6-K 1 o13390e6vk.txt MATERIAL CHANGE REPORT AND NEWS RELEASES OMB APPROVAL OMB Number: 3235-0116 Expires: August 31, 2005 Estimated average burden hours per response......6.20 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of June 11 and June 14, 2004. Commission File Number 033-74656 DOMAN INDUSTRIES LIMITED -------------------------------------------------------------------------------- (Translation of registrant's name into English) 3rd Floor, 435 Trunk Road, Duncan, British Columbia Canada V9L 2P9 -------------------------------------------------------------------------------- (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____ NOTE: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____ NOTE: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-____________. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DOMAN INDUSTRIES LIMITED ------------------------------ (Registrant) Date June 14, 2004 By /s/ P.G. Hosier --------------------------- (Signature)* Philip G. Hosier Vice President, Finance ------------------- * Print the name and title under the signature of the signing officer. PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION SEC 1815 (11-02) CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. DOMAN INDUSTRIES LIMITED 435 TRUNK ROAD [DOMAN INDUSTRIES LIMITED LOGO] Duncan, BRITISH Columbia Canada V9L 2P9 Telephone: (250) 748-3711 FACSIMILE: (250) 748-6045 N E W S R E L E A S E DOMAN INDUSTRIES LIMITED FOR IMMEDIATE RELEASE June 11, 2004 - Duncan, British Columbia. Doman Industries Limited ("Doman" or the "Company") announces that in connection with proceedings under the Companies' Creditors Arrangement Act ("CCAA"), the Supreme Court of British Columbia has today issued an order sanctioning the Plan of Compromise and Arrangement (the "Plan"). A copy of the court order and Plan may be obtained by accessing the Company's website at . It is anticipated that implementation of the Plan will occur on or about July 26, 2004. To accommodate the implementation of the Plan the stay has been extended to July 31, 2004. About Doman: Doman is an integrated Canadian forest products company and the second largest coastal woodland operator in British Columbia. Principal activities include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, value-added remanufacturing and producing NBSK pulp. All the Company's operations, employees and corporate facilities are located in the coastal region of British Columbia and its products are sold in 30 countries worldwide. This press release contains statements that are forward-looking in nature. Such statements involve known and unknown risks and uncertainties that may cause the actual results of the Company to be materially different from those expressed or implied by those forward-looking statements. Such risks and uncertainties include, among others: general economic and business conditions, product selling prices, raw material and operating costs, changes in foreign-currency exchange rates and other factors referenced herein and in the Company's annual information form and annual report. ~~FOR FURTHER INFORMATION CONTACT: RICK DOMAN 250 748 3711 P.G. HOSIER 604 665 6231.~~

DOMAN INDUSTRIES LIMITED FORM 51-102F3 MATERIAL CHANGE REPORT ITEM 1. NAME AND ADDRESS OF COMPANY Doman Industries Limited ("Doman" or the "Company") 3rd Floor, 435 Trunk Road Duncan, British Columbia V9L 2P9 ITEM 2. DATE OF MATERIAL CHANGE June 4, 2004 in respect of the announcement of the new proposed director of Lumberco. June 7, 2004 in respect of the outcome of the affected creditors meeting. June 11, 2004 in respect of the sanction order issued by the Court. ITEM 3. NEWS RELEASE The news release dated June 4, 2004 in respect of the announcement of the new proposed director of Lumberco was disseminated in Vancouver via Canada Newswire on June 4, 2004. The news release dated June 7, 2004 in respect of the outcome of the affected creditors meeting was disseminated in Vancouver via Canada Newswire on June 7, 2004. The news release dated June 11, 2004 in respect of the sanction order issued by the Court was disseminated in Vancouver via Canada Newswire on June 11, 2004. ITEM 4. SUMMARY OF MATERIAL CHANGE Doman announced on June 4, 2004 that in connection with proceedings under the Companies' Creditors Arrangement Act ("CCAA") and the Plan of Compromise and Arrangement (the "Plan"), that Mr. Lee Doney has been nominated to serve as a Director of Lumberco, the newly incorporated company which will acquire all of the existing lumber assets of Doman under the Plan. Doman announced on June 7, 2004 that in connection with proceedings under the CCAA and the meeting of affected creditors held on June 7, 2004 to consider the Plan, the affected creditors have overwhelmingly voted to approve the Plan. Doman announced on June 11, 2004 that the Supreme Court of British Columbia issued an order in connection with proceedings under the CCAA sanctioning the Plan. -2- ITEM 5. FULL DESCRIPTION OF MATERIAL CHANGE Proposed Director of Lumberco Doman announced on June 4, 2004 that in connection with proceedings under the CCAA and the Plan, that Mr. Lee Doney has been nominated to serve as a Director of Lumberco, the newly incorporated company which will acquire all of the existing lumber assets of Doman under the Plan. Mr. Doney will join the other seven directors who have already been nominated. Lee Doney was Deputy Minister of Skills and Development and Labour for the Provincial Government of British Columbia from June, 2001 until his retirement in April 2004. Born in Duncan, British Columbia, he was a Deputy Minister in the B.C. Government for over 15 years and served in a number of other posts. He brings a wealth of experience from his career in government service including previous responsibilities as Deputy Minister of Forests; Chief Executive Officer of Forest Renewal BC; Interim Chair, Industry Training and Apprenticeship Commission; Chief Executive Officer of the British Columbia Labour Force Development Board; Chairman of the Workers Compensation Board of Governors; Executive Director to the Provincial Round Table on the Environment and the Economy; and, Executive Director for the BC Treaty Commission. In addition, the Company announces that it has made certain technical amendments to the Plan that it intends to present to affected creditors at the meeting held to approve the Plan. The technical amendments relate to the disposition of the Port Alice pulp mill. They also amend the definitions of Restricted Group and Standby Purchasers. Blackline pages of the Plan showing the technical amendments made to the Plan are attached hereto as Schedule A. The meeting of affected creditors to approve the Plan will be held on June 7, 2004. The Company also announces that KPMG Inc., the Monitor appointed by the Supreme Court of British Columbia under the CCAA has filed with the Court its 22nd report dated June 2, 2004. The Monitor's report, a copy of which may be obtained by accessing the Company's website or the Monitor's website , contains selected unaudited financial information and information in connection with the meeting of affected creditors. Affected Creditors Meeting Doman announced on June 7, 2004 that in connection with proceedings under the CCAA and the meeting of affected creditors held on June 7, 2004 to consider the Plan, the affected creditors have overwhelmingly voted to approve the Plan. KPMG Inc., the Monitor, has confirmed that approximately 97.75% of the number of affected creditors that voted at the meeting, holding approximately 99.98% of the total value of the claims, voted to approve the Plan. A copy of the Plan may be obtained by accessing the Company's website at . The Plan that was approved contained some additional minor technical amendments to the Plan that were presented to affected creditors at the meeting. Blackline pages of the Plan showing the additional technical amendments made