Exhibit 10.109
Agreement
relating to
Electricity xxxxxx
Xxxxxx Xxxx Xxxxxx Limited
CHH
and
Whakatane Mill Limited
WML
Date May 4, 2010
XXXX GULLY
AUCKLAND VERO CENTRE, 48 SHORTLAND STREET
XX XXX 0000, XXXXXXXX 0000, XX XX00000, XXX XXXXXXX
TEL 00 0 000 0000 FAX 0000000000000
XXXX GULLY
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This Agreement is made on
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May 4, 2010 |
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between
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(1 |
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Xxxxxx Xxxx Xxxxxx Limited (CHH) |
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and
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(2 |
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Whakatane Mill Limited (WML) |
Introduction
| A. |
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CHH is party to the following electricity hedging agreements: |
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(i) |
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an electricity hedging arrangement with Mighty River Power Limited as set
forth in the International Swap Dealers Association, Inc. (ISDA) Master Agreement
between CHH and Mighty River Power Limited dated 1 February 2000 (the Mighty River
Power ISDA Agreement), the schedule to the Mighty River Power ISDA Agreement dated
1 February 2000 and the Electricity Swap Confirmation dated 18 March 2004
(as supplemented by a letter dated 19 December 2005 from Mighty River Power Limited)
insofar as it relates to Grid Reference Point ARI1101 for the quantity of 10MW
(together, the Mighty River Power Agreement); and |
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(ii) |
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an electricity hedging agreement with Contact Energy Limited as set forth in the ISDA Master
Agreement between Seller and Contact Energy Limited dated 9 August 2001 (the Contact ISDA
Master Agreement), the schedule to the Contact ISDA Master Agreement dated 9 August 2001 and
the Electricity Swap Confirmation dated 11 December 2006 insofar as it relates to
Grid Reference Point WRK2201 for the quantity of 5MW (together, the Contact Energy Agreement). |
| B. |
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Pursuant to an asset purchase agreement between CHH and the WML dated on or about the date of
this agreement (the Asset Purchase Agreement), CHH is proposing to sell to WML, and WML is
proposing to purchase from CHH, the business assets of CHH’s Whakatane mill. |
| C. |
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The parties wish to enter into this Agreement to record their agreement in respect of the
Mighty River Power Agreement, the Contact Energy Agreement (together, the Existing Hedging
Agreements) and any additional or replacement electricity hedging agreements which are
relevant to WML as owner of the Whakatane Mill. |
It is agreed
In this Agreement, unless the context indicates otherwise:
1.1 Definitions
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Business Day means a day (other than a Saturday or Sunday) on which registered banks
in Auckland and Whakatane are open for business; |
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Confidential Information includes, but is not limited to, the terms of this Agreement, all
strategies, forecasts, projects, plans, financial information of a party or any of its
related companies, terms of supply and all other documents, records and information (in
whatever form) of a party or any of its related companies which is of a confidential
nature;
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(a) |
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in respect of the Existing Hedging Agreements, Mighty River Power Limited
or Contact Energy Limited (as the case may be); and |
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(b) |
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in respect of any New Electricity Hedging Agreement, the counterparty to
the New Electricity Hedging Agreement entered into by CHH; |
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Electricity Hedging Agreements means the Existing Hedging Agreements together with any New
Electricity Hedging Agreement; |
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New Electricity Hedging Agreement means any additional or replacement electricity hedging
agreement which is relevant to WML and approved by WML in accordance with this Agreement; |
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Relevant Portion means the extent to which an Electricity Hedging Agreement is relevant to
WML, being: |
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(a) |
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in the case of the Mighty River Power Agreement, Grid Reference Point
ARI1101 for the quantity of 10MW; |
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(b) |
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in the case of the Contact Energy Agreement, Grid Reference Point WRK2201
for the quantity of 5MW; and |
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(c) |
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in the case of any New Electricity Hedging Agreement, the grid reference
point and electricity MW specified by CHH under clause 6.1 (or as otherwise agreed by
the parties); |
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Term has the meaning ascribed to it in clause 2 of this Agreement; and |
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Whakatane Mill means the mill at Whakatane to be transferred from CHH to WML pursuant to
the Asset Purchase Agreement. |
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In this Agreement, unless the context otherwise requires: |
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(a) |
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any reference to information includes information in any form, whether
provided orally, or provided or stored in a visible, electronic or other form; |
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(b) |
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a reference to a clause is a reference to a clause of this Agreement,; |
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(c) |
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a reference to this Agreement or another document includes any variation,
novation or replacement of either of them; |
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(d) |
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the singular includes the plural and vice versa; |
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(e) |
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the word person includes an individual, a body corporate, an association of
persons (whether corporate or not), a trust, government or any public, statutory,
governmental, regulatory or judicial entity, department, agency or authority, in each
case, whether or not having a separate legal personality; |
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(f) |
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a reference to a statute or other law includes regulations and other
instruments under it and consolidations, amendments, re-enactments of any of them; |
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(g) |
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words importing one gender include the other genders; |
