EXHIBIT 4.23
WOOD SUPPLY AGREEMENT
BETWEEN
UBS MANGAKAHIA FOREST VENTURE LTD
AND
▇▇▇▇▇▇▇▇ CHALLENGE FORESTS INDUSTRIES LIMITED
[▇▇▇▇▇▇▇ GRIERSON LOGO]
Wood Supply Agreement Page i
TABLE OF CONTENTS
1. INTERPRETATION............................................................................... 1
2. AGREEMENT TO SELL AND PURCHASE............................................................... 6
3. PRICE........................................................................................ 7
4. HARVEST PLANNING............................................................................. 9
5. TRANSITIONAL ARRANGEMENTS.................................................................... 11
6. USE OF DAMAGED WOOD.......................................................................... 12
7. PAYMENT...................................................................................... 13
8. RISK AND TITLE............................................................................... 14
9. HARVESTING OBLIGATIONS....................................................................... 14
10. ACCESS....................................................................................... 15
11. RELATIONSHIP MANAGEMENT...................................................................... 15
12. REVIEWS AND INSPECTION....................................................................... 15
13. REPRESENTATIONS AND WARRANTIES............................................................... 16
14. DAMAGE....................................................................................... 17
15. LIABILITY AND INDEMNITY...................................................................... 18
16. FORCE MAJEURE................................................................................ 19
17. ASSIGNMENT................................................................................... 20
18. RESOLUTION OF DISPUTES....................................................................... 20
19. TERMINATION AND SUSPENSION................................................................... 21
20. CONFIDENTIALITY.............................................................................. 23
21. SEVERABILITY................................................................................. 24
22. LIMITED RECOURSE............................................................................. 24
23. APPLICABLE LAW............................................................................... 25
24. NOTICES...................................................................................... 25
25. COPIES OF NOTICES............................................................................ 27
26. THIRD PARTY NOTICES.......................................................................... 27
27. ENTIRE AGREEMENT............................................................................. 27
28. MODIFICATION................................................................................. 27
29. WAIVER....................................................................................... 28
30. COUNTERPARTS................................................................................. 28
31. FURTHER ASSURANCES........................................................................... 28
32. NO MERGER.................................................................................... 28
33. COSTS........................................................................................ 28
34. NO PARTNERSHIP............................................................................... 28
35. GOODS AND SERVICES TAX....................................................................... 29
APPENDIX 1 Map of Supply Region
APPENDIX 2 Forestry Right
THIS AGREEMENT is dated the day of 2003
BETWEEN UBS MANGAKAHIA FOREST VENTURE LTD an incorporated company
having its registered office at Auckland ("UBS Mangakahia")
AND ▇▇▇▇▇▇▇▇ CHALLENGE FORESTS INDUSTRIES LIMITED an incorporated
company having its registered office at Auckland ("FCF")
BACKGROUND
A. FCF is a New Zealand registered company holding a leadership position
in New Zealand's forest industries.
B. UBS Mangakahia will acquire the Trees and the Forestry Right. UBS
Mangakahia is exclusively advised and managed by UBS Timber Investors
(a division of UBS Global Asset Management New York, Inc, a portion of
the asset management division of UBS AG).
C. FCF and Teal 4 Limited have entered into a Sale and Purchase Agreement
under which FCF will sell the Trees to UBS Mangakahia (as Teal 4
Limited's nominee under the Sale and Purchase Agreement) and create the
Forestry Right over the Land to be registered pursuant to the Forestry
Rights Registration ▇▇▇ ▇▇▇▇.
D. On settlement of the Sale and Purchase Agreement FCF and UBS Mangakahia
are required to execute and deliver this agreement, and the
Infrastructure Agreement which will set out further arrangements
between the parties in relation to the supply of certain Trees to FCF
and access to the Land together with the Management Agreement relating
to the management of the Trees by FCF on behalf of UBS Mangakahia.
E. UBS Mangakahia will be granted rights to the Trees pursuant to the
Forestry Right and has agreed to enter into a stumpage sale of certain
of those Trees to FCF, on the terms set out herein.
THE PARTIES AGREE:
1. INTERPRETATION
In this agreement unless the context indicates otherwise:
1.1 DEFINITIONS:
"AFFILIATE" of a person shall mean a person controlled by,
controlling or under common control with, such person and for
the purposes of this
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definition Forestry Corporation of New Zealand Limited (In
Receivership) is not an Affiliate of any party;
"▇▇▇▇ RATE" means the average of the ▇▇▇▇ rates for 90-day
bank accepted bills of exchange, expressed as a percentage per
annum as quoted on Reuters page BKBM (subject to manifest
error) as fixed at 10:45 am on each Business Day following the
due date;
"BUSINESS DAY" means a day on which registered banks are open
for business in Auckland excluding Saturdays, Sundays and
public holidays;
"CPI" means the Consumer Price Index (All Groups) or any index
in substitution for it published by the Department of
Statistics or other government agency;
"COMMENCEMENT DATE" means the date of Settlement as that term
is defined in the Sale and Purchase Agreement being the date
of this agreement;
"CONFIDENTIAL INFORMATION" means any information:
(a) relating to the terms of this agreement excluding
Working Block(s), PHI, price information and other
information related to sales of stumpage and logs
from the Stands; or
(b) disclosed by either party to the other party on the
express basis that such information is confidential;
provided that, where information relates exclusively to one
party, nothing in this agreement will require the other party
to maintain confidentiality in respect of that information;
"DEFAULT INTEREST RATE" means interest calculated at the ▇▇▇▇
Rate plus 4% per annum;
"ENCUMBRANCE" means a mortgage, lien, charge, pledge, title
retention, caveat, option, right of pre-emption, tenancy,
third party right, or security interest of any kind;
"EXPIRY DATE" means the date on which the Forestry Right
terminates in respect of the last of the Harvest Areas;
"FORESTRY CONSULTANT" means a reputable forestry expert with
relevant experience;
"FORESTRY RIGHT" means the forestry right to be entered into
between UBS Mangakahia and FCF concurrently with this
agreement in accordance with
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the Forestry Rights Registration Act 1983 and in relation to
certain identified Stands, a copy of which is attached as
Appendix 2;
"FOREST ROADS" has the meaning given to that term in the
