3. These terms and conditions are added to the terms and conditions set out in Schedule III to the Act and shall apply to Foothills but, unless the context otherwise requires, shall only apply to the construction and operation of that portion of the pipeline that extends from a point on the Alberta-British Columbia boundary near Coleman in a south-westerly direction across British Columbia generally parallel to the existing pipeline facilities of Alberta Natural Gas Company Ltd. to a point on the International Boundary Line between Canada and the United States of America at or near Kingsgate in the Province.

4. Foothills shall, in the construction and operation of the pipeline, comply with the laws of Canada and the laws of the Province.

• 5. (1) Subject to subsection (2), Foothills shall, when entering into any contract with a contractor for the construction or operation of the pipeline, require as a condition of such a contract that the contractor or any subcontractor of that contractor observe and comply with these terms and conditions.

• (2) Where an application is made by Foothills to the designated officer to exempt Foothills from the requirement referred to in subsection (1) in respect of the observing of or compliance with any provision of Part I, the designated officer may exempt Foothills from that requirement in respect of that provision.

• (3) Foothills shall be responsible for any breach of these terms and conditions by a contractor referred to in subsection (1) or any subcontractor of that contractor as if the breach had been committed by Foothills.

6. When requested by the designated officer, Foothills shall give him any reasonable assistance that he may require to carry out his duties in respect of the pipeline and shall furnish him with such information in respect of the construction or operation of the pipeline as he may request.

7. Employees or agents of the government of the Province shall, for the purpose of carrying out their duties in respect of the pipeline, be allowed reasonable access to any part of the right-of-way of the pipeline or any other area where the pipeline is being or is to be constructed.

8. Foothills shall, at all times, save harmless and indemnify and keep Her Majesty indemnified against and be responsible for all claims, demands, actions, suits, costs or other legal proceedings made or brought against Her Majesty by reason of or arising out of

• (a) the construction or operation of the pipeline;

• (b) the escape, ignition or explosion, for any cause, of gas or related hydrocarbons from or in the pipeline on the lands of Her Majesty;

• (c) any act or omission on the part of Foothills, its contractors and their subcontractors and its or their officers, servants, agents or employees in respect of or in relation to the pipeline on the lands of Her Majesty, including the construction or operation of the pipeline; and

• (d) any act or omission on the part of any officer, servant, agent or employee of Her Majesty in respect of or in relation to the pipeline on the lands of Her Majesty, not including such acts or omissions as would in law constitute gross negligence.

9. Foothills shall, at all times, pay to Her Majesty the amount of any loss or damage that has been suffered or sustained by Her Majesty by reason of or arising out of the matters set out in section 8.