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XXXX GULLY
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(h) |
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if a party comprises more than one person, each of those person’s liability is
joint and several; |
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(i) |
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a reference to a party to this Agreement or another document includes that
party’s successors and permitted assigns and substitutes; and |
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(j) |
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where a word or phrase is given a particular meaning, other parts of
speech and grammatical forms have corresponding meanings. |
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The Term commences as at the date of this Agreement and continues until terminated in
accordance with clause 7 of this Agreement. |
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(a) |
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Mighty River Power Limited and Contact Energy Limited (each as a
Counterparty) will perform their respective obligations under the Existing Hedging
Agreements; and |
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(b) |
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each Counterparty to any New Electricity Hedging Agreement to which this
Agreement applies will perform its obligations under that New Electricity Hedging
Agreement, |
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to the extent of the Relevant Portion of each Electricity Hedging Agreement. |
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(a) |
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Subject to clause 4 of this Agreement, WML will perform all obligations of CHH
under each Electricity Hedging Agreement to the extent of the Relevant Portion of
that Electricity Hedging Agreement, as if WML was a party to that Electricity Hedging
Agreement. |
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(b) |
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For the avoidance of doubt, WML will be under no obligation to perform the
obligations specified in clause 3.2(a) prior to the commencement of the Term. |
| 4.1 |
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Prior notification by CHH |
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CHH will provide WML with written notice of all amounts due and payable by CHH under
the Electricity Hedging Agreements once CHH is advised or becomes aware of any amounts due
and payable. CHH will use reasonable endeavours to maximise the notice given to WML of any
payment to be made by WML under clause 4.2. It is acknowledged by WML that circumstances
relating to the Electricity Hedging Agreements will mean that the period of notice will
vary from time to time. |
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Subject to receipt of a notice from CHH under clause 4.1, WML will pay all amounts due
and payable by CHH under the Electricity Hedging Agreements (to the extent the payment
relates to the Relevant Portion of that Electricity Hedging Agreement) to CHH not less
than |
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one Business Day prior to the date which CHH is required to make that payment to a third
party under the relevant Electricity Hedging Agreement. |
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CHH will pay all amounts received by it from any Counterparty under any Electricity
Hedging Agreement (to the extent the payment relates to the Relevant Portion of that
Electricity Hedging Agreement) to WML within seven Business Days of receipt of that
payment from that Counterparty. For clarity, CHH will not be liable to WML in the event
that any Counterparty fails to make payment as required under any Electricity Hedging
Agreement. |
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Any payments made by WML or CHH under this clause 4 will: |
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(a) |
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be in New Zealand dollars; |
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(b) |
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be made without counter-claim or set-off; |
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(c) |
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be made before 3.00pm New Zealand time on the due date for payment in the
manner specified by CHH or WML (as the case may be). |
| 5. |
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Variations and termination |
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CHH shall not agree to any amendment or termination of any Electricity Hedging
Agreement to the extent relevant to any Relevant Portion, except with the prior written
approval of WML, such approval not to be unreasonably withheld or delayed. |
| 6. |
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New Electricity Hedging Agreements |
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In the event that CHH proposes to enter into a New Electricity Hedging Agreement after
the date of this Agreement, CHH will advise WML of the terms of the proposed Electricity
Hedging Agreement relevant to WML (by grid reference point and electricity MW). |
| 6.2 |
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Prior approval of WML |
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This Agreement will only apply to a New Electricity Hedging Agreement if WML has given
its prior approval in respect of that agreement. For the avoidance of doubt, WML can
decide not to give its approval at its sole discretion. WML acknowledges that CHH may be
required to enter into a New Electricity Hedging Agreement within a very short time period
and WML will, to the extent reasonably practicable, provide a response to CHH within the
response period specified by CHH, acting reasonably. WML will be deemed to have not given
its approval if it fails to respond to CHH within the time period specified by CHH when
seeking WML’s approval. |
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Once WML has given its approval to CHH entering into a New Electricity Hedging
Agreement: |
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(a) |
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that approval may not be revoked; |
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XXXX GULLY
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(b) |
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CHH may take such steps as it considers necessary to complete the documentation
for, and give effect to, the New Electricity Hedging Agreement; and |
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(c) |
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that New Electricity Hedging Agreement will be subject to this Agreement to
the extent of the Relevant Portion. |
| 7.1 |
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Termination of agreement for cause |
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If any party (Defaulting Party) commits a material breach of this Agreement, which is
not capable of being remedied, or if the breach is capable of being remedied, is not
remedied within five Business Days after notice of such breach from another party
(Notifying Party), then the Notifying Party may: |