Infrastructure Agreement;
"GST" means goods and services tax levied in accordance with
the GST Act and includes any tax levied in substitution for
such tax and excludes any penalties and interest;
"GST ACT" means the Goods and Services Tax ▇▇▇ ▇▇▇▇;
"HARVEST AREA" means those of the Working Blocks that FCF
wishes to purchase in accordance with clauses 4.2 and 5.1.2;
"HARVEST PERIOD" means the 12 Month period from 1 July in any
given year until 30 June in the following year;
"HARVEST PLAN" means the harvest plan for each Harvest Period
provided by UBS Mangakahia to FCF pursuant to clause 4.1;
"HARVEST PLAN MAP" means the map delineating the boundaries of
the Harvest Area for each Harvest Period prepared by UBS
Mangakahia;
"INFRASTRUCTURE AGREEMENT" means the infrastructure agreement
entered into between UBS Mangakahia and FCF concurrently with
this agreement in relation to the provision of certain
services by FCF;
"INSOLVENCY EVENT" means with respect to a company when:
(a) an application is made to a court for an order and an
order is duly made appointing a liquidator,
provisional liquidator, interim liquidator, receiver,
manager, receiver and manager, administrator,
administrative receiver, trustee in administration,
statutory manager or similar officer in respect of
the company or one of them is appointed;
(b) the members of the company pass a special resolution
or the board of the company resolves to appoint a
liquidator or formal notice of a proposed resolution
to do so is given or any other steps are taken
evidencing an intention to do so;
(c) the company stops or threatens to stop payment of
creditors generally or is deemed to be unable to pay
its debts as they fall due, has a compromise proposed
in respect of it, commences negotiations with any one
or more of its creditors with a view to the general
readjustment or rescheduling of its indebtedness,
makes a
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general assignment for the benefit of or a
composition with its creditors or proposes a
reorganisation, moratorium or other administration
involving them;
(d) execution issued against the company in respect of a
judgment debt has been returned unsatisfied in whole
or in part;
(e) a statutory demand is served on the company for an
amount exceeding 1% of its gross assets as shown in
the accounts of the company for the most recently
completed financial year of the company and expires
unremedied unless such statutory demand relates to an
amount which is the subject of a bona fide dispute by
the company; or
(f) a creditor of the company, which creditor's rights
are intended to be subordinate to the obligations of
the company under this agreement, attempts to
exercise any rights or to gain any specific rights
which would impinge upon UBS Mangakahia's rights
under the Forestry Right;
other than where, in the case of any of the events referred to
in subclauses (a) to (f) above, such event takes place for the
purposes of and is followed by a reconstruction, amalgamation
or reorganisation (not involving or arising out of insolvency)
approved in writing by the other party which consent is not to
be unreasonably or arbitrarily withheld or delayed;
"LAND" means the land the subject of the Forestry Right and
more particularly comprised and described in the Forestry
Right;
"MANAGEMENT AGREEMENT" means the management agreement to be
entered into between UBS Mangakahia and FCF concurrently with
this agreement pursuant to which FCF will manage the Tauhara
forest;
"MONTH" means a calendar month;
"PHI" means a pre-harvest inventory, being the random sampling
of Stands using MARVL (or the equivalent) assessment
methodology to defined levels of precision using current
standard industry grades applicable to the Supply Region at
the time;
"PRUNED LOG" means a log where the branches were pruned at a
sufficiently young age to provide a sheath of clear wood (knot
free timber) in the log;
"PRUNED STAND" means a Stand containing 10% or more of the TRV
as Pruned Logs;
"PURCHASE WINDOW" means the period commencing on the
Commencement Date and terminating on the Expiry Date unless
extended by agreement;
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"QUARTER" means a calendar quarter ending on 31 March, 30
June, 30 September and 31 December in each Harvest Period
during the Purchase Window;
"RELATED AGREEMENTS" means the Forestry Right, the
Infrastructure Agreement, the Sale and Purchase Agreement and
the Management Agreement;
"REMAINING STANDS" means those Stands which remain subject to
the Forestry Right, as determined in accordance with the
Forestry Right, at the end of each Quarter;
"SALE AND PURCHASE AGREEMENT" means the sale and purchase
agreement entered into between Teal 4 Limited and FCF on 15
January 2003 (as may be amended by any deed(s) of amendment)
pursuant to which FCF will sell the Trees to UBS Mangakahia
(as Teal 4 Limited's nominee under that agreement) and create
the Forestry Right;
"STAND" means those parts of the Land comprising specific
plantation areas of the age class, area and silvicultural
condition described in the Forestry Right;
"SUPPLY REGION" means the area shown on the map in Appendix 1;
"TREES" means those Pinus radiata trees growing, standing or
lying on the Stands as at the date of Settlement of the Sale
and Purchase Agreement and any logs or forest produce arising
from such trees;
"TRV" means the total recoverable volume of logs (measured in
cubic metres) that is estimated to be available for harvest
from a Stand as set out in any Harvest Plan;
"WORKING BLOCK" means those Trees in a Stand (or part of a
Stand) which UBS Mangakahia proposes to harvest or is
harvesting in any Harvest Period in accordance with a Harvest
Plan;
1.2 PARTIES: references to parties are references to parties to
this agreement;
1.3 PERSONS: references to persons shall be deemed to include
references to individuals, companies, corporations, firms,
partnerships, joint ventures, associations, organisations,
trusts, states or agencies of state, government departments
and municipal authorities or other regulatory bodies or
regulatory authorities in each case whether or not having
separate legal personality;
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1.4 DEFINED EXPRESSIONS: expressions defined in the main body of
this agreement bear the defined meaning in the whole of this
agreement including the recitals;
1.5 CLAUSES AND BACKGROUND: references to clauses and the
background are references to clauses and the background to
this agreement unless otherwise indicated;
1.6 HEADINGS: section, clause and other headings are for ease of
reference only and shall not be deemed to form any part of the
context or to affect the interpretation of this agreement;
1.7 SINGULAR AND PLURAL: words importing the singular number shall
include the plural and vice versa;
1.8 APPENDICES: the appendices to this agreement shall have the
same effect as if set out in the body of this agreement;
1.9 NEGATIVE OBLIGATIONS: any obligation not to do anything shall
be deemed to include an obligation not to suffer, permit or
cause that thing to be done;
1.10 GENDER: words importing one gender shall include the other
genders;
1.11 STATUTES AND REGULATIONS: references to a statute include
references to regulations, orders or notices made under or
pursuant to such statute or regulations made under the statute
and references to a statute or regulation include references
to all amendments to that statute or regulation whether by
subsequent statute or otherwise and a statute or regulation
passed in substitution for the statute or regulation referred
to as incorporating any of the provisions; and
1.12 NEW ZEALAND DOLLARS: all monetary amounts are payable in New
Zealand dollars.