to the Plan are attached hereto as Schedule A. -3- Sanction Order Doman announced on June 11, 2004 that in connection with proceedings under the CCAA, the Supreme Court of British Columbia issued an order sanctioning the Plan. A copy of the Plan may be obtained by accessing the Company's website at . A copy of the court order is attached hereto as Schedule B. It is anticipated that implementation of the Plan will occur on or about July 26, 2004. To accommodate the implementation of the Plan the stay has been extended to July 31, 2004. This document contains statements that are forward-looking in nature. Such statements involve known and unknown risks and uncertainties that may cause the actual results of the Company to be materially different from those expressed or implied by those forward-looking statements. Such risks and uncertainties include, among others: general economic and business conditions, product selling prices, raw material and operating costs, changes in foreign-currency exchange rates and other factors referenced herein and in the Company's annual information form and annual report. ITEM 6. RELIANCE ON 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102 Not applicable. ITEM 7. OMITTED INFORMATION Not applicable. ITEM 8. EXECUTIVE OFFICER The following executive officer of the Company is knowledgeable about the material change and may be contacted respecting the change: Philip G. Hosier, Vice President, Finance (604) 665-6200 ITEM 9. DATE OF REPORT June 10, 2004. DOMAN INDUSTRIES LIMITED By: "P.G. HOSIER" ------------------------------- Name: Philip G. Hosier Title: Vice President, Finance -4- Schedule "A" -6- "INTERCOMPANY CLAIM" means a Claim of any of the Doman Entities against any one or more of the other Doman Entities in relation to inter-corporate advances or any other obligation. "LUMBERCO" means a corporation to be formed pursuant to the CBCA for the purpose of holding the Lumber Assets and Pulpco Shares. "LUMBER ASSETS" means all of the businesses and assets of the Doman Entities other than the Pulp Assets [and the Port Alice Assets,] [the previous bracketed text has been inserted] including without limitation: all forest licences; all tree farm licences; all timber licences; all logging camps; all log sorting yards; all logging equipment; trucks and other vehicles; all lumber and timber harvesting and processing facilities and sawmills and equipment related thereto; all lumber and timber inventories and work in progress; and all working capital related thereto. "LUMBER COMPANIES" means the Doman Entities (other than the Pulp Companies) to the extent that they hold Lumber Assets. "LUMBERCO SECURED BONDS" means the secured bonds to be issued by Lumberco pursuant to the Private Placement, the exercise of the Warrants and the Standby Commitment, which bonds will have the attributes set out in the Lumberco Secured Bonds Term Sheet. "LUMBERCO SECURED BONDS TERM SHEET" means the term sheet summarizing the principal terms and conditions applicable to the Lumberco Secured Bonds, a copy of which is attached to this Plan as Schedule "A". "LUMBERCO SHARES" means the common shares of Lumberco to be distributed pursuant to this Plan. "MEETING" means the meeting of the Affected Creditors to be called pursuant to the CCAA for the purpose of considering and voting in respect of this Plan. "MEETING DATE" means the date on which the Meeting shall be held pursuant to the Meeting Order. "MEETING ORDER" means the Order of the Court dated April 30, 2004 calling the Meeting to consider and vote on the Plan and setting out, inter alia, the voting process for Affected Creditors. "MLIM FUNDS" means Merrill Lynch Bond Fund, Inc. - High Income Portfolio, Merrill Lynch Variable Series Fund, Inc. - Merrill Lynch High Current Income Fund, Merrill Lynch Series Funds, Inc. - High Yield Portfolio, Corporate High Yield Fund, Inc., Corporate High Yield Fund III, Inc., Master U.S. High Yield Trust, Merrill Lynch World Income Fund, Inc. and Corporate High Yield Fund V, Inc. being, mutual funds which hold Unsecured Notes. "MLIM PRIVATE PLACEMENT PURCHASERS" means Debt Strategies Fund, Inc., Merrill Lynch Global Investment Series - Income Strategies Portfolio, Merrill Lynch Bond -7- Fund, Inc. - High Income Portfolio, Master U.S. High Yield Trust, Corporate High Yield Fund, Inc., [Merrill Lynch World Income Fund, Inc.,] [the previous bracketed text has been inserted] Corporate High Yield Fund V, Inc, Corporate High Yield Fund VI, Inc. and Floating Rate Income Strategies Fund, Inc. "MONITOR" means KPMG Inc., in its capacity as court-appointed Monitor pursuant to the Initial Order, and any successor thereof. "New CLAIMS BAR DATE" means May 25, 2004, or such later date as the Court may set. "ORDER" means any order of the Court in the CCAA Proceedings. "PERSONS" includes each and every person, firm, partnership, association, organization, corporation, trust, fund or entity wherever situate or domiciled and any Governmental Authority in Canada, the United States or elsewhere. "PLAN" means this Plan of Compromise and Arrangement filed by the Doman Entities under the CCAA and Reorganization pursuant to section 191 of the CBCA, as such Plan may be amended, varied or supplemented by the Doman Entities from time to time in accordance with the terms hereof. "PLAN FILING DATE" means the date on which this Plan is filed with the Court in the CCAA Proceedings. "PLAN IMPLEMENTATION DATE" means a Business Day on which the Monitor has filed with the Court a certificate pursuant to SECTION 8.5 stating that all conditions precedent to implementation of this Plan set forth in SECTION 8.4 have been satisfied or waived, which will not be earlier than July 1, 2004 or later than July 31, 2004 unless otherwise ordered by the Court and not objected to by the Restricted Group. "PORT ALICE ASSETS" means [all of the real property, plant and fixtures used in or connected with the operation of the Port Alice Mill] [the previous bracketed text has been deleted] [(i) all assets sold or transferred pursuant to an agreement of purchase and sale with respect to the operations at the Port Alice Mill as approved by the Court and not objected to by the Restricted Group, and (ii) any property, plant and fixtures] [the previous bracketed text has been inserted] (but for greater certainty [does not include] [the previous bracketed text has been deleted] [excluding] [the previous bracketed text has been inserted] working capital, moveable equipment, work in progress or merchantable inventory) [used in or connected with the operation of the Port Alice Mill remaining after any such sale.] [the previous bracketed text has been inserted] "PORT ALICE MILL" means the pulp production facility located at Port Alice, British Columbia and [currently owned] [the previous bracketed text has been deleted] [formerly operated] [the previous bracketed text has been inserted] by WPI and WPLP. "POST FILING CLAIM" means any Claim of any Person against the Doman Entities, whether or not asserted, in connection with any indebtedness, liability or obligation of any kind of the Doman Entities with respect to any matter, action, cause or chose in action arising from or caused by any action taken by the Doman Entities from and after the Filing Date, but excluding any right or claims arising from the termination or repudiation (whether by way of express action on the part of the Doman Entities or pursuant to orders of the Court) of any executory agreements or obligations in existence as at the Filing Date and terminated or repudiated on or prior to May 14, 2004, and -9- "PULPCO SHARES" means the outstanding common shares of Pulpco, as at the Plan Implementation Date or any prior time. "QUADRANGLE" means [Quadrangle Group LLC] [the previous bracketed text has been deleted] [collectively QDRF Master Ltd., Quadrangle Debt Opportunities Fund L.P. and Quadrangle Debt Recovery Income Fund L.P.] [the previous