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if the breach relates to a particular Electricity Hedging Agreement,
terminate the provisions of this Agreement to the extent they relate to that
Electricity Hedging Agreement; or |
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(b) |
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terminate this Agreement, |
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in each case by giving 15 days prior written notice to the Defaulting Party. If a party
terminates the provisions of this Agreement to the extent they relate to a particular
Electricity Hedging Agreement, then neither party will be required to pay any amounts
which become payable after the date of termination under clause 4.2 or clause 4.3 in
respect of that particular Electricity Hedging Agreement. |
| 7.2 |
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Termination for insolvency |
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A party may terminate this Agreement immediately by notice in writing to the other
party if any step is taken to appoint a receiver, a receiver and manager, a provision
liquidator, a liquidator, an administrator or other like person of the whole or part of
that other party’s assets, operations or business, or any action is taken by any person
that is analogous to the foregoing. |
| 7.3 |
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Mutually agreed termination |
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The parties may mutually agree in writing to terminate this Agreement prior to the
expiry of the Term. |
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(a) |
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Either party may terminate this Agreement upon a change of control of either
party, with effect from the date on which such change of control occurs. |
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(b) |
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For the purposes of this Agreement, change of control means: |
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(i) |
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where a party ceases to be controlled directly or indirectly by
Mr. Graeme Xxxxxxx Xxxx; |
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(ii) |
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where there is a change in direct or indirect control of a
party (but, for the avoidance of doubt, if a party is controlled directly or
indirectly by Mr Graeme Xxxxxxx Xxxx, there will not be a change in control of
that party arising from any transfer or other transaction if, following that
transfer or transaction, that party continues to be controlled directly or
indirectly by Mr. Graeme Xxxxxxx Xxxx); |
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(iii) |
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a sale of the majority of the assets comprising the Whakatane Mill to a
third party who is not controlled directly or indirectly by Mr. Graeme Xxxxxxx
Xxxx; or |
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(iv) |
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a sale of the majority of the assets of CHH or WML to a third
party who is not controlled directly or indirectly by Mr. Graeme Xxxxxxx Xxxx. |
| 7.5 |
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Termination without prejudice |
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(a) |
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The termination of this Agreement will not of itself: |
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(i) |
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relieve a party of its obligation to pay any money outstanding
(that is property due under this Agreement) on the date of termination; |
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(ii) |
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constitute a waiver of any remedy to which a party may be
entitled in respect of any breach of this Agreement; or |
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(iii) |
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affect the rights and obligations of the parties, or relieve
them of any liability, in respect of prior events. |
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(b) |
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In the event the provisions of this Agreement are only terminated to the
extent they relate to a particular Electricity Hedging Agreement, clause 7.5(a) will
be applied in respect of that Electricity Hedging Agreement and the rights and
obligations of the parties under this Agreement in respect of any other Electricity
Hedging Agreement will be unaffected. |
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This Agreement may not be assigned by either party without the prior written consent
of the other party. Such consent can be withheld by a party at that party’s sole
discretion. |
| 9. |
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Dispute resolution process |
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If any dispute arises between the parties under or in connection with this Agreement: |
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the dispute must initially be referred to the parties’ respective nominated
representatives who are responsible for the management of this Agreement; |
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(b) |
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the representatives must then use their reasonable endeavours to resolve
the dispute; and |
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if the parties’ representatives are unable to resolve the dispute within 30
days of the referral, or such other period as is agreed in writing, the dispute must
be referred to the parties’ respective Chief Executives who will use their reasonable
endeavours to resolve the dispute within 10 days. |
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If the dispute cannot be resolved by the parties’ respective Chief Executives within
the time period specified in clause 9.1(c), either party may require the dispute to be
referred to an Independent Expert as defined in clause 9.4. The Independent Expert’s
decision will be final and binding on the parties, save for manifest error. |
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XXXX GULLY
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The parties will hold confidential, unless otherwise required by law or at the
direction of a court of competent jurisdiction, all information relating to the subject
matter of the dispute as disclosed during or for the purposes of dispute resolution under
this clause 9. |
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The independent Expert will be appointed in accordance with the following provisions: |
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(a) |
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the Independent Expert will be appointed by both parties or, where the
parties cannot agree within 10 Business Days, appointed by the President of the New
Zealand Law Society; |
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(b) |
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the Independent Expert will act as an expert and not as an arbitrator and
the law relating to arbitration will not apply to the Independent Expert’s
determination; and |
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(c) |