2. AGREEMENT TO SELL AND PURCHASE
2.1 SALE AND PURCHASE: UBS Mangakahia agrees to sell and FCF
agrees to purchase all Trees on the Harvest Area and all Trees
referred to in clause 5, in each case during the Purchase
Window on the terms set out in this agreement.
2.2 PURCHASE PRICE FOR TREES FIXED: The purchase price for the
Trees will be a lump sum amount for each Working Block which
shall be calculated as the sum of the multiplication of the
price for each log grade (as determined by a Forestry
Consultant in accordance with clause 3) by the total Working
Block volume for each log grade (being the sum of the PHI
volume adjusted for forest growth in accordance with clause 7
between the date of the PHI
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and the first day of the relevant Quarter nominated for
harvesting). For the avoidance of doubt, the parties agree
that the lump sum amount for each Working Block, as set in
accordance with clauses 3, 7.1 and 7.2, is irrespective of log
grades actually extracted by FCF.
3. PRICE
3.1 PRINCIPLE OF AND PROCEDURE FOR CALCULATION: The principle on
which the price of the Trees to be paid by FCF to UBS
Mangakahia shall be that such price shall be determined as
equivalent to the stumpage price that UBS Mangakahia would
have received if the volume purchased by FCF had been sold on
the open market by UBS Mangakahia. Such price shall be
calculated each Quarter in accordance with the following
provisions:
3.1.1 SET MARKET STUMPAGE: On or before the first day of
the Month 2 Months prior to the start of each Quarter
a Forestry Consultant will be appointed jointly by
UBS Mangakahia and FCF or, failing agreement, a
Forestry Consultant will be appointed by the
Chairperson of the Consultants' Committee of the New
Zealand Institute of Forestry. On or before the 20th
of the Month 2 Months prior to the start of the
Quarter, the Forestry Consultant will set the market
stumpage price by log grade (as set out in the PHI)
for the Trees for each Working Block. The Forestry
Consultant will advise both parties in writing for
each log grade, of the details of the market mix and
associated pricing and, when applicable, costs of
cartage, logging and loading.
3.1.2 FACTORS FOR CONSIDERATION: In setting the market
stumpage price for the Trees for any particular
Quarter the Forestry Consultant shall have regard to:
(a) SUBMISSIONS: open submissions from FCF and
UBS Mangakahia on market prices, log
quality, recoverable volume, relevant market
conditions impacting on optimum grade
recovery, relevant cartage costs, all
relevant extraction costs and the costs of
bring the product to market;
(b) TREE SALES: actual arms length third party
sales of Trees, including sales to FCF,
supplied by UBS Mangakahia to the Forestry
Consultant on a confidential basis;
(c) MARKET INFORMATION: the Forestry
Consultant's own market information;
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(d) VOLUME: the volume to be harvested and the
relative proportions of different log grades
as determined by the PHI's;
(e) MARKET PRICES: the prevailing market prices
for logs in the domestic and export markets
and sourced from Supply Region forests,
including prices paid by traders for supply
to the export market; and
(f) RISK FACTORS: the potential risk in terms of
grade, volume and other cost variations.
3.1.3 COST OF FOREST ROADS WHERE FCF IS THE PROVIDER OF
INFRASTRUCTURE SERVICES: FCF acknowledges that the
Purchase Price under the Sale and Purchase Agreement
included an amount effectively representing a
prepayment for the cost of the provision of Forest
Roads. Accordingly, for so long as FCF is the
provider of Forest Roads, at its cost, pursuant to
clause 2.8 of the Infrastructure Agreement, there
shall be no deduction for the cost of FCF providing
such Forest Roads when deriving the market stumpage
price.
3.1.4 COST OF FOREST ROADS WHERE FCF IS NOT THE PROVIDER OF
INFRASTRUCTURE SERVICES: Where FCF is not the
provider of Forest Roads, at its cost, pursuant to
clause 2.8 of the Infrastructure Agreement, then the
costs to UBS Mangakahia of such Forest Roads
(provided such costs have been reasonably incurred
consistent with clauses 2.2 and 2.4 of the
Infrastructure Agreement) will be added to the market
stumpage price as derived in clauses 3.1.1, 3.1.2 and
3.1.3 above.
3.1.5 DECISION FINAL: The assessments made by the Forestry
Consultant shall be final and binding on the parties
and clause 18 shall not apply to such assessments.
