PAGES WHERE CONFIDENTIAL TREATMENT HAS BEEN REQUESTED PURSUANT TO RULE 406 OF
THE SECURITIES ACT OF 1933, AS AMENDED, ARE MARKED "CONFIDENTIAL TREATMENT
REQUESTED PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION" AND THE
CONFIDENTIAL SECTION HAS BEEN MARKED WITH A STAR (*)
REDACTED COPY
THIS DISTRIBUTION AGREEMENT is made on the 23rd day of November, 2001
BY AND BETWEEN:
NORSKE ▇▇▇▇ CANADA SALES INC., a company incorporated under
the laws of British Columbia whose registered office is at ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Street, P.O. Box 10058 Pacific Centre,
Vancouver, British Columbia, Canada V7Y IJ7 (the "VENDOR")
AND:
PAN ASIA PAPER CO. PTE LTD, a company incorporated under the
laws of Singapore whose registered office is at ▇ ▇▇▇▇▇▇▇ ▇▇▇,
#▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "PURCHASER").
WHEREAS:
(A) The Vendor, directly and/or through its affiliates, is engaged in the
business of manufacturing, marketing, distributing and selling Relevant
Products; and
(B) The Vendor and the Purchaser have agreed that all sales, marketing and
distribution of the Relevant Products in the Territory during the Term
of this Agreement, including without limitation all outstanding orders
and Sales Agreements, shall be carried out exclusively by the Purchaser
in accordance with the terms and conditions of this Agreement.
NOW, IT IS AGREED AS FOLLOWS:
ARTICLE 1- DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, the following words and expressions shall have the
meanings respectively assigned to them.
(a) "AFFILIATE" means a Subsidiary or, in the case of a
partnership, a partnership is an Affiliate of a corporation or
company when the partnership and such corporation are
controlled by the same corporation or company
(b) "RELEVANT PRODUCTS" means all wood-containing printing and
writing paper between newsprint grade and lightweight-coated
grade, including but not limited to newsprint, improved
newsprint, highbright newsprint, directory, super calendared
papers and lightweight-coated papers, which is manufactured by
the Vendor or any of its Affiliates, and with effect from 1
January 2002 to include products manufactured by the ▇▇▇▇▇
formerly owned by Pacifica Papers Inc.
(c) "SALES AGREEMENTS" shall mean all oral and written agreements
(including agency agreements) to which the Vendor is a party
that pertain to the sale of Relevant Products in the
Territory.
(d) "SUBSIDIARY" means, in relation to a company or corporation,
any other company or corporation (i) which is controlled,
directly or indirectly, by the first-mentioned company or
corporation and, for these purposes, a company or corporation
shall be treated as being controlled by another if that other
company or corporation is able to direct its affairs and/or
control the composition of its board of directors or
equivalent body; or (ii) at least half the issued share
capital of which is beneficially owned, directly or
indirectly, by the first-mentioned company or corporation; or
(iii) which is a direct or indirect subsidiary of another
subsidiary of the first-mentioned company or corporation.
(e) "TERM" means that period of time from the date of this
Agreement to the date set forth in written notice provided by
one party to the other that the notifying party wishes to
terminate this Agreement, which date shall not be less than
six (6) months from the date of the notice, having regard to
relevant competition law requirements.
(f) "TERRITORY" means the territorial limits of all territories
and countries located west of the western boundary of Alaska,
U.S.A. and east of the western boundary of Pakistan from time
to time, but excluding Japan.
(g) "US$" or "US DOLLAR" means the lawful currency of the United
States of America.
1.2 In this Agreement:
(a) a reference to a person includes a reference to any body
corporate, unincorporated association or partnership and a
reference to that person's legal personal representatives or
successors;
(b) words importing the singular include the plural and vice versa
and words importing one gender include every other gender
unless the context requires otherwise;
(c) references to a Recital, Clause or Schedule, unless the
context otherwise requires, is a reference to a recital or
clause of or schedule to this Agreement;
2
(d) the Recitals and Schedules form part of this Agreement and
shall have the same force and effect as if set out in the body
of this Agreement, and references to this Agreement include
the Recitals and Schedules; and
(e) headings are for reference only and shall not affect the
interpretation of this Agreement.
ARTICLE 2 - DISTRIBUTION
2.1 MANDATE. Subject to Article 5, the Vendor hereby appoints the Purchaser
and hereby grants to the Purchaser the right to sell, market and
distribute the Relevant Products in the Territory on an exclusive basis
during the Term of this Agreement. The Purchaser hereby accepts the
foregoing mandate and agrees to act in the aforesaid exclusive capacity
in respect of the Relevant Products in the Territory during the Term
hereof.
