party s Project Administrative Team Representative ceases or is unable to continue that Joint Venture Party will appoint a replacement, a Project Administrative Team Representative may, for convenience and efficiency, by written notice to the other Joint Venture Parties Project Administrative Team Representatives, delegate authority to another person, and upon written request from one Joint Venture Party, with a copy to the third Joint Venture Party, with reasons, a Joint Venture Party will change its Project Administrative Team Representative, except that in every event the replacement will be reasonably acceptable to both the other Joint Venture Parties. Authority 4.4 The Project Administrative Team will have the authority and responsibility generally to undertake the Project, on behalf of the Joint Venture Parties, subject to the terms and conditions of this Agreement, as follows: the Project Administrative Team will, in all respects, act on behalf of the Joint Venture Parties, as provided by this Agreement, and to the extent permitted by law, it being the intention of the Joint Venture Parties that all input and approvals to be exercised by each Joint Venture Party will be exercised through their respective Project Administrative Team Representative; the authority of the Project Administrative Team will be exercised jointly by the Project Administrative Team Representatives and all decisions of the Project Administrative Team require the approval of all three Joint Venture Parties Project Administrative Team Representatives, except that: (i) (ii) with respect to sale of any of the Jensen Lands, only the Project Administrative Team Representatives of both Parksville and Qualicum School District must agree; and with respect to the other Development Lands, only the Project Administrative Team Representative of the party that owns such lands must agree; 16

but with respect to the design, development and construction of the Civic and Technology Centre, the Project Administrative Team Representatives of all three Joint Venture Parties must agree. In each instance the above agreement may be given by a substitute representative(s) with written delegated authority from the related Project Administrative Team Representative; (c) (d) (e) (f) (g) the Project Administrative Team may at any time, as the Project Administrative Team Representatives determine is required, obtain or call for the assistance of one of the Joint Venture Parties, or engage one of the Joint Venture Parties to undertake defined tasks or provide services for the benefit of the Project; the Project Administrative Team will, with the assistance of the Project Manager, manage the Project, so that it generally complies with the Project Schedule, and if at any time a date in the Project Schedule is not met, or it appears to the Project Administrative Team that a date will not be met, then the Project Administrative Team will either adjust the activities so that the Project is brought back within the Project Schedule, or direct the Project Manger to prepare an amended Project Schedule; the Project Administrative Team will, with the assistance of the Project Manager, manage the Project so that it does not exceed the total Preliminary Project Budgets, or the Construction Budget, and if there is an anticipated cost overrun of any of the items in the breakdown of these budgets then the Project Administrative Team will either obtain approval from the Parksville council and the boards of Qualicum School District and Malaspina University-College for an increase in the budget(s) as necessary so as to cover the overrun, or take such steps as may be required with other items (including cost-down measures) to keep the cost of the Project within these Budgets; the Project Administrative Team has the authority to make expenditures, and to enter into contracts including contracts with consultants and contractors, on behalf of the Joint Venture Parties, without further approval from any of the Joint Venture Parties, provided that any such expenditure or contract is within the budget breakdown amounts as set out in the Preliminary Project Budget or Construction Budget, as may be revised and approved by the Parksville council and the boards of Qualicum School District and Malaspina University-College as provided by this Agreement, and each of the Joint Venture Parties by approving and entering into this Agreement, is deemed to have delegated such authority to the Project Administrative Team as necessary to give effect to this Article; with the exception of article 5.4 and with the exception of the appointment of the Architect, contracts estimated by the Project Manager to be in the amount of $50,000.00 or more shall be awarded only by public tender, although the Project Administrative Team may decide that a given contract shall be open only to prequalified bidders; 17

(h) (i) (j) contracts estimated by the Project Manager to be in the amount of less than $50,000.00 are not required to be awarded by tender, but will be awarded in accordance with prudent and accepted purchasing procedures designed to encourage fair and competitive pricing; the Project Administrative Team will award contracts with the assistance of the Project Manager; in the award of all contracts, while regard will be given to the need for specialist knowledge or expertise, preference will be given, as reasonably appropriate, and providing the prices are competitive, to contractors and suppliers that are located and established generally within the Parksville region. Monthly Report 4.5 The Project Administrative Team will submit a monthly report to the Chief Administrative Officers of each Joint Venture Party setting out a complete financial description of the Project to that date, including: (c) (d) (e) (f) (g) (h) the total costs of the Project to such date; the total costs of the Project paid as of such date; the total costs of the Project incurred in the previous calendar month; the total amount owing on the Project as of such date; each Joint Venture Party s total share of costs in accordance with the cost sharing percentages provided by article 7.9 of this Agreement; the estimated percent complete and the estimated total cost at completion for each of the Budget breakdown items in the Preliminary Project Budget, and the approved Construction Budget; any actual, projected or suspected Budget breakdown item overruns, with reasons for the overrun, together with the proposed adjustments so as to keep the Project within Budget; any actual or anticipated delays from items on the Project Schedule, with reasons, recommended action proposed, and the anticipated date of substantial completion. Meetings 4.6 The Project Administrative Team will meet, in person or by telephone conference call, as the Project Administrative Team may decide but in any event will so meet: 18