bracketed text has been inserted] "RELATED" with respect to any two or more Persons means: (1) a parent, subsidiary or an affiliate of a corporation or two or more corporations that are affiliates of one another; (2) a Person or group of Persons that controls or is controlled by another Person or group of Persons; (3) the partners of a partnership or a limited partnership; (4) mutual funds or investment funds managed or administered by the same Person or group of Persons; or (5) a trustee and a beneficiary of any trust or Persons who are beneficiaries of the same trust. "RELATED GROUP" means a group of Persons, each member of which is Related to every other member of the group. ["RESTRICTED GROUP" means the informal group of noteholders (comprised of certain Unsecured Noteholders and Tricap, who have executed confidentiality agreements with DIL that have not expired) established to help negotiate the terms of a financial and corporate restructuring with the Doman Entities.] [the previous bracketed text has been deleted] ["RESTRICTED GROUP" means Tricap, MLIM Private Placement Purchasers, Quadrangle and Amaranth.] [the previous bracketed text has been inserted] "REVISED CLAIMS PROCESS ORDER" means the Order of the Court made on April 6, 2004, which amends and supercedes the Order of the Court made on February 21, 2003 in the CCAA Proceedings, and which confirms the procedure for determining the Claims of Affected Creditors. "SANCTION ORDER" means the Order proposed to be made in the CCAA Proceedings, among other things, to sanction this Plan and direct the completion of certain related corporate and financing transactions, as such Order may be amended, varied or modified by the Court from time to time. "SECURED CLAIMS" means all Claims of Creditors that are secured by a security interest validly charging or encumbering assets of any of the Doman Entities (including Claims of Equipment Lessors in respect of equipment leases which create security interests) but excluding any Claims which may be secured by the Administrative Charge or the Directors' Charge pursuant to the Initial Order. "SECURED CREDITOR" means any Creditor holding a Secured Claim with respect to, and to the extent of such Secured Claim, and includes the Secured Noteholders, Equipment Lessors and the Working Capital Lender with respect to and to the extent of their Secured Claims. "SECURED NOTEHOLDERS" means, collectively, the holders of the Secured Notes. -17- (c) In the event that any holder of Existing Doman Equity including, without restriction, an Existing Doman Shareholder takes any action to challenge, delay or otherwise hinder the sanctioning of this Plan by the Court and: (i) the Order contemplated in subparagraph 3.5(b) has not been made by the Court prior to the Meeting Date; or (ii) in the event that said Order has been made and appealed from, such appeal has not been finally dismissed by June 10, 2004; Lumberco will not issue the Class C Warrants to the Existing Doman Shareholders and the Class C Warrants shall be cancelled. Existing Doman Shareholders who are U.S. residents will not be entitled to receive Class C Warrants unless they provide Lumberco evidence satisfactory to Lumberco that they are "accredited investors" and that they are eligible to receive and exercise Class C Warrants without registration under the U.S. Securities Act or applicable state law. 3.6 LUMBERCO BOARD OF DIRECTORS The board of directors of Lumberco will initially consist of the following eight members, one of which will be the Chief Executive Officer of Lumberco: James D. Arthurs Derek Brown Rick Doman Peter Gordon John Lacey John McIntyre John Newman [one director to be named before the Meeting by the Restricted Group and communicated by Doman by press release] [the previous bracketed text has been deleted] [Lee Doney] [the previous bracketed text has been inserted] The initial board of directors of Lumberco (including its Chair) will hold office until the close of the first annual meeting of the shareholders of Lumberco following the Plan Implementation Date. Not less than 25% of the members of the board of directors of Lumberco will be resident Canadians, in accordance with the CBCA. One or more of the above individuals may be substituted for on or before the Meeting Date with another individual or individuals acceptable to the Restricted Group. 3.7 PULPCO BOARD OF DIRECTORS The board of directors of Pulpco shall be constituted on or before the Plan Implementation Date in consultation with the proposed board of directors of Lumberco. Not less than 25% of the members of the board of directors of Pulpco will be resident Canadians. -2- other than Transferred Obligations). DFPL uses the cash proceeds to pay down the DFPL debt acquired by Lumberco from DIL. Once again, this will leave Lumberco with cash of US $210 million. 8. Lumberco acquires all of the property and assets of WPLP, WPI and WFPL other than the Squamish pulp mill, the Port Alice Assets, and the interests held by WPI and WFPL in WPLP. Acquired property and assets will include, among other things, all solid wood assets, the benefit of all litigation pertaining to timber tenures and other forms of fiber supply, and all merchantable inventory, working capital and tangible personal property owned by WPLP, WPI and WFPL, for cash equal to the fair market value of the transferred assets. WPLP uses the cash proceeds to pay down the debt owed by WPLP to DFPL. DFPL uses the cash proceeds to pay the Retained DFPL Debt. The intended result after the completion of steps 6 through 8 is that DFPL will have paid down the DFPL debt held by Lumberco in an amount equal to the fair market value of the assets acquired by Lumberco from DFPL and WPLP, less the amount of the Retained DFPL Debt, and will have cash equal to the Retained DFPL Debt. DFPL then pays the Retained DFPL Debt and DIL uses the cash received to retire the Secured Notes and pay the DIL exit costs. 9. All of the Doman Entities transfer to Lumberco their respective interests in any other property and assets not otherwise dealt with in this Schedule (free and clear of claims of their creditors, other than Transferred Obligations) for nominal consideration. 10. DIL incorporates a wholly-owned subsidiary ("New GP"). WPI and WFPL assign their 0.05% general partner interests in WPLP to New GP. WPI also assigns to New GP its legal interest in [all] [the previous bracketed text has been deleted] the Port Alice Assets [not sold or transferred pursuant to an agreement of purchase and sale, as approved by the Court.] [the previous bracketed text has been inserted] 11. The shares of all subsidiaries of DFPL are transferred by DFPL to DIL for nominal consideration. 12. DIL transfers the common shares of DFPL to Lumberco for nominal consideration. 13. DIL pays out the Secured Notes and funds its exit costs. 