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the costs and expenses of the Independent Expert will be shared by the
parties equally. |
| 10. |
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Confidential Information |
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Each party acknowledges that it may during the Term receive Confidential Information
from the other party. Each party will treat all Confidential Information as confidential
and must not: |
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(a) |
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disclose the Confidential Information to any person (except the parties’
employees, contractors, agents and advisers and then only to such extent as may be
required to enable the relevant parties to comply with the provisions of this
Agreement); |
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(b) |
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use or exploit the Confidential Information other than for the purpose for
which it has been provided to the relevant party pursuant to this Agreement; or |
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(c) |
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make any public disclosure or announcement of this Agreement or its terms, |
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without the prior written consent of the other party. The obligations imposed by this
clause survive the termination of this Agreement. |
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The obligations of confidentiality under clause 10.1 do not apply to the extent that: |
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(a) |
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disclosure of Confidential Information is required by law or by the listing
requirements of any relevant stock exchange; |
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(b) |
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Confidential Information is, or becomes, available in the public domain
without breach by a party of its confidentiality obligations (including under this
Agreement); or |
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(c) |
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disclosure is necessary to obtain the benefits of, and fulfil obligations
under, this Agreement. |
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Any notice or other communication (including any request, demand, consent or approval)
to or by a party to this Agreement: |
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may be given by personal service, post, facsimile or email; |
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must be in writing, legible and in English addressed as shown below: |
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(i) |
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Xxxxxx Xxxx Xxxxxx Limited |
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Address:
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Physical Address |
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Kinleith Site |
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State Highway 1 |
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Kinleith |
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Tokoroa 3491 |
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Xxxxxx Xxxxxxx |
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Xxxxxxx Xxx 0 |
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Xxxxxxx 0000 |
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Xxxxxxxxx:
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Xxxx Xxxxxx |
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Telephone:
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00 000 0000 |
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Facsimile:
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07 886 3614 |
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Email:
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Xxxx.Xxxxxx@xxx.xx.xx |
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Copy to each of the persons named below: |
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Address:
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000 Xxxxxxx Xxxxxxx Xxxx |
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Xx Xxxxxx |
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Private Bag 92-106 |
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Xxxxxxxx 0000 |
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Attention:
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Business Legal Counsel — Pulp, Paper and Packaging |
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Facsimile:
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09 633 0601 |
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Rank Group Limited |
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Address:
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Xxxxx Xxxx |
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000 Xxxx Xxxxxx |
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PO Box 3515 |
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Auckland |
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Attention:
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Xxxx Xxxx |
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Facsimile:
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09 366 6263 |
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Email:
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Xxxx.Xxxx@xxxxxxxxx.xx.xx |
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Rank Group Limited |
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Address:
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Xxxxx Xxxx |
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000 Xxxx Xxxxxx |
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PO Box 3515 |
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Auckland |
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Attention:
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Xxxxx Xxxxxxx |
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Facsimile:
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09 366 6263 |
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Email:
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Xxxxx.Xxxxxxx@xxxxxxxxx.xx.xx |
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(ii) |
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Whakatane Mill Limited |
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Address:
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Mill Road |
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Whakatane |
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Attention:
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Xxxxxx Xxxxxx |
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Telephone:
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00 000 0000 |
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Facsimile:
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07 306 3655 |
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Email:
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Xxxxxx.Xxxxxx@xxx.xx.xx |
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Copy to each of the persons named below: |
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SIG Group |