3.2 CALCULATION UNCOMPLETED: Notwithstanding clause 3.1.1, where a
calculation is uncompleted at the start of a Quarter, then:
3.2.1 PAYMENT AND PRICES: Pending completion of the
calculation, payment shall be made at prices by log
grade for the Quarter being the prices for those log
grades set by the Forestry Consultant at the previous
Quarter.
3.2.2 COMPLETION OF THE CALCULATION: On completion of the
Forestry Consultant's assessment, the Forestry
Consultant will advise the parties in writing of the
market stumpage price by log grade (as set out in the
PHI) for the Trees for each Working Block to apply
for
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the particular Quarter. Within 10 Business Days of
being advised by the Forestry Consultant, UBS
Mangakahia shall undertake the calculation in
accordance with clauses 7.1 and 7.2 and advise FCF in
writing. Within 15 Business Days of such advice,
either UBS Mangakahia shall refund any over-payment
to FCF together with a credit note for any excess GST
previously paid by FCF or FCF shall pay any
deficiency to UBS Mangakahia and UBS Mangakahia will
forthwith issue a GST tax invoice for the deficiency.
Any such refund or payment shall bear interest
computed from the first day of the Quarter for which
the calculation was not completed until the date on
which such refund or payment is made in full.
Interest will be calculated daily:
(a) ▇▇▇▇ RATE: for the period from the first day
of the Quarter until the date due for the
payment, at the ▇▇▇▇ Rate; and
(b) DEFAULT INTEREST RATE: for the period from
the day following the due date until the
actual day of payment, at the Default
Interest Rate and will be compounded
monthly.
4. HARVEST PLANNING
4.1 CONFIRMATION OF WORKING BLOCKS: On or before 1 February in
each Harvest Period UBS Mangakahia shall provide to FCF a
Harvest Plan which shall notify FCF of those Working Blocks
which UBS Mangakahia proposes to harvest in the following
Harvest Period ("UBS Mangakahia's Notice") and which are
accordingly available for FCF to elect its Harvest Area.
Accompanying UBS Mangakahia's Notice shall be the PHI for
Working Block. To ensure that the sampled Trees can be
identified and audited UBS Mangakahia must make available to
FCF the plot data and plot locations used in calculating the
PHI to enable FCF to undertake an independent assessment of
the PHI. For the avoidance of doubt, the parties agree that
clause 18 does not apply to the PHI information referred to in
this sub-clause. Each Harvest Plan shall make available for
the relevant Harvest Period the following minimum volume:
UBS Mangakahia 4 Harvest Periods 1 and 2 No
minimum
Harvest Periods 3 to 5 100,000m(3)
Harvest Periods 6 plus No minimum
By way of explanation Harvest Period 4 commences on 1 July
2006 and ends on 30 June 2007.
4.2 FCF'S ELECTION: On or before 1 March in each Harvest Period
FCF shall notify UBS Mangakahia which of the Working Blocks
set out in UBS
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Mangakahia's Notice it wishes to purchase in the following
Harvest Period and the (not less than two) Quarters in which
it proposes to harvest each such Working Block ("FCF's
Notice"). The parties acknowledge that the volume of Trees in
the Harvest Area, plus any road line salvage volume for the
same Harvest Period, will not exceed 50% (or such greater
percentage as is reasonably acceptable to UBS Mangakahia to
enable allocation to FCF of entire Working Blocks) of the
total volume of the Working Blocks set out in UBS Mangakahia's
Notice.
4.3 HARVESTING BY FCF: FCF agrees that it shall not harvest a
Working Block in the Harvest Area in the following Harvest
Period unless and until it has paid for that Working Block in
full. UBS Mangakahia acknowledges that FCF is not obliged to
harvest any Working Block in the Harvest Area, either at any
particular time or at all.
4.4 EQUAL RIGHTS OF PARTICIPATION: The balance of the Working
Blocks in UBS Mangakahia's Notice that are not included in
FCF's Notice must be made available to the market by UBS
Mangakahia by way of a competitive sales process within which
FCF shall have equal rights of participation with the other
bidders to buy all or any of the balance.
4.5 CREATION OF HARVEST PLAN MAP: UBS Mangakahia shall make
available a Harvest Plan Map following receipt of FCF's Notice
and deliver to FCF a copy (in both electronic and paper form
if required by FCF) within twenty (20) Business Days of
receipt of FCF's Notice.
4.6 ARRANGEMENTS FOR THE FINAL HARVEST PERIOD BOND: Unless the
parties agree otherwise, the following arrangements shall
apply in respect of the final Harvest Period under the
Forestry Right.
4.6.1 UBS MANGAKAHIA'S BOND: On the first day of the first
Quarter of the final Harvest Period UBS Mangakahia
will pay to FCF a completion bond equal to the sum of
$200,000 increased by the change in the CPI expressed
as a percentage calculated from the nearest Quarter
either preceding or following the Commencement Date
to the nearest quarter date either preceding or
following the first day of the first Quarter of the
final Harvest Period ("UBS Mangakahia's Bond").
4.6.2 REPAYMENT OF BOND BY FCF: By the later of twenty (20)
Business Days after completion of harvesting as
advised by UBS Mangakahia in accordance with clause
12.1.2 of the Forestry Right, or five (5) Business
Days after determination in accordance with clause
4.6.3 below, of any disputed amounts payable to FCF,
FCF shall repay UBS Mangakahia's Bond to UBS
Mangakahia less any amounts that have either been
agreed between the parties as due by UBS Mangakahia
to FCF under the Forestry Right or have been
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determined to be owed by UBS Mangakahia to FCF
arising as a result of breaches of the Forestry
Right.
4.6.3 DISPUTES: If UBS Mangakahia disputes that an amount
is payable to FCF by UBS Mangakahia as a result of a
breach of the Forestry Right and the parties are
unable to reach agreement within five (5) Business
Days the determination is to be made by either the
award of an arbitrator or by court order (all rights
of appeal having either expired or been exhausted).