2.2 SALES AGREEMENTS. Without in any manner limiting the provisions hereof,
the Vendor sells, transfers and assigns to the Purchaser on an "as is
where is" basis, and without warranty, all of the Vendor's right, title
and interest in and to the Sales Agreements subject to the provisions
regarding assignment contained in such Sales Agreements. The Vendor
shall provide details of the Sales Agreements to the Purchaser on or
prior to the effective date hereof whereupon the Relevant Products
contemplated therein shall be sold by the Vendor to the Purchaser in
accordance with the provisions hereof for resale pursuant to the terms
of the relevant Sales Agreements. For greater certainty, in no event
shall the Vendor sell Relevant Products contemplated in the Sales
Agreements except through the Purchaser pursuant hereto. The Purchaser
agrees to assist the Vendor in obtaining any required consents to such,
assignment and covenants to comply with all terms of such Sales
Agreements once assigned.
2.3 CONSENTS. The Vendor will use its reasonable endeavors to obtain such
consents as may be required in order to effect the sale, transfer and
assignment contemplated in Section 2.2 hereof; provided, however, that
in no event will the Vendor incur any liability whatsoever in the event
of its inability to procure such consents.
2.4 ADJUSTMENTS. On the effective date hereof, the Vendor will pay to the
Purchaser all moneys (including, without limitation, all advance
payments, deposits and partial payments for Relevant Products not yet
then delivered but excluding any moneys received for Relevant Products
delivered prior to the effective date hereof) and transfer to the
Purchaser all security (including, without limitation, letters of
credit) received by it in respect of all outstanding orders and Sales
Agreements being sold, transferred and assigned to the Purchaser
pursuant to this Agreement.
2.5 CUSTOMER LIST. The Vendor sells, transfers and assigns to the Purchaser
on an "as is where is" basis, and without warranty, all the Vendor's
right, title and interest in and to, and shall deliver to the Purchaser
on or prior to the effective date hereof, copies of all outstanding
written orders and descriptions of all outstanding oral orders for (in
whole or in part) the Relevant Products within the Territory, a list of
all customers (including contact name or names, addresses and telephone
and facsimile numbers) who over the past three years have purchased the
Relevant Products within the Territory.
3
2.6 SUBSIDIARY. For all purposes of this Agreement, the rights of the
parties hereunder shall also extend to and include any of their
respective Subsidiaries.
4
CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 406 OF THE SECURITIES ACT OF
1933, AS AMENDED, AND THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE
COMMISSION - CONFIDENTIAL SECTION HAS BEEN MARKED WITH A STAR (*)
ARTICLE 3 - TERMS OF SALE
3.1 Subject to Article 5, and unless otherwise agreed between the parties,
the terms and conditions upon which the Purchaser shall purchase the
Relevant Products from the Vendor shall include the following: (a) the
price payable by the Purchaser to the Vendor for the Relevant Products
from time to time during the Term shall be equal to the price
negotiated for the resale of the Relevant Products by the Purchaser to
its customer less the distribution fee set out in Schedule 1 hereto,
and shall be payable in US dollars on a * basis from the date of
transfer of title; and (b) all shipping and delivery charges will be
for the account of the Vendor and, unless otherwise agreed, all
shipments will be on a C and F (cost and freight) basis.
3.2 Title will transfer from the Vendor to the Purchaser upon delivery of
the Relevant Products to the carrier against ▇▇▇▇ of lading.
ARTICLE 4 - RIGHTS AND OBLIGATIONS OF PURCHASER
4.1 SALE IN OWN NAME. The Purchaser shall sell the Relevant Products in the
Territory in its own name and for its own account and risk. All
purchasers of Relevant Products will be customers of the Purchaser and
not the Vendor. Notwithstanding anything in this Agreement to the
contrary, nothing in this Agreement shall be interpreted as
constituting the Purchaser as an agent of the Vendor for any purpose.
All customer relations, complaints and other dealings shall be handled
solely by the Purchaser. Notwithstanding the foregoing, the Purchaser
agrees that it will not re-wrap, re-label or otherwise sell the
Relevant Products to any purchaser thereof in any form other than as
shipped by the Vendor to the Purchaser under this Agreement.