(c) no less than twice per month beginning with the execution of this Agreement until substantial completion of the Civic and Technology Centre, or at any time on the written request, delivered by hand or fax, by any of the Project Administrative Team Representatives, or at the request of the Project Manger. The Project Administrative Team may invite the Project Manager to attend any meeting of the Project Administrative Team, to provide information, and to receive instructions, but the Project Manager will not have a vote on any issue. Observers 4.7 Each Joint Venture Party may at any time, at its own discretion, send additional non-voting representatives to attend any meeting of the Project Administrative Team, except that such additional representatives may not vote and will attend only to provide or obtain information, or to observe. Minutes 4.8 The Project Administrative Team Representatives will keep minutes of the decisions of the Project Administrative Team. Chair 4.9 The first chair of the Project Administrative Team will be Parksville s Project Administrative Team Representative, who will have that position for 1 year after the date of execution of this Agreement, and thereafter the Project Administrative Team will decide on a chair, and the chair may be rotated to distribute the work load. ARTICLE 5 - PROJECT MANAGER Scope of Services 5.1 The Joint Venture Parties will undertake the Project on a project management basis through the appointment of a project manager (the "Project Manager") who will be engaged to assist and provide professional services throughout all phases of the Project, including: engage consultants: selecting and engaging on behalf of the Joint Venture Parties all design professionals and other consultants required; budget and schedule control: preparing overall budgets and cost-control procedures, and preparing the Project Schedule, all for the approval of the Project Administrative Team. The Project Manager will prepare and update a Preliminary Project Budget which will set out the costs (initially estimated costs) of all aspects of the Project; 19

(c) land sales: if requested by the Project Administrative Team administering the sale of all Development Lands to be sold under this Agreement, on behalf of the Joint Venture Party owning the land; (d) design: administering the design of the Civic and Technology Centre and the Park, including obtaining all permits and approvals as required from authorities having jurisdiction; and coordinating input and approvals from each of the Joint Venture Partners; (e) construction: providing services during the construction of the Civic and Technology Centre and the construction of the Park, and if requested by Project Administrative Team providing services during the construction of the servicing of the Jensen Lands; including: (i) (ii) dividing the construction into work packages, preparing (or coordinating the preparation of) tender documents including specifications and drawings, and recommending the successful contractors; performing "construction management" services, which will include management and administration of contracts which the Joint Venture Parties will enter into directly with contractors and others for the construction of the Project; Appointment 5.2 The Joint Venture Parties confirm and ratify the appointment of Ledcor Industries ( Ledcor ) as the Project Manager, on the condition that Mr. Carl Stewart P. Eng., Vice President, remains the principal contact with the Joint Venture on behalf of Ledcor and personally involved with the provision of the Project Manager services. Communication and Instruction 5.3 All instruction and information to the Project Manager from any or all of the Joint Venture Parties will be through, or under the direction of, the Project Administrative Team. General Contractor 5.4 The Joint Venture Parties will give consideration to engaging Ledcor, under the supervision of Mr. Carl Stewart, under a separate agreement, to undertake the construction of the Civic and Technology Centre as a general contractor, entering into contracts directly with subcontractors for various aspects of the construction of the Civic and Technology Centre. In such an agreement Ledcor would undertake the work in the manner of a construction manager, such that, for example, the Project Administrative Team would receive full monthly reports on cost and the progress of the work, and the Project Administrative Team would select the major subcontractors. 20

ARTICLE 6 - LAND DEVELOPMENT Jensen Lands 6.1 By entering into this Agreement Parksville and Qualicum School District agree that the Jensen City Lands and the Jensen School Lands, excluding the Bowling Club Lands, and excluding the Civic and Technology Centre Property, will be developed (including, as the Project Administrative Team may decide, on and off site servicing)and sold as permitted under the applicable zoning, in such a manner as to generate the maximum Net Sales Revenue, and each of Parksville and the Qualicum School District will take all steps within their authorities to achieve this objective. Rezoning Jensen Lands 6.2 This Agreement is conditional on the council of Parksville adopting zoning bylaws (the Rezoning ) to rezone the Jensen Lands on or before January 1, 2000, to permit: (c) the use of the Civic and Technology Centre Property for the Civic and Technology Centre, including the Library and other uses contemplated by this Agreement; the use of a portion of the Jensen Lands for the Park, in the location shown generally in Schedule 1; the use of the Jensen Development Lands for residential housing, in the densities as shown generally on Schedule 1, or for other uses as acceptable to all three of the Joint Venture Parties. The foregoing is a condition that may not be waived without the express written agreement of all Joint Venture Parties. Rezoning Application - Non Waiver of Duties 6.3 Parksville and Qualicum School District will, within the extent of their respective authority, cooperate to bring an application for the Rezoning in a timely manner. However, nothing in this Agreement will be interpreted as constituting a waiver of any of Parksville s duties or obligations imposed by law, including the British Columbia Municipal Act or other applicable legislation, or Qualicum School District s duties or obligations imposed by law, including the British Columbia School Act or other applicable legislation. Termination For Rejection of Rezoning 6.4 If at any time the Parksville council rejects the application to rezone the Jensen Lands, or if the Rezoning is not adopted by January 1, 2000, then any of the Joint Venture Parties may, upon 90 days written notice delivered to the other Joint Venture Parties, terminate this Agreement. If this Agreement is terminated under this article then: the Project Administrative Team will take all steps to wind down all Project activities in a cost-effective manner; 21