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Address:
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Xxxxxxxxxxx 00 XX-0000 Xxxxxxxxx xx Xxxxxxxxx |
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Xxxxxxxxxxx |
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Attention:
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Xxxxx Xxxxxxxxx |
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Facsimile:
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0041 52 674 7200 |
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Email:
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Xxxxx.Xxxxxxxxx@xxx.xxx |
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SIG Group |
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Address:
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Xxxxxxxxxxx 00 XX-0000 Xxxxxxxxx xx Xxxxxxxxx |
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Xxxxxxxxxxx |
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Attention:
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Xxxxxx Xxxxxxxxxxx |
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Facsimile:
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0041 52 674 6556 |
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Email:
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Xxxxxx.Xxxxxxxxxxx@xxx.xxx |
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or to any other address last notified by the party to the sender by notice given in
accordance with this clause 11.1; |
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in the case of a corporation, must be signed by an officer or authorised representative of
the sender; and |
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is deemed to be given by the sender and received by the addressee: |
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(i) |
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Delivery |
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if delivered in person, when delivered to the addressee; |
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(ii) |
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Post |
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if sent by post, on the third Business Day after posting if posted in New Zealand, or
on the seventh Business Day if posted to or from a place outside New Zealand, in each
case from and including the date of postage; |
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(iii) |
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Facsimile |
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if sent by facsimile transmission, on the date and time shown on the transmission
report by the machine from which the facsimile was sent which indicates that the
facsimile was sent in its entirety and in legible form to the facsimile number of the
addressee notified for the purposes of this clause 11.1; or |
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(iv) |
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Email |
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if sent by email, on the date and time at which it enters the addressee’s
information system (as shown in a confirmation of delivery report from the
sender’s information system, which indicates that the email was sent to the
email address of the addressee notified for the purposes of this clause 11.1), |
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but if the delivery or receipt is on a day which is not a Business Day or is after 5.00 pm
(addressee’s time), it is deemed to have been received at 9.00 am on the next Business
Day. |
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A notice or communication given in accordance with clause 11.1 can be relied on by the
addressee and the addressee is not liable to any other person for any consequences of that
reliance if the addressee believes it to be genuine, correct and authorised by the sender. |
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No waiver by either party (the Waiving Party) of any provision of or right, remedy or
power of the Waiving Party under this Agreement, is to be effective unless it is in
writing signed by the Waiving Party and any such waiver is to be effective only in the
specific instance and for the specific purpose for which it is given. No failure or delay
by a party to exercise any right, remedy or power under this Agreement or to insist on
strict compliance by the other party with any obligation under this Agreement, and no
custom or practice of the parties at variance with the terms of this Agreement, will
constitute a waiver of the right of that party to demand exact compliance with this
Agreement. |
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If any provision of this Agreement is, or becomes, unenforceable, illegal or invalid
for any reason, the relevant provision is to be deemed to be modified to the extent
necessary to remedy such unenforceability, illegality or invalidity or if this is not
possible then such provision must be severed from this Agreement, without affecting the
enforceability, legality or validity of any other provision of this Agreement. |
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Each party will make all applications, execute all documents and do or procure all
other acts and things reasonably required to implement and to carry out its obligations
under, and the intention of, this Agreement. |
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This Agreement contains the entire understanding between the parties concerning the
subject matter of this Agreement and supersedes and cancels any previous agreements,
understandings or arrangements (whether written or oral) between the parties. |
| 12.5 |
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Amendment and variations |
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This Agreement cannot be amended or varied except in writing signed by the parties. |
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| 12.6 |
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Governing law and jurisdiction |
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This Agreement is governed by the laws of New Zealand and the parties submit to the
non-exclusive jurisdiction of the courts of New Zealand in respect of any dispute or
proceeding arising out of this Agreement, |
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(a) |
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This Agreement may be executed in any number of counterparts each of which is to
be deemed an original, but all of which together will constitute a single instrument. |
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(b) |
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A party may enter into this Agreement by executing any counterpart. |
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(c) |
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This Agreement may be executed on the basis of an exchange of facsimile
copies and execution of this Agreement by such means is to be a valid and sufficient
execution. |
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Execution
Executed as an agreement.
Executed by Xxxxxx Xxxx Xxxxxx
Limited
/s/ Xxxxx X. Xxxxxxx
Authorised Signatory
XXXXX X. XXXXXXX
Print Name
Executed by Whakatane Mill
Limited
/s/ Xxxxx X. Xxxxxxx
Authorised Signatory
XXXXX X. XXXXXXX
Print Name
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