14. DIL distributes the Lumberco Shares to the Affected Creditors in accordance with the Plan. 15. The preferred shares of DFPL held by WFPL will be cancelled for no consideration and the preferred shares of WFPL held by DFPL will be cancelled for no consideration. -5- Schedule "B" No. L023489 Vancouver Registry IN THE SUPREME COURT OF BRITISH COLUMBIA IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT R.S.C. 1985, c. C-36 AND IN THE MATTER OF THE COMPANY ACT R.S.B.C. 1996, c. 62 AND IN THE MATTER OF THE CANADA BUSINESS CORPORATIONS ACT R.S.C. 1985, c. C-44 AND IN THE MATTER OF THE PARTNERSHIP ACT R.S.B.C. 1996, c. 348 AND IN THE MATTER OF DOMAN INDUSTRIES LIMITED, ALPINE PROJECTS LIMITED, DIAMOND LUMBER SALES LIMITED, DOMAN FOREST PRODUCTS LIMITED, DOMAN'S FREIGHTWAYS LTD., DOMAN HOLDINGS LIMITED, DOMAN INVESTMENTS LIMITED, DOMAN LOG SUPPLY LTD., DOMAN - WESTERN LUMBER LTD., EACOM TIMBER SALES LTD., WESTERN FOREST PRODUCTS LIMITED, WESTERN PULP INC., WESTERN PULP LIMITED PARTNERSHIP, and QUATSINO NAVIGATION COMPANY LIMITED PETITIONERS SANCTION ORDER BEFORE THE HONOURABLE ) FRIDAY THE 11th DAY ) MR JUSTICE TYSOE ) OF JUNE, 2004 UPON THE APPLICATION of the Petitioners coming on for hearing at Vancouver, British Columbia on this date; AND ON HEARING Michael A. Fitch, Q.C. of counsel for the Petitioners and those other counsel listed in Schedule "A" to this Order; AND UPON READING Affidavit #23 of Phil Hosier and Affidavit #1 of Peter Gibson, both sworn on June 8, 2004 and filed, Affidavit #1 of Joseph Lumsdon sworn June 1, 2004 and filed, Affidavit #1 of Tanya Enkelman sworn May 28, 2004 and filed, Affidavit #1 of Robert Muir sworn June 2, 2004 and filed, Affidavit #1 of Louise Prince sworn June 1, 2004 and filed, Affidavit #2 of Kibben Jackson affirmed May 28, 2004 and filed, Affidavit #1 of Anthony Tillman sworn June 8, 2004 and filed, Affidavit #3 of Herb Gill sworn June 7, 2004 and filed, Affidavit #4 of Daune Johns sworn May 20, 2004 and filed, Affidavit #1 of Alison Oxtoby sworn June 11, 2004 and 2 filed and Affidavit #1 of Georald Ingborg sworn on June 8, 2004 and filed; AND pursuant to the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the "CCAA"), the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the "CBCA"), the Company Act, R.S.B.C. 1996, c. 62 (the "BCCA"), the Partnership Act, R.S.B.C. 1996, c. 348, the Land Title Act, R.S.B.C. 1996, c. 250 and the inherent jurisdiction of this Honourable Court; AND UPON READING the pleadings and proceedings had and taken herein and other material provided, which, among other things, advise this Court that the findings of fairness as to the treatment of the Affected Creditors under, and in connection with (but prior to) the approval of the Plan of Arrangement will be, in part, the basis for the Petitioners' and Lumberco's reliance upon an exemption from registration under the United States Securities Act of 1933, as amended, of certain securities to be issued to the Affected Creditors under the Plan of Arrangement; AND UPON SERVICE to all parties of record in this proceeding: THIS COURT ORDERS AND DECLARES THAT: Extension of Stay of Proceedings 1. The stay of proceedings provided for in paragraph 24 of the Confirmation Order pronounced on December 6, 2002 and subsequently extended by subsequent Orders of this Court is further extended to 11:59 p.m. (Vancouver time) on the earlier of the Stay Termination Date or July 31, 2004, whereupon unless subsequently extended by Court Order, the Stay of Proceedings will automatically terminate without further Order of this Court. Plan Approval 2. Terms not otherwise defined in this Order shall have the same meanings as attributed thereto in the Plan of Arrangement (the "Plan"). All references to the Plan in this Order shall mean the amended version of the Plan which was presented to the Meeting of Affected Creditors held on June 7, 2004, a copy of which is attached as Exhibit "A" to Affidavit #23 of Phil Hosier. All references to Lumberco in this Order shall mean 4204247 Canada Inc., whose name will be changed to Western Forest Products Inc. prior to the Plan Implementation Date. All references to Pulpco in this Order shall mean 4204255 Canada Inc., whose name will be changed to Western Pulp Limited prior to the Plan Implementation Date. 3. Affidavit material having been filed on behalf of the Petitioners confirming that the Meeting Materials, the Registered Noteholders Meeting Materials, the Unregistered Noteholders Meeting Materials and the Notice to First Nations (as those terms are defined or referenced in the Meeting Order) were duly sent or delivered to each Affected Creditor or First Nation substantially in accordance with the Meeting Order, and notice to Affected Creditors of this application having been included with the Meeting Materials, the Registered Noteholders Meeting Materials and the Unregistered Noteholders Meeting Materials, the Meeting of the Affected Creditors was duly convened and held pursuant to the CCAA, and the Orders of this Court. 3 4. The requisite percentages of Creditors in the Class of Creditors created under the Plan have voted to approve the Plan in conformity with section 6 of the CCAA. 5. The Plan is fair and reasonable and is hereby sanctioned and approved pursuant to sections 6 and 7 of the CCAA and section 191 of the CBCA and, upon implementation of the Plan in accordance with its terms and this Order, the Plan, including all compromises, releases, arrangements and terms effected by the Plan, will be binding upon the Petitioners, Lumberco, Pulpco, the Affected Creditors and all other Persons and their respective successors and assigns in accordance with the terms of the Plan, and the Petitioners and all other Released Parties will thereupon be released and discharged from all Affected Claims and any and all indebtedness, obligations and liabilities, to the extent provided under the Plan and this Order. U.S. Securities Act Exemptions - Findings of Fairness 6. Having conducted a hearing in respect of the matter and prior to this Court's approval of the Plan, this Court finds and holds that the terms and conditions of the issuance and exchange of the Lumberco Shares and Warrants to and with the Affected Creditors in exchange for, and in full and final satisfaction of, the Claims held by the Affected Creditors are substantively and procedurally fair to the Affected Creditors and such issuance and exchange is hereby approved. In so finding and holding, this Court declares that: (a) the within hearing was open to all of the Affected Creditors and, on or before May 14, 2004, adequate notice thereof was timely transmitted to all of the Affected Creditors; and (b) the Affected Creditors had a meaningful opportunity to be heard at the within hearing and there were no impediments to the ability of any Affected Creditor to be heard. Plan Implementation 7. Upon the Plan Implementation Date, the following persons shall be appointed directors of Lumberco pursuant to section 3.6 of the Plan and section 191(3)(b) of the CBCA and shall hold office until the close of the first annual meeting of the shareholders of Lumberco following the Plan Implementation Date, subject to the by-laws of Lumberco and the CBCA: (a) James D. Arthurs; (b) Derek Brown; (c) Rick Doman; (d) Peter Gordon; (e) John Lacey; 4 (f) John McIntyre; (g) John Newman; and (h) Lee Doney. 8. The Distribution Record Date for determining those Affected Creditors entitled to receive a Distribution pursuant to the Plan shall be: (i) June 4, 2004 in respect of the Affected Creditors entitled to receive cash pursuant to validly deposited Elections to Receive Cash; (ii) the Warrant Record Date in respect of the Affected Creditors entitled to receive Warrants; and (iii) two (2) Business Days prior to the Plan Implementation Date in respect of the Affected Creditors entitled to receive Lumberco Shares from the Affected Creditors Share Pool pursuant to the Plan. 9. The Petitioners, Lumberco, Pulpco and the Monitor are hereby authorized and directed to take all actions necessary or appropriate to enter into, implement and consummate the contracts, instruments, releases and other agreements or documents to be created in connection with the Plan and/or implementing or giving effect to the Plan, including, without limitation, all of the corporate and financial transactions contemplated under the Plan, the Secured Bonds Term Sheet, the Pulpco Note, the Pulpco Security Interest, the Warrants and all such transactions, once completed, shall be effective in the sequential order and, where applicable, as of the times contemplated by the Plan and shall be authorized and approved in all respects and for all purposes without requirement for any further action by the shareholders, directors or officers of Lumberco, Pulpco or any of the Petitioners. 