4.2 NO REPRESENTATION. Subject to Article 5, the Purchaser shall have no
right or authority to act for or in the name of, or to bind, the Vendor
in any way whatsoever or to extend any warranty or make any
representation on behalf of the Vendor. The Purchaser shall furthermore
be solely responsible for its obligations and liabilities to third
parties.
ARTICLE 5 - ORDER AND DELIVERY
5.1 SALES FORECASTS. The Purchaser shall use its reasonable efforts to
provide to the Vendor on an ongoing basis a rolling forecast of its
requirements of the Relevant Products for sale in the Territory.
5.2 ORDERS AND ACCEPTANCE. Orders placed by the Purchaser with the Vendor
in connection with the Relevant Products shall be accepted or rejected
by the Vendor in its discretion within twenty-one (21) days of receipt
of same. Each order from the Purchaser shall set
5
forth the proposed delivery period and all other relevant terms and
conditions. Orders shall be deemed to have been rejected if the Vendor
fails to send a written acceptance of such order prior to the
expiration of the above noted twenty-one (21) day period. Subject
to Section 10.2, the Purchaser shall have no right to cancel an order following
acceptance.
ARTICLE 6 - TERRITORIAL LIMIT
6.1 The Purchaser agrees that it will not knowingly, directly or
indirectly, sell or distribute the Relevant Products or otherwise make
same, or permit same to be made, available outside of the Territory.
ARTICLE 7 - PROTECTED INTELLECTUAL PROPERTY RIGHTS
7.1 The Purchaser acknowledges and agrees that all intellectual property
rights, including without limitation, trademarks associated with the
Relevant Products are owned by an Affiliate of the Vendor and licensed
to the Vendor. The Purchaser obtains no ownership right, title or
interest in such intellectual property under this Agreement and shall
not take any action which would alter, modify or infringe such
intellectual property rights. The Vendor grants to the Purchaser a
sub-license of such intellectual property rights for the sole purpose
of marketing and selling the Relevant Products in the Territory. The
Purchaser will not take any action to register in any country in the
Territory any trademarks which are confusingly similar to the Vendor's
trademarks. The Purchaser agrees that it will not, during or after the
term of this Agreement, in any way dispute or impugn the validity of
the Vendor's Affiliate's trademarks or other intellectual property or
the rights of the Vendor as licensor thereof.
ARTICLE 8 - RIGHTS AND OBLIGATIONS OF THE VENDOR
8.1 EXCLUSIVE RIGHT. The Vendor shall perform all of its obligations
following acceptance of an order and shall not knowingly, directly or
indirectly, sell or distribute the Relevant Products within the
Territory to any other party.
8.2 DUTIES, ETC. All import and export duties and other similar taxes
payable in respect of the sale of the Relevant Products shall be the
responsibility of the Purchaser.
ARTICLE 9 - PACKING AND SHIPPING
9.1 PACKING. Unless otherwise agreed, Relevant Products shall be prepared
and packed in accordance with the Vendor's customary practices.
6
9.2 SHIPPING. Shipment shall be effected by the means of transport
determined jointly by the Vendor and the Purchaser; failing such
agreement, the Vendor shall use the means of transport most recently
used by it for the customer in question or, where there is no precedent
for the customer in question, the Vendor shall use the means of
transport normally used by it for such purposes.
ARTICLE 10 - DELIVERY TIME AND FORCE MAJEURE
10.1 Unless otherwise agreed upon by the parties, delivery periods commence
on the date of acceptance of an order.
10.2 Events such as force majeure, labour problems, shortages of materials
and other circumstances which affect the Vendor or the Vendor's
Affiliates and which are beyond the reasonable control of the Vendor
entitle the Vendor to extend the delivery period for a period
corresponding to the duration of the disability, and furthermore
entitle either the Vendor or the Purchaser to cancel an order without
any resulting claim for damages should the delay extend beyond
forty-five (45) days. The Vendor shall promptly notify the Purchaser of
the occurrence of such events.
ARTICLE 11- EARLY TERMINATION
11.1 EARLY TERMINATION ON NOTICE. If the Vendor gives a notice to the
Purchaser notifying the Purchaser of the Vendor's desire to terminate
this Agreement and such notice expires on or before 1 July 2003, the
Vendor shall on or before the expiry of the notice pay to the Purchaser
a fee, calculated as follows:-
Distribution fee payable by Vendor to Purchaser for the
sale and purchase of groundwood specialties for the last
12 months prior to Purchaser's receipt of such notice x 3
-----------------------------------------------------
12
11.2 EARLY TERMINATION WITHOUT NOTICE. This Agreement shall be terminated:
(a) immediately, if this Agreement, or the actions of the parties
under this Agreement are, in the reasonable determination of a
party hereto as evidenced or substantiated by a legal opinion,
unlawful; or
(b) on written notice by a party to other party on a breach by the
other party which remains uncured within thirty (30) days
after the date on which written notice thereof requiring the
other party to cure the same shall have been received by it.