(c) the Project Administrative Team will prepare a final report on all aspects of the Project, including the total costs of the Project; and the total costs of the Project will be borne by the Joint Venture Parties as follows: (i) (ii) Parksville and the Qualicum School District will each bear the costs, if any, relating to the offering for sale, or the actual sale, of their own Development Lands properties; Parksville and Qualicum School District will bear the direct costs relating to the Rezoning, shared: City s share: [Value Jensen City Lands] x [Rezoning Costs] [Value Jensen City +Jensen School Lands] School s share: [Value Jensen School Lands] x [Rezoning Costs] [Value Jensen City +Jensen School Lands] where Value Jensen City Lands and Value Jensen School Lands is as calculated under article 3.5(c). (iii) (iv) Parksville will bear the direct costs relating to the Future Community Centre and to the Future Use Space; the Joint Venture Parties will share all other costs incurred on account of the Project as follows: City s share: [City s Area Occupation] x [General Project Costs] [City s + School s + University-College s Area Occupation] School s share: [School s Area Occupation] x [General Project Costs] [City s + School s + University-College s Area Occupation] University-College s share: [University-College s Area Occupation] x [General Project Costs] [City s + School s + University-College s Area Occupation] where City s Area Occupation, School s Area Occupation and University-College s Area Occupation are as calculated under article 3.5(ii). Sale of Other Development Lands 6.5 The Joint Venture Parties each will, in general accordance with a development schedule as approved by the Project Administrative Team, and as required to provide funds for the design and construction of the Civic and Technology Centre and the Park, take all steps as are necessary in order to permit the sale of the Existing City Hall building and lands, the School Island- Highway Property, and the Existing Malaspina University-College Site, in such a manner as to maximize the Net Sales Revenue, except that no sale will be required before the adoption of the Rezoning. 22

ARTICLE 7 - DESIGN AND DEVELOPMENT OF CIVIC CENTRE Architect 7.1 The Joint Venture Parties have entered into an agreement with Henriquez & Partners (the Architect ) for architectural services for the design of the Civic and Technology Centre. Schematic Design 7.2 The Architect's scope of services in the architect s agreement will include the preparation of up to three alternate approaches to the design of the Civic and Technology Centre (including conceptual design of the exterior, site plan, preliminary exterior elevations and basic models) and the Project Administrative Team shall present to the council and boards of the Joint Venture Parties the schematic design which the Project Administrative Team, with the assistance of the Project Manager, recommends, and obtain the council s and the boards respective approval of a schematic design (the "Schematic Design"). Preliminary Design 7.3 The Architect's agreement shall provide that following the approval of the Schematic Design as provided by article 7.2, the Architect shall prepare a revised design (the "Preliminary Design") consisting of but not limited to design development drawings, outline specifications and system descriptions, and materials, all of which will be able to be constructed and installed within the Preliminary Budget and the Preliminary Construction Schedule. The Preliminary Design shall be to the approval of the Project Administrative Team. Final Design 7.4 Following the approvals as provided by articles 7.2 and 7.3, the Architect will be directed to prepare a final design for the Civic and Technology Centre and Park (the "Final Design") and the Project Administrative Team shall, with the assistance of the Project Manager, recommend a final design for the Civic and Technology Centre and present such design for approval to the council and boards of the Joint Venture Parties. Construction Budget 7.5 The Project Administrative Team shall, based on the Final Design of the Project selected by the Project Administrative Team, prior to the submission to the council and boards of the Joint Venture Parties as provided by article 7.4, obtain from the Project Manager a detailed budget (the "Construction Budget") which summarizes all costs of the design and construction of the Civic and Technology Centre and the Park. Construction Budget Breakdown 7.6 The Construction Budget shall be broken down into cost and activity items, such as the cost of the professional services including the Project Manager, the Architect, and other design professionals, the cost of the planned work packages, servicing and all other costs of the Civic and Technology Centre and the Park to a level of detail satisfactory to the Project Administrative Team. 23