10. The transactions, distributions, compromises, releases, waivers and the reorganizations effected under the Plan are binding and, once completed, are hereby deemed to have been effected in the sequential order contemplated by Section 8.1 of the Plan. 11. Without limiting the provisions of the Meeting Order and the Revised Claims Process Order: (a) any Creditor that did not receive a Proof of Claim Package, or any Creditor that received a Proof of Claim Package but did not file a Proof of Claim in accordance with the provisions of the Revised Claims Process Order, is hereby forever barred from making any Claim against the Petitioners and shall not be entitled to any distribution under the Plan and any such Creditor's Claim is hereby forever extinguished; and (b) any Creditor that received a Notice of Disallowance and that did not file a Notice of Objection in accordance with the provisions of the Revised Claims Process Order is hereby forever barred from proving a Claim except for such Creditor's Affected Claim as set forth in the Notice of Disallowance delivered to such Creditor. 12. The Lumberco Shares, once issued pursuant to the Plan, are hereby declared to have been validly issued and will be outstanding as fully paid and non-assessable as of the Plan 5 Implementation Date, and the stated capital of such Lumberco Shares is hereby set at the full amount of the consideration received by Lumberco from the issuance of such Lumberco Shares pursuant to the Plan. 13. The Unsecured Notes and the trust indentures with respect to the Unsecured Notes shall be discharged and cancelled without any further action on the part of the Petitioners, Lumberco, Pulpco or the Indenture Trustee and all rights of the holders of Unsecured Notes shall be forever extinguished upon the later of: (a) the distribution of Lumberco Shares and Warrants, (b) the distribution of cash pursuant to validly deposited Elections to Receive Cash, and (c) the time immediately after the transactions set out in steps 1 to 12 of Schedule "B" to the Plan have been completed and become effective, all as contemplated under the Plan. 14. Effective upon the Plan Implementation Date, and upon payment of the full principal amount of the Secured Notes, all unpaid interest applicable to the Secured Notes, including all overdue and accrued but unpaid interest as at the Plan Implementation Date and all costs reimbursable or otherwise payable to the Secured Notes Trustee in accordance with the provisions of the indenture governing the Secured Notes, any registration against the property and assets of the Petitioners in respect of the Secured Notes in any Land Title Office, Personal Property Registry or any other registry or place where any lien, charge or encumbrance of any kind may be registered or recorded (collectively "Registries" and individually each a "Registry"), be and is hereby expunged, removed and discharged and the Registrar of Land Titles, and all other persons in control of any Registry, shall forthwith remove, discharge and deregister any registration against the property and assets of the Petitioners in respect of the Secured Notes forthwith following receipt by such Person(s) of: (a) a Court certified copy of this Order, or a facsimile version, or a photocopy of a facsimile version, of a Court certified copy of this Order; and (b) a letter from Fasken Martineau DuMoulin LLP (copied to counsel to the Secured Notes Trustee) to the Registrar of Land Titles, or other Person in control of any Registry confirming payment of all amounts owed pursuant to the Secured Notes being made to the Secured Notes Trustee and authorizing the registration of this Order in such Registry. Vesting of Assets 15. The Petitioners are hereby authorized and directed to assign and transfer the Transferred Obligations and the Lumber Assets and Pulp Assets to Lumberco and Pulpco, respectively and in accordance with the terms of the Plan, and, upon such assignment and transfer, the Lumber Assets and the Pulp Assets shall be vested in Lumberco and Pulpco, respectively, free and clear of all Claims, liabilities or encumbrances except for the Transferred Obligations. In accordance with the foregoing, effective on the Plan Implementation Date, all executory contracts, security agreements and other contractual relationships to which any one or more of the Petitioners is a party and which constitute Transferred Obligations shall be assigned, transferred to and assumed by Lumberco or 6 Pulpco and the need for the approval or consent of the other parties to the transfer, assignment and assumption of such executory contracts, security agreements and other contractual relationships, if required, is hereby dispensed with. Notwithstanding the timing of the registration of this Order with a Registry or a Land Title Office as contemplated by paragraphs 16 through 21 of this Order, the assignment and transfer of the Transferred Obligations and the Lumber Assets and Pulp Assets will, effective upon the Plan Implementation Date, be deemed to have taken place in the order set out in Schedule "B" to the Plan. 16. Upon registration at the relevant Registry of a Court certified copy of this Order, or a facsimile version, or a photocopy of a facsimile version, of a Court certified copy of this Order, together with a letter from Fasken Martineau DuMoulin LLP to such Registry: (a) authorizing the registration of this Order in such Registry; (b) identifying, with sufficient particularity for the purposes of the relevant Registry, the Lumber Asset or the Pulp Asset to be transferred; (c) identifying the party to whom the Lumber Asset or Pulp Asset is to be transferred; and (d) identifying the charges that constitute Transferred Obligations and that are to remain registered against title to or with respect to the Lumber Asset or Pulp Asset to be transferred, all of the right, title and interest of the Petitioners and each of them in and to the Lumber Asset or Pulp Asset identified in such letter (apart from the Lumberco Lands and the Pulpco Lands as defined below) shall be transferred to and vest in Lumberco or Pulpco, as the case may be and in accordance with such letter, as registered owner without further instrument of transfer or discharge, free and clear of all right, title, interest, encumbrances, liens, charges and equities of redemption of the Petitioners and all persons claiming by, through or under them or any of them, including without limitation all persons who are bound by Orders granted in these proceedings, and their respective heirs, executors, administrators, successors and assigns, but subject to the registered charges that constitute Transferred Obligations as identified by Fasken Martineau DuMoulin LLP in their letter to the relevant Registry. 17. Upon registration at the relevant Land Title Office of a Court certified copy of this Order together with a letter from Fasken Martineau DuMoulin LLP to the Registrar of Titles at such Land Title Office authorizing the registration of this Order in such Land Title Office, all of the right, title and interest of those Petitioners listed in Schedule "B" to this Order in and to those certain parcels or tracts of lands and premises listed in Schedule "B" (hereinafter collectively described as the "Lumberco Lands") shall be transferred to and vest in Lumberco as registered owner in fee simple, without further instrument of transfer or discharge, free and clear of all right, title, interest, encumbrances, liens, charges and equities of redemption of the Petitioners and all persons claiming by, through or under them or any of them, including without limitation all persons who are bound by 7 Orders granted in these proceedings, and their respective heirs, executors, administrators, successors and assigns, but subject to the provisos, reservations and conditions contained in the original Crown Grant thereof and subject to the registered encumbrances with respect to the Lumberco Lands as at June 11, 2004, including all certificates of pending litigation registered against the Lumberco Lands as set forth in Schedule "B", and for the purposes of this paragraph and paragraph 19 this Court directs the Registrar of the relevant Land Title Office to register an indefeasible title in favour of Lumberco in and to the Lumberco Lands and the Lumberco Transferred Charges (as defined in paragraph 19) and declares that it has been proved to the satisfaction of the Court on investigation that the title of Lumberco in and to the Lumberco Lands and the Lumberco Transferred Charges is a good safe holding and marketable title. 