4.6.4 INTEREST: FCF will pay interest on the amount payable
to UBS Mangakahia (if any) at the ▇▇▇▇ Rate
calculated daily from the first day of the first
Quarter of the final Harvest Period until the date of
payment in full.
4.6.5 UBS MANGAKAHIA'S BOND INSUFFICIENT: In the event that
UBS Mangakahia's Bond is insufficient to satisfy the
amounts due to FCF, UBS Mangakahia agrees to
forthwith pay to FCF the amount due to FCF together
with interest from the due date for payment until the
date of payment in full such interest to be
calculated in accordance with clause 7.5. The
provision of UBS Mangakahia's Bond is without
prejudice to all other rights available to FCF under
this agreement or at law.
4.7 PRUNED STANDS: In any Harvest Period where the hectares of
Pruned Stands represent less than 80% of the total hectares of
the Harvest Plan for the Harvest Period, then the Harvest Area
that FCF shall be entitled to elect shall not contain more
than 50% of the hectares of the Pruned Stands within the
Harvest Plan for the relevant Harvest Period.
5. TRANSITIONAL ARRANGEMENTS
5.1 HARVEST PERIOD ONE: The parties agree that the following
transitional arrangements will apply in respect of harvest
planning for the Harvest Period beginning 1 July 2003 and
ending 30 June 2004 ("Harvest Period One").
5.1.1 CONFIRMATION OF WORKING BLOCKS: Within twenty (20)
days of Settlement (as defined in the Sale and
Purchase Agreement) UBS Mangakahia and FCF will meet
to discuss which of the Stands will be available as
Working Blocks for harvesting in Harvest Period One.
Within thirty-five (35) days of Settlement UBS
Mangakahia shall provide written confirmation to FCF
of the Working Blocks to be harvested in Harvest
Period One ("UBS Mangakahia's Transitional Notice").
5.1.2 FCF'S ELECTION: Within seventy five (75) days of
Settlement, FCF shall notify UBS Mangakahia which of
the Working Blocks
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confirmed as being available for harvesting in UBS
Mangakahia's Transitional Notice it wishes to
purchase and the (not less than two) Quarters in
Harvest Period One in which it proposes to harvest
each such Working Block ("FCF's Transitional
Notice"). The parties acknowledge that the volume of
Trees in the Harvest Area, plus any road line salvage
volume in Harvest Period One, will not exceed 50% (or
such greater percentage as is reasonably acceptable
to UBS Mangakahia to enable allocation to FCF of
entire Working Blocks) of the total volume of the
Working Blocks set out in UBS Mangakahia's Notice.
5.1.3 HARVESTING BY FCF: Subject to clause 5.1.2, FCF
agrees that it shall not harvest a Working Block in
the Harvest Area in Harvest Period One unless and
until it has paid for that Working Block in full. UBS
Mangakahia acknowledges that FCF is not obliged to
harvest any Working Block in the Harvest Area, either
at any particular time or at all. The balance of the
Working Blocks in UBS Mangakahia's Transitional
Notice that are not included in FCF's Transitional
Notice must be made available to the market by UBS
Mangakahia by way of a competitive sales process
within which FCF shall have equal rights of
participation with the other bidders to buy all or
any of the balance.
5.1.4 CREATION OF HARVEST PLAN MAP: UBS Mangakahia shall
make available a Harvest Plan Map following receipt
of FCF's Transitional Notice in the manner set out in
clause 4.5.
5.2 HARVEST PERIOD TWO: The parties agree that clause 4 above will
apply to harvest planning for the period beginning 1 July 2004
and ending 30 June 2005 ("Harvest Period Two").
6. USE OF DAMAGED WOOD
If all or any part of the Land or Trees are damaged by fire, wind,
forest disease, flood or other cause the following shall apply.
6.1 FCF AGREES TO ADVISE: Both FCF and UBS Mangakahia agree to
promptly consult and liaise with each other to agree an
appropriate action plan consistent with the objectives of this
agreement. For the avoidance of doubt this does not oblige
either party to purchase the damaged Trees or any of them.
6.2 COMPETITIVELY OFFER WORKING BLOCKS: Following consultation
between the parties for a period of not less than ten (10)
Business Days, UBS Mangakahia may on whatever terms it
considers appropriate by way of a competitive sales process
offer any Working Blocks containing damaged Trees ("Damaged
Working Blocks") to the market. FCF will be entitled to
Wood Supply Agreement Page 13
enter the competitive bidding process for those Trees but will
not be entitled to any fixed volume of Trees from Damaged
Working Blocks offered by UBS Mangakahia.
7. PAYMENT
7.1 TAX INVOICE: Not less than one Month prior to the start of the
Quarter nominated in FCF's Notice or FCF's Transitional Notice
for harvesting of a Working Block in the Harvest Area, UBS
Mangakahia shall prepare and send to FCF a GST invoice for the
Trees in that Working Block which shall include any GST
payable in respect of the sale and purchase of Trees. The
invoice amount for each Working Block in the Harvest Area
shall be calculated using the invoice calculated price for the
Quarter by the Forestry Consultant pursuant to clause 2.2 and
3 and the volumes as determined in the PHI for that Working
Block to which is added forest growth between the date of the
PHI and the first day of the Quarter in which FCF's Notice or
FCF's Transitional Notice has nominated it wishes to harvest
that Working Block as determined in clause 7.2.
7.2 CALCULATION OF FOREST GROWTH: A Forestry Consultant, appointed
jointly by the parties in the manner set out in clause 3.1.1,
shall calculate forest growth for each Working Block in the
Harvest Area between the date of the PHI and the first day of
the Quarter referred to in clause 7.1 using the Y-T-Gen
methodology applicable to Tauhara forest using base data from
the PHI. The Forestry Consultant shall calculate the amount of
forest growth from which shall be deducted any event specific
loss since the date of the PHI, which loss must be
substantiated by FCF to the reasonable satisfaction of the
Forestry Consultant (after hearing submissions from UBS
Mangakahia) and shall be final and binding on the parties and
clause 18 shall not apply to such calculations.