ARTICLE 12 - BREACH
7
12.1 BREACH. In addition to the right to terminate as set out in Section
11.2, either party shall have the right to claim monetary damages
(which for the purposes hereof includes, without limitation, interest
from the date of default at the annual rate of twenty-four percent
(24%) at any time in the event of a breach or default by the other to
perform any of its obligations hereunder and to rectify same within
seven (7) days in the case of monetary default and for all other
defaults thirty (30) days following written notice (except for a
non-monetary default which is incapable of being rectified within such
thirty (30) day delay, provided that the party in default commences to
rectify the default within such thirty (30) day delay and proceeds
thereafter in a diligent and expeditious manner).
ARTICLE 13 - DISPUTES
13.1 DISPUTE RESOLUTION. Any dispute, controversy or claim (a "DISPUTE")
arising out of or relating to this Agreement shall be resolved in
accordance with the procedures specified in this Article 12, which
shall be the sole and exclusive procedures for the resolution of any
such disputes.
13.2 NEGOTIATION BETWEEN EXECUTIVES.
(a) The parties shall attempt in good faith to resolve any Dispute
arising out of or relating to this Agreement promptly by
negotiation between the appointed representatives of the
Vendor and the Purchaser who are at a higher level of
management than the persons with direct responsibility for
administration of this Agreement.
(b) If the matter has not been resolved by these persons within
thirty (30) days of the disputing party's notice, or if the
parties fail to meet within fifteen (15) days from the date of
such notice, either party may initiate arbitration as provided
hereinafter.
(c) All negotiations pursuant to this clause are on a confidential
and without prejudice basis and shall be treated as compromise
and settlement negotiations.
13.3 ARBITRATION.
(a) In the event of any Dispute between the parties hereto arising
out of or in connection with this Agreement, including any
question regarding its existence validity, interpretation,
breach or termination, such Dispute shall be finally resolved
by arbitration under the Rules of London Court of
International Arbitration ("LCIA"), which Rules are deemed to
be incorporated by reference into this Section 13.3.
(b) The seat of the arbitration shall be London, England, and the
language of the arbitration shall be English.
8
(c) The arbitral tribunal (the "TRIBUNAL") shall consist of three
(3) arbitrators one (1) to be appointed by the claimant of the
Dispute, one (l) to be appointed by the respondent of the
Dispute and the third (3rd) to be appointed by mutual
agreement between the first two arbitrators or, failing
agreement within thirty (30) days, by the then Chairman of the
LCIA.
(d) Any award of the Tribunal shall be denominated in US dollars
and be binding from the day it is made, and the parties hereto
waive any right to refer any question of law and any right of
appeal on the law and/or merits to any court.
(e) This Section 13.3 shall be governed by English law.
13.2 CONTINUED PERFORMANCE. Each party is required to continue to perform
its obligations under this Agreement pending final resolution of any
Dispute arising out of or relating to this Agreement.
ARTICLE 14 - MISCELLANEOUS
14.1 MODIFICATIONS. This Agreement shall not be modified, amended, cancelled
or altered in any way except by an instrument in writing signed by all
parties. All amendments or modifications of this Agreement shall be
binding upon the parties despite any lack of consideration so long as
the same shall be in writing and executed by the parties.
14.2 WAIVER. No party hereto shall have been deemed to have waived any right
arising out of this Agreement or out of any default or breach
hereunder, unless such waiver is evidenced by a written instrument by
such party. No waiver of any default or breach hereunder shall be
construed to constitute a waiver of any other default or breach
hereunder whether similar or not. All representations and warranties
shall survive without estoppel or waiver arising as a result of any
investigation by either party or disclosure to any party hereunder.
14.3 SEVERABILITY. Should any term, clause or provision of this Agreement be
judged to be invalid for any reason whatsoever, such invalidity shall
not affect the validity or operation of any other term, clause or
provision, and such invalid term, clause or provision shall be deemed
to have been deleted from this Agreement.
14.4 GOVERNING LAW. This Agreement is governed by, and shall be construed in
accordance with the laws of Singapore.