18. Upon registration at the relevant Land Title Office of a Court certified copy of this Order together with a letter from Fasken Martineau DuMoulin LLP to the Registrar of Titles at such Land Title Office authorizing the registration of this Order in such Land Title Office, all of the right, title and interest of those Petitioners listed in Schedule "C" to this Order in and to those certain parcels or tracts of lands and premises listed in Schedule "C" (hereinafter collectively described as the "Pulpco Lands") shall be transferred to and vest in Pulpco as registered owner in fee simple, without further instrument of transfer or discharge, free and clear of all right, title, interest, encumbrances, liens, charges and equities of redemption of the Petitioners and all persons claiming by, through or under them or any of them, including without limitation all persons who are bound by Orders granted in these proceedings, and their respective heirs, executors, administrators, successors and assigns, but subject to the provisos, reservations and conditions contained in the original Crown Grant thereof and subject to the registered encumbrances with respect to the Pulpco Lands as at June 11, 2004, including all certificates of pending litigation registered against the Pulpco Lands as set forth in Schedule "B", and for the purposes of this paragraph and paragraph 20 this Court directs the Registrar of the relevant Land Title Office to register an indefeasible title in favour of Pulpco in and to the Pulpco Lands and the Pulpco Transferred Charges (as defined in paragraph 20) and declares that it has been proved to the satisfaction of the Court on investigation that the title of Pulpco in and to the Pulpco Lands and the Pulpco Transferred Charges is a good safe holding and marketable title. 19. Upon registration at the relevant Land Title Office of a Court certified copy of this Order together with a letter from Fasken Martineau DuMoulin LLP to the Registrar of Titles at such Land Title Office authorizing the registration of this Order in such Land Title Office and together with such consents as may be required to transfer any of the Lumberco Transferred Charges as defined below in accordance with their terms, all of the right, title and interest of those Petitioners listed in Schedule "D" to this Order (whether listed by their names as they appear in the records of the Land Title Office as the registered owners of the Lumberco Transferred Charges (as defined below) or by their names as at the date of this Order) in and to those certain charges and encumbrances identified in Schedule "D" (hereinafter collectively described as the "Lumberco Transferred Charges") shall be transferred to and vest in Lumberco as registered owner of the Lumberco Transferred Charges, without further instrument of transfer or discharge, free and clear of all right, title, interest, encumbrances, liens, charges and equities of redemption of the Petitioners 8 and all persons claiming by, through or under them or any of them, including without limitation all persons who are bound by Orders granted in these proceedings, and their respective heirs, executors, administrators, successors and assigns, but subject to the encumbrances, if any, registered at the Land Title Office against the Lumberco Transferred Charges as at June 11, 2004. 20. Upon registration at the relevant Land Title Office of a Court certified copy of this Order together with a letter from Fasken Martineau DuMoulin LLP to the Registrar of Titles at such Land Title Office authorizing the registration of this Order in such Land Title Office and together with such consents as may be required to transfer any of the Pulpco Transferred Charges as defined in accordance with their terms, all of the right, title and interest of those Petitioners listed in Schedule "E" to this Order (whether listed by their names as they appear in the records of the Land Title Office as the registered owners of the Pulpco Transferred Charges (as defined below) or by their names as at the date of this Order) in and to those certain charges and encumbrances identified in Schedule "E" (hereinafter collectively described as the "Pulpco Transferred Charges") shall be transferred to and vest in Pulpco as registered owner of the Pulpco Transferred Charges, without further instrument of transfer or discharge, free and clear of all right, title, interest, encumbrances, liens, charges and equities of redemption of the Petitioners and all persons claiming by, through or under them or any of them, including without limitation all persons who are bound by Orders granted in these proceedings, and their respective heirs, executors, administrators, successors and assigns, but subject to the encumbrances, if any, registered at the Land Title Office against the Pulpco Transferred Charges as at June 11, 2004. 21. Upon this Order being submitted for registration at the relevant Land Title Office, the Petitioners and all persons claiming by, through or under them or any of them shall deliver up vacant possession of the Lumberco Lands and the Pulpco Lands to Lumberco and Pulpco, respectively. 22. If, subsequent to the Plan Implementation Date, it is necessary for the Petitioners to execute any documents necessary to effect the assignment or transfer of the Transferred Obligations, Lumber Assets and Pulp Assets to Lumberco and/or Pulpco and there is no person authorized to execute such documents on behalf of the relevant Petitioners, the Monitor is hereby authorized to execute such documents on behalf of any of the Petitioners and such execution, if necessary, is hereby deemed effective for all purposes, provided that no such delay will have the effect of changing the deemed sequence of the asset transfers contemplated by Schedule "B" of the Plan. Warrants 23. The right to receive and exercise the Warrants pursuant to the Plan shall be effective immediately upon the pronouncement of this Order. 24. The Warrant Record Date for determining Affected Creditors entitled to receive Warrants pursuant to the Plan and this Order shall be the earlier of: 9 (a) June 25, 2004; and (b) the date that is five (5) Business Days following the date on which the Petitioners and Lumberco have received written notice that all regulatory approvals and filings necessary for the distribution of the Warrants have been made and granted, or shall be such other date as may be agreed between the Petitioners, Lumberco and the Restricted Group. 25. On the Warrant Record Date: (a) the Monitor shall request the Indenture Trustee to provide to the Monitor, Lumberco and the Petitioners a list (the "Registered Noteholder List") of all Persons who are shown on the register of the Indenture Trustee as the registered holders of Unsecured Notes ("Registered Noteholders") and their respective addresses; and (b) the Monitor shall request from the Indenture Trustee a list (the "Participant Holders List") maintained by DTC as of the Warrant Record Date of all participant holders ("Participant Holders") that hold Unsecured Notes on behalf of beneficial owners of Unsecured Notes ("Unregistered Noteholders") through the facilities of DTC and deliver the Participant Holders List to the Petitioners, Lumberco and the Indenture Trustee. 