7.3 PAYMENT OF INVOICE: Subject to clause 3.2, FCF shall pay each
invoice for the Trees in a Working Block in the Harvest Area
rendered in terms of clause 7.1 by the first day of the
Quarter nominated for that Working Block in FCF's Notice or
FCF's Transitional Notice (as the case may be) issued pursuant
to clauses 4.2 and 5.1.2 respectively.
7.4 NO CLAIM: FCF shall have no claim nor shall UBS Mangakahia
have any liability to FCF where FCF is subsequently prevented
from harvesting or using the then existing most practicable
and cost effective access route to harvest Trees (for whatever
reason including those matters set out in clause 5.15 of the
Forestry Right) which are the subject of FCF's Notice or FCF's
Transitional Notice as the context requires.
7.5 PAYMENT IN CLEARED FUNDS: Receipt of a cheque, ▇▇▇▇ of
exchange or other negotiable instrument will not constitute
payment of any amount under this agreement until the amount
represented by that cheque, ▇▇▇▇ of exchange
Wood Supply Agreement Page 14
or negotiable instrument has been received in full, in cleared
funds, by the intended payee.
7.6 DEFAULT INTEREST: If any amount falls overdue for payment
under this agreement, the overdue amount will (without
prejudice to any other right or remedy under this agreement)
bear default interest from the date on which payment of that
amount falls overdue until the date on which payment of the
overdue amount is made in full. Default interest will be
calculated daily at the Default Interest Rate and will be
compounded monthly.
8. RISK AND TITLE
8.1 RISK: Risk in each Tree in a Harvest Area elected by FCF in
FCF's Notice or FCF's Transitional Notice passes to FCF as
from the date on which payment of the GST invoice for the
Trees in the relevant Working Block is due.
8.2 TITLE: Title to a Tree in a Working Block in the Harvest Area
passes to FCF at the time of payment by FCF in full of the GST
invoice for that Working Block, pursuant to clause 7.3.
8.3 WARRANTIES AND UNDERTAKINGS: UBS Mangakahia warrants and
undertakes to FCF as follows.
8.3.1 LEGAL OWNER: As at the date that title to a Tree
passes to FCF UBS Mangakahia is the legal and
beneficial owner of the relevant Trees.
8.3.2 TITLE: Title in the Trees will pass to FCF free from
any Encumbrances created by UBS Mangakahia.
8.4 NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO SIZE: UBS
Mangakahia provides no warranty or representation to FCF with
respect to the size, quality or value of any Trees nor the
logging or other conditions that may exist in connection
therewith in the Harvest Areas.
8.5 NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO QUANTITY: UBS
Mangakahia makes no warranty or representation as to the
actual quantity of timber in the Harvest Area, the log grade
mix, or the harvest and extraction costs that may apply.
9. HARVESTING OBLIGATIONS
9.1 HARVESTING: FCF must:
9.1.1 PURCHASE: only purchase the Trees during the Purchase
Window in accordance with this agreement;
Wood Supply Agreement Page 15
9.1.2 REMOVAL: only remove Trees from the Harvest Area; and
9.1.3 PRE-HARVEST MEETING: meet with UBS Mangakahia at each
Working Block within the Harvest Area, for a
pre-harvest meeting before harvesting machinery is
used. The boundaries for the Harvest Area in any
Harvest Period shall be shown to a representative of
FCF by UBS Mangakahia. If the harvesting contractor
is changed before the completion of harvesting of the
Harvest Area or a new harvesting contractor is used,
FCF will advise UBS Mangakahia of the change in
harvesting contractor and take reasonable steps to
ensure the harvesting contractor understands the
boundaries of the Harvest Area.
9.2 RESTRICT ACCESS: FCF shall have the right to restrict access
to the Harvest Area during harvesting in accordance with good
forestry industry practice.
10. ACCESS
Subject to the terms of the Forestry Right, UBS Mangakahia grants FCF
and FCF's employees, agents and/or contractors, the right to enter and
re-enter the Land to access the Harvest Area at any time during the
term of this agreement, with or without vehicles, machinery and plant
of any kind, for the purpose of harvesting the Trees and removing the
timber from the Land.
11. RELATIONSHIP MANAGEMENT
If, in UBS Mangakahia's reasonable opinion, a person contracted to FCF
or employed by FCF is not appropriate, given either UBS Mangakahia's
responsibility to maximize its investment return from the Trees or its
obligations under this agreement or any Related Agreement, then UBS
Mangakahia shall advise FCF of its concerns. Thereafter the parties
will consult in good faith with a view to addressing UBS Mangakahia's
concerns. If after such consultation those concerns remain, in UBS
Mangakahia's reasonable opinion, then UBS Mangakahia may direct FCF to
end and FCF shall forthwith thereafter end the direct and indirect
involvement with UBS Mangakahia of that person.
12. REVIEWS AND INSPECTION
12.1 OBSERVATION AND INSPECTIONS: Where UBS Mangakahia has
reasonable grounds to believe its interests could be adversely
affected UBS Mangakahia shall, subject to reasonable
consultation with FCF, have the right to inspect or
investigate, at reasonable times and on reasonable notice, any
forest operational matters relating to this agreement.
12.2 PARTICIPATION AND REASONABLE ASSISTANCE: FCF shall provide all
reasonable assistance in respect of such investigations.
Wood Supply Agreement Page 16
13. REPRESENTATIONS AND WARRANTIES
13.1 FCF'S REPRESENTATIONS AND WARRANTIES: FCF represents and
warrants as follows.