14.5 ASSIGNMENT. No party shall have the right, power or authority to assign
this Agreement or any of its rights or obligations hereunder to any
third party, and this Agreement may not be involuntarily assigned or
assigned by operation of law, without the prior written consent of the
other parties. Any such assignment without the other parties' prior
written consent shall be null and void.
14.6 THIRD PARTY BENEFITS. This Agreement shall be binding upon, and inure
to the benefit of, each of the parties and their respective successors
and permitted assigns. Nothing
9
contained in this Agreement, express or implied, shall be deemed to
confer any right or remedy upon, or obligate, any person or entity
other than the parties and their respective successors and permitted
assigns.
14.7 NO PARTNERSHIP OR AGENCY. No party shall have the right, power or
authority to create any obligation or duty, express or implied, on
behalf of any other party.
14.8 NOTICE. All notices, demands, requests, consents or other
communications hereunder shall be in writing and shall be given by
personal delivery, by express courier, by registered mail or certified
mail with return receipt requested, to the parties at the addresses
shown below or to such other address as may be designated by written
notice given by any party to the other parties. All notices, demands,
requests, consents or other communications hereunder shall be deemed
effective upon delivery if personally delivered, or the earlier of
actual delivery or three days after dispatch if sent by express
courier, or the earlier of actual delivery of five (5) days after
dispatch if sent by registered or certified mail (or airmail for an
overseas address).
To the Vendor: ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Street,
P.O. Box 10058 Pacific Centre,
Vancouver, British Columbia,
Canada V7Y IJ7
Attention: Senior VP, Sales & Marketing
To the Purchaser: ▇ ▇▇▇▇▇▇▇ ▇▇▇,
#▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: Chief Sales Officer
14.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
14.10 CAPTIONS. The Article and Section headings and captions contained
herein are for purposes of reference and convenience only and shall not
in any way affect the meaning or interpretation of this Agreement.
14.11 SECRECY. Each party to this Agreement hereby undertakes to keep
absolutely confidential all information which it may obtain in
connection with this Agreement relating to the other party to this
Agreement that is not a matter of public record or shall not be subject
to disclosure by virtue of law, including, by way of example,
information relating to corporate and business organisation, financial
structure and conditions, internal policies concerning employment and
industrial relations in general. Without limiting the generality of the
foregoing, the Vendor shall handle all of the Purchaser's confidential
10
information, marketing and other material as business secrets and shall
maintain such information and material in strict confidence. In
particular, it is strictly forbidden for the Vendor to pass on any
information relating to customers, prices, price changes, pricing
methods, rebates, refunds, margins, costs, traded volumes and/or
production figures or any similar information to any competitive
supplier, including to other vendors to the Purchaser. It is understood
that each party shall hold the other party harmless from any damages
such other party may incur as a consequence of the first party having
disclosed to third parties unauthorised information relating to such
other party.
14.12 PUBLIC ANNOUNCEMENTS. Unless otherwise required by law or regulatory
authorities, no press release or other public announcement pertaining
to the transactions contemplated by this Agreement will be made by or
on behalf of any party without the prior approval of the other parties.
14.13 ENTIRE AGREEMENT. This Agreement, including the Schedules and Exhibits
hereof, is the only controlling instrument and represents the complete
and accurate description of the intent of the parties, and constitutes
the entire agreement between the parties relating to the subject matter
hereof, and there are no prior representations, warranties or
agreements relating thereto. No change in, addition to, or waiver of
the terms and conditions hereof shall be binding on any party unless
approved by it in writing.
IN WITNESS WHEREOF, the parties executed this Agreement on the date
first above written.
PAN ASIA PAPER CO. PTE LTD
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior VP & Chief Sales Officer
NORSKE ▇▇▇▇ CANADA SALES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior VP, Sales & Marketing
11
CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 406 OF THE SECURITIES ACT OF
1933, AS AMENDED, AND THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE
COMMISSION - CONFIDENTIAL SECTION HAS BEEN MARKED WITH A STAR (*)
SCHEDULE 1
(Article 3.1)
Distribution Fees
From 1 July 2001 to 31 December 2001:
PRODUCTS RATE
Groundwood specialties *
Standard newsprint *
From 1 January 2002 onwards:
PRODUCTS TOTAL ANNUAL RATE
SALES VOLUME
Groundwood specialties equal to or less *
than 20,000 mt
equal to or less *
than 40,000 mt
more than *
40,000 mt
Standard newsprint equal to or less *
than 100,000 mt
equal to or less *
than 200,000 mt
more than *
200,000 mt