26. On the Warrant Record Date or as soon as practicable thereafter, Lumberco will provide a direction to The Bank of New York, as warrant agent (the "Warrant Agent"), instructing it to register specified numbers of Warrants in the names of the Registered Noteholders (including DTC) and the other Affected Creditors entitled to receive Warrants pursuant to the Plan (other than the Unregistered Noteholders), and upon the registration of Warrants in accordance with such direction the distribution of Warrants will be deemed to have been effected in accordance with the Plan. 27. As soon as practicable following the Warrant Record Date, Lumberco will send, through the Warrant Agent, by mail, courier, fax or other electronic means, to each of the Registered Warrantholders (including DTC), materials consisting of all or some of the following items (collectively, the "Warrant Materials"): (i) a letter outlining, in general terms, the terms and conditions of the Warrants and the process for exercise; (ii) one or more warrant certificates evidencing the Warrants being issued ("Warrant Certificates"); (iii) one or more exercise forms (which, at the option of Lumberco, may form part of the Warrant Certificates) which will require the Persons completing such forms to provide certification, or other evidence satisfactory to Lumberco, regarding their eligibility to exercise Warrants under applicable securities laws; and (iv) such other documents, instruments, certificates or questionnaires as may be appropriate or desirable in the circumstances. 28. All documents, payments and other items required for a valid exercise of Warrants must be received by the Warrant Agent prior to the Warrant Expiry Time. 10 29. Notwithstanding any provision of the Plan or any other Order of this Court, none of Lumberco, any of the Petitioners or the Warrant Agent shall have any liability or obligation in respect of distributions of Warrants under the Plan to Participant Holders or to Unregistered Noteholders holding their Unsecured Notes through DTC or CDS once such distributions are made pursuant to this Order. Filing of Certificate Confirming Implementation of Plan 30. Upon the satisfaction or waiver of the conditions set forth in paragraph 8.4 of the Plan, the Monitor shall file with this Court, in accordance with section 8.5 of the Plan, a certificate which states that all conditions precedent to the Plan as set forth in section 8.4 of the Plan have been satisfied or waived and that the Plan Implementation Date has occurred. Permanent Injunction 31. Subject to the performance by the Petitioners of their obligations under the Plan, and except to the extent, if any, expressly contemplated by the Plan or this Order, all obligations or agreements, including all executory contracts, security agreements and other contractual relationships, to which any one or more of the Petitioners (or Lumberco or Pulpco in the case of obligations or agreements transferred to them) is a party shall be and remain in full force and effect, unamended, as at the Plan Implementation Date unless previously terminated by the Petitioners in accordance with an Order of this Court and no party to any such obligation or agreement shall, on or following the Plan Implementation Date, accelerate, terminate, refuse to renew, rescind, refuse to perform or otherwise repudiate its obligations thereunder, or enforce or exercise (or purport to enforce or exercise) any right or remedy (including any right of set-off, dilution, buy-out, divestiture, forced sale, option or other remedy) under or in respect of any such obligation or agreement, by reason: (a) of any event which occurred prior to the Plan Implementation Date and is not continuing after the Plan Implementation Date or which is or continues to be suspended or waived under the Plan, which would have entitled any other party thereto to enforce those rights or remedies; (b) that the Petitioners have sought or obtained relief under the CCAA and the CBCA; (c) of any default or event of default based on the financial condition or insolvency of the Petitioners including any ongoing possible insolvency by reason of the restructuring; (d) any change of control of the Petitioners or Lumberco arising from the implementation of the Plan; (e) of the effect upon the Petitioners of the completion of any of the transactions contemplated under the Plan including, for greater certainty, the assignment of 11 any Transferred Obligations from any Doman Entity to Lumberco or Pulpco pursuant to the Plan; or (f) of any compromises, settlements, restructurings, reorganizations, assignments, partial or otherwise, of agreements or rights among the Petitioners effected pursuant to the Plan. Treatment of Crown 32. For purposes of this paragraph and the following three paragraphs of this Order: (a) "Environmental Responsibility" means any duty, responsibility, indebtedness, liability or obligation, whether present or future, known or unknown, liquidated or unliquidated, disputed or undisputed, contingent or otherwise, and whether based in whole or in part on facts which existed before or after the Filing Date, that has arisen or may arise under any environmental legislation or regulations of Canada or British Columbia, any agreement or other arrangement contemplated under or in connection with any of those enactments or arising under any other agreement or common law claim; (b) "Forestry Responsibility" means any duty, responsibility, indebtedness, liability or obligation, whether present or future, known or unknown, liquidated or unliquidated, disputed or undisputed, contingent or otherwise, and whether based in whole or in part on facts which existed before or after the Filing Date that has arisen or may arise under any forestry legislation or regulations of British Columbia, or any agreement, licence, permit, plan or other arrangement contemplated under or in connection with any of those enactments; (c) "Port Alice Business" means the pulp manufacturing business previously carried on by Western Pulp Limited Partnership at the Port Alice Mill and now vested in Port Alice Specialty Cellulose Inc. pursuant to the Order of this Court pronounced on May 11, 2004; (d) The definitions of "Environmental Responsibility" and "Forestry Responsibility" are mutually exclusive. 33. Notwithstanding any other provision of this or any other Order, including paragraphs 15 through 21 and 40, with respect to Her Majesty the Queen in right of Canada ("HMQ Canada") and Her Majesty the Queen in right of the Province of British Columbia (the "Province"): (a) the definition of "Claim" contained in the Plan and as used in this Order includes only such claims as are within the definition of "claim" under the CCAA; (b) section 5.14 of the Plan shall apply to any default or non-compliance by any of the Petitioners, Lumberco or Pulpco with respect to any requirement of a statute, regulation or other enactment of Canada or British Columbia, or of any contract, lease, licence, permit, plan or other agreement, instrument or arrangement made 12 pursuant thereto, but only if and to the extent that the Province or HMQ Canada seeks to rely on such default or non-compliance to enforce payment of, or performance of an obligation related to, an Affected Claim or as the basis to terminate any rights of the Petitioners, Lumberco or Pulpco if that payment or performance is not made, and not otherwise, and no Governmental Authority of HMQ Canada or the Province shall be enjoined or in any way limited from enforcing any such requirement by any provision in the Plan, this Order, or any other Order made in the Proceedings except as set forth in this sub-paragraph. (c) The acquisition, in accordance with the terms of the Plan, by Lumberco of the Lumber Assets and by Pulpco of the Pulp Assets shall, when effected, occur such that those assets (the "Acquired Assets") will vest in Lumberco and Pulpco such that: (i) Lumberco and Pulpco shall not by that acquisition or otherwise become liable for, and the Acquired Assets shall not be subject to, any Affected Claim; (ii) any other claims, rights or remedies of HMQ Canada or the Province