13.1.1 DULY INCORPORATED: FCF is a company duly incorporated
and validly existing under the laws of New Zealand.
13.1.2 AUTHORITY: The execution, delivery and performance by
FCF of this agreement have been duly authorised by
all necessary action on its part, do not contravene
any law binding on FCF, do not contravene the
incorporation documents of FCF and do not contravene
the provisions of or constitute a default under any
other agreement to which FCF may be a party or by
which any of its assets may be bound.
13.1.3 CONSENTS, APPROVALS AND AUTHORISATIONS: It has
obtained or made all consents, approvals,
authorisations or orders of any court or governmental
authority or agency required on its behalf to be
obtained or made on or prior to the date of execution
of this agreement in connection with the execution
and delivery of this agreement and the performance by
it of its obligations hereunder.
13.1.4 LEGALLY BINDING: This agreement has been duly
executed and delivered by FCF and constitutes the
legal, valid and binding obligations of FCF,
enforceable against FCF in accordance with its terms.
13.1.5 NO ACTIONS OR PROCEEDINGS: There is no action, suit
or proceeding before any court or governmental agency
or authority now pending or, to the knowledge of FCF,
threatened against FCF which might adversely affect
the ability of FCF to perform its obligations under
this agreement.
13.2 UBS MANGAKAHIA'S REPRESENTATIONS AND WARRANTIES: UBS
Mangakahia represents and warrants as follows.
13.2.1 INCORPORATED COMPANY: UBS Mangakahia is a company
duly incorporated and validly existing under the laws
of the country of its incorporation.
13.2.2 AUTHORITY: The execution, delivery and performance by
UBS Mangakahia of this agreement have been duly
authorised by all necessary action on its part, do
not contravene any law binding on UBS Mangakahia, do
not contravene the incorporation documents of UBS
Mangakahia and do not contravene the provisions of or
constitute a default under any other agreement to
which UBS
Wood Supply Agreement Page 17
Mangakahia may be a party or by which any of its
assets may be bound.
13.2.3 CONSENTS, APPROVALS AND AUTHORISATIONS: It has
obtained or made all consents, approvals,
authorisations or orders of any court or
governmental authority or agency required on its
behalf to be obtained or made on or prior to the
date of execution of this agreement in
connection with the execution and delivery of
this agreement and the performance by it of its
obligation hereunder.
13.2.4 LEGALLY BINDING: This agreement has been duly
executed and delivered by UBS Mangakahia and
constitutes the legal, valid and binding
obligation of UBS Mangakahia, enforceable
against UBS Mangakahia in accordance with its
terms.
13.2.5 NO ACTIONS OR PROCEEDINGS: There is no action,
suit or proceeding before any court or
governmental agency or authority now pending or,
to the knowledge of UBS Mangakahia, threatened
against UBS Mangakahia which might adversely
affect the ability of UBS Mangakahia to perform
its obligations under this agreement.
14. DAMAGE
14.1 PRESERVE TREES: Where FCF is not the manager under the
Management Agreement, UBS Mangakahia will use its best
endeavors to preserve the state and condition of the Trees
once FCF has made an election in accordance with FCF's
Notice and FCF's Transitional Notice in clauses 4.2 and
5.1.2 and before risk in the Trees passes to FCF pursuant
to clause 8.1 in the same state and condition as at the
date of FCF's Notice, subject only to incremental growth in
the Trees or any event specific loss. Where the price has
already been calculated for the Trees in FCF's Notice in
accordance with clause 3.1, that price shall be adjusted
according to clause 7.2. In addition to the adjustment in
the price, if any of the Trees in FCF's Notice are
materially damaged or destroyed prior to risk passing to
FCF in accordance with clause 8.1, then provided UBS
Mangakahia has sufficient uncommitted Trees in the current
or next succeeding Harvest Period, the parties shall
negotiate with a view to agreeing a replacement volume of
Trees of similar quality, age class and silvicultural
condition.
14.2 DAMAGE BY FCF: If FCF damages or harvests Trees which are
not authorized to be harvested under this agreement then:
14.2.1 TREES BELONGING TO FCF: where the Trees belong
to FCF UBS Mangakahia has no liability; and
Wood Supply Agreement Page 18
14.2.2 TREES BELONGING TO UBS MANGAKAHIA OR ANOTHER BUYER:
where the Trees belong either to UBS Mangakahia or to
another buyer FCF must pay UBS Mangakahia on demand
as liquidated damages, an amount equal to:
(a) VOLUME: the volume of such logs that would
have been obtained from the Trees damaged as
estimated by UBS Mangakahia using generally
accepted professional forestry procedures
multiplied by
(b) WEIGHTED AVERAGE: 2 times the weighted
average stumpage rate applicable under this
agreement during the Quarter when the damage
occurs. The appropriate provisions of clause
3 and 7 will apply to these Trees.
14.2.3 NO LIABILITY: FCF shall have no liability under this
clause 14.2 if it has relied on information provided
by UBS Mangakahia that is incorrect which has
resulted in FCF harvesting Trees it was not
authorised to harvest.
14.3 DAMAGE BY UBS MANGAKAHIA OR ANOTHER BUYER: If UBS Mangakahia
or another third party buyer, authorised by UBS Mangakahia,
damages or harvests Trees which are not authorised to be
harvested under this agreement then:
14.3.1 TREES BELONGING TO UBS MANGAKAHIA: where the Trees
belong to UBS Mangakahia, FCF has no liability; and
14.3.2 TREES BELONGING TO FCF: where the Trees belong to
FCF, UBS Mangakahia must pay to FCF on demand as
liquidated damages, an amount calculated on the same
basis as in clause 14.2.2 above.
14.3.3 NO LIABILITY: UBS Mangakahia shall have no liability
under this clause 14.3 if it has relied on
information provided by FCF that is incorrect which
has resulted in UBS Mangakahia harvesting Trees it
was not authorised to harvest.