against any of the Doman Entities arising from or relating to the Port Alice Business or the Port Alice Assets of any nature, other than those which the parties agree, or the court orders, would normally and reasonably continue to apply with respect to the acquisition of an agreement, license, permit, plan or other arrangement included among the Acquired Assets, do not constitute a claim against Lumberco or Pulpco or the Acquired Assets for any purposes; (iii) any statutory liens or charges of HMQ Canada or the Province with respect to the Port Alice Business or the Port Alice Assets, and in particular but without limitation a lien under the Waste Management Act (British Columbia), do not constitute a claim, lien or charge against Lumberco, Pulpco or the Acquired Assets for any purposes; and (iv) the Acquired Assets shall vest in the acquiror free and clear of, and the acquiror shall not, by virtue of the acquisition, have any responsibility or liability in respect of: (A) any Environmental Responsibility arising in connection with the Port Alice Business or the Port Alice Assets, notwithstanding subparagraph (c)(ii); and (B) any Forestry Responsibility arising in connection with the Port Alice Business or the Port Alice Assets, other than those which fall within the exception provided in subparagraph (c)(ii). 34. Notwithstanding any other provision of this or any other Order, but subject to paragraph 33 of this Order and in addition to any rights reserved under any other Order, all of the Petitioners, Lumberco, Pulpco, HMQ Canada and the Province are each at liberty to 13 apply at any time following the Plan Implementation Date, on proper notice to each other, including, without limitation, on jurisdictional or constitutional grounds, for an Order that the definition of Claim contained in the Plan, and interpreted in accordance with the preceding paragraph, includes or does not include an Environmental Responsibility or a Forestry Responsibility of the Petitioners. 35. The preceding three paragraphs of this Order reflect an agreement reached among the Petitioners, HMQ Canada, the Province and the Restricted Group and do not reflect a judicial determination of the legal correctness of the issues referred to in those paragraphs. In particular, the Petitioners and the Restricted Group continue to assert that any Environmental Responsibility or Forestry Responsibility which is based on factual circumstances known or which ought to have been known to the Province as at June 3, 2004 constitutes an Affected Claim under the Plan, each of HMQ Canada and the Province continues to assert otherwise, and the Province and HMQ Canada acknowledge that HMQ Canada or the Province not having filed a Proof of Claim under the Plan in relation to any Environmental Responsibility or Forestry Responsibility, and the pronouncement of this Order, do not prevent the Petitioners, Lumberco and/or Pulpco from subsequently arguing that HMQ Canada and/or the Province could or should have done so, and that HMQ Canada and/or the Province's not having done so will not otherwise be relevant, or be raised by the Province or by HMQ Canada, in any future determination of the issues referred to in those paragraphs. General 36. The Administrative Charge and the Directors' Charge are hereby terminated and discharged effective as of the Plan Implementation Date, subject to the right of the Petitioners, with the approval of the Monitor and Restricted Group, to apply to extend the effective date of the Administration Charge if all amounts owing thereunder on the Plan Implementation Date have not been paid. 37. The Petitioners are hereby authorized to wind up the Petitioner Doman Industries Limited and any one or more of the remaining Petitioners, other than those Petitioners whose shares constitute Lumber Assets or Pulp Assets, at any time subsequent to the Plan Implementation Date, without the necessity for any further Court Order or resolution of shareholders. 38. Upon the occurrence of the Plan Implementation Date and the final distribution of Lumberco Shares or cash to Affected Creditors or the Standby Purchasers pursuant to the Plan, KPMG, Inc. having then fulfilled its duties as Monitor of the Petitioners pursuant to the terms of the Initial Order and the Confirmation Order, shall, subject to the completion of anything required or provided to be done pursuant to this Order including paragraph 22 hereof, be discharged from its duties as set forth in the Confirmation Order in relation to the Petitioners without the necessity of taxing its accounts (provided that they are consented to by the Petitioners) and without further Order of this Court. 39. Pursuant to Section 16 of the CCAA, this Order shall have full force and effect in all provinces of Canada. This Court requests the aid and recognition of any court or any 14 judicial, regulatory or administrative body in any province or territory of Canada (including the assistance of any court in Canada pursuant to Section 17 of the CCAA) and the Federal Court of Canada and any judicial, regulatory or administrative tribunal or other court constituted pursuant to the Parliament of Canada or the legislature of any province and any court or any judicial, regulatory or administrative body of the United States and the states or other subdivisions of the United States and of any other nation or state to act in aid of and to be complementary to this Court in carrying out the terms of this Order where required. 40. The Petitioners, the Monitor and any other interested parties are hereby granted leave to apply to this Court for any directions or determinations required to resolve any matter or dispute relating to the Plan, this Order or the subject matter thereof and the rights and benefits thereunder, provided that no provision of this Order shall be construed to modify or impair any right, title, interest, privilege or remedy expressly provided for or reserved under the Plan and nothing herein requires the Province to provide any consents that may be required to effect any transaction contemplated in the Plan or in this Order. 41. Endorsement of this Order by counsel appearing on this application is hereby dispensed with. BY THE COURT D. Tysoe, J. /s/ Brian Black --------------------------------- DEPUTY REGISTRAR APPROVED AS TO FORM: /s/ Michael A. Fitch ------------------------------------ Solicitor for the Petitioners ENTERED JUN 11 2004 VANCOUVER REGISTRY VOL. S1216 FOL 86 SCHEDULE A LIST OF COUNSEL Michael A. Fitch, Q.C. Counsel for Petitioners and Kibben Jackson Mary I.A. Buttery Counsel for Brascan Financial Corporation, Merrill Lynch Investment Managers LP and Oppenheimer Funds, Inc. Scott Turner Counsel for CIT Business Credit Canada Inc. John I. McLean Counsel for KPMG Inc. Richard Butler and David Counsel for Her Majesty the Queen in right of the Hatter Province of British Columbia Raymond D. Leong Counsel for The Attorney General of Canada on behalf of the Department of Fisheries and Oceans, The Attorney General of Canada on behalf of the Canada Customs and Revenue Agency; The Receiver General for Canada and the Attorney General of Canada Ryan Patryluk Pulp, Paper & Woodworkers of Canada, Local 3- AND -Pulp, Paper & Woodworkers of Canada, Local 8 J. Joseph D. Bateman Counsel for Wells Fargo Bank Minnesota, National Association, formerly known as Norwest Bank Minnesota, National Association Kevin Zych and Anthony Counsel for the Informal Committee of Unsecured Friend, Q.C. Noteholders

SCHEDULE "B" FEE SIMPLE PROPERTIES TO BE TRANSFERRED TO LUMBERCO

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SCHEDULE "C" FEE SIMPLE PROPERTIES TO BE TRANSFERRED TO PULPCO

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SCHEDULE "D" REGISTERED CHARGES TO BE TRANSFERRED TO LUMBERCO

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SCHEDULE "E" REGISTERED CHARGES TO BE TRANSFERRED TO PULPCO

DOMAN INDUSTRIES LTD 6-K