15. LIABILITY AND INDEMNITY
15.1 LIABILITY: Nothing expressed or implied in this agreement
shall confer any liability on either party (referred to in
this clause as the "First Party") in respect of any indirect,
consequential or special loss, damage, cost or expense,
including without limitation, loss of profits or savings of
any kind suffered or incurred by the other party as a direct
or indirect result of a breach by the First Party of any of
its obligations under this agreement.
Wood Supply Agreement Page 19
15.2 INDEMNITY: Subject to clause 15.1, each party (referred to in
this clause as the "First Party") shall at all times indemnify
the other party in respect of any loss, damage, cost or
expense, (including reasonable enforcement costs, whether
incurred on a solicitor and own client basis or otherwise)
directly suffered by the other party as a result of a breach
by the First Party of any of its obligations under this
agreement.
15.3 MITIGATION: Each party will take all reasonable steps to
mitigate any costs, damages, fines, penalties, loss or
expense, it may suffer.
15.4 NO DOUBLE CLAIMS: Neither party is entitled to claim more than
once in respect of any one matter giving rise to a claim under
this agreement or any of the Related Agreements.
16. FORCE MAJEURE
16.1 DELAY OR FAILURE TO PERFORM: No party shall be liable for
failure to perform or delay in performing hereunder if the
cause of such failure or delay is outside or beyond the
reasonable control of the party failing to perform (including
but without derogating from the generality of the foregoing:
fire, wind, flood, earthquake, volcanic eruption, public
disorders, riot, war, embargoes, transport restrictions and
forest fire prevention restrictions). For the purposes of this
clause the solvency of a party shall be deemed to be within
that party's reasonable control. Further nothing in this
section shall excuse payment of any money due or which becomes
due under this agreement where the obligation to pay arose
before the occurrence of the event of force majeure.
16.2 SUSPENSION OF PERFORMANCE LIMITED: Any suspension of
performance by reason of this section shall be limited to the
period during which the force majeure exists.
16.3 NOTICE: The party claiming force majeure shall as soon as
possible and in any event no later than five (5) Business Days
after the happening of the event causing the failure give
notice to the other of the happening of the event causing the
failure and shall furnish all available information detailing
the cause or event and give an estimate of the period of time
required to remedy the failure (if such remedy is deemed
practicable). Failure to give such notice shall prevent the
party from claiming that the event gives rise to force
majeure.
16.4 PRIOR OBLIGATIONS: No situation of force majeure pursuant to
this section shall relieve either party of any duty or
obligation under this agreement which relates to a period
prior to the existence of the situation of force majeure and
had arisen or been incurred prior to the existence of the
situation of force majeure.
Wood Supply Agreement Page 20
17. ASSIGNMENT
17.1 CONSENT: This agreement shall be binding on and inure to the
benefit of the parties, their respective successors and
permitted assigns. A party (the "Assignor") shall not transfer
or assign its right or interest in this agreement (in part or
whole) without the previous written consent of the other party
being had and obtained. Such consent is not to be arbitrarily
withheld.
17.2 DEED: In the case of request for assignment or transfer the
Assignor shall obtain the execution by the proposed assignee
of a deed of covenant to be prepared by the other party's
solicitors at the Assignor's costs whereby the proposed
assignee covenants with the other party to observe and perform
all the terms and conditions of this agreement to be observed
and performed on the part of the assignor.
17.3 FORESTRY RIGHT CONTEMPORANEOUS: For the avoidance of doubt,
the parties agree that if UBS Mangakahia transfers or assigns
its interest in the Forestry Right it must, contemporaneously
with that transfer or assignment, transfer or assign its
obligations under this agreement to that transferee or
assignee to ensure that FCF's rights under this agreement are
protected and to ensure that at all times the Forestry Right
and the obligations under this agreement are held by the same
party.
18. RESOLUTION OF DISPUTES
18.1 DISPUTE RESOLUTION: In the event of any dispute arising
between the parties in relation to this agreement, or any
matter arising from it the following provisions will apply.
18.1.1 NEGOTIATE: A party claiming that a dispute has arisen
concerning this agreement must give notice to the
other party specifying the matter in dispute. The
parties will use their best endeavours to resolve the
dispute by negotiation in good faith. The parties
will attend at least one meeting to discuss and
attempt to resolve the dispute as a condition
precedent to taking any other steps concerning the
dispute (including but not limited to commencing any
legal proceedings other than an application for
injunctive relief). The attendees at such meeting
will include the Managing Director of UBS Timber
Investors (or nominee) and the Chief Executive
Officer of ▇▇▇▇▇▇▇▇ Challenge Forests Limited (or
nominee). All discussions will be without prejudice
and will not be referred to in any later proceedings.
18.1.2 ARBITRATION: If the dispute cannot be resolved in
accordance with clause 18.1.1 within ten (10)
Business Days after the date of the notice referred
to in clause 18.1.1 then any party may then require
Wood Supply Agreement Page 21
(by written notice to the other party) the dispute to
be referred to arbitration. If this clause is invoked
then the following shall apply.
(a) ARBITRATION ACT: The dispute will be
referred to arbitration by a sole arbitrator
under the provisions of the Arbitration ▇▇▇
▇▇▇▇. The arbitrator will be agreed upon
between the parties within ten (10) Business
Days of written notice, or failing
agreement, by the President of the New
Zealand Law Society or its successor body,
or any nominee of the President. In either
case, the arbitrator must not be a person
who has participated in any informal dispute
resolution procedure in respect of the
dispute. Any party may request the
appointment of an expert to sit with the
arbitrator but any such expert shall have an
advisory role only and shall not have the
authority to make a binding decision. Each
of the parties may make submissions to the
arbitrator as to the relevant skills and
expertise of an appropriate expert, but the
selection of an appropriate expert is
ultimately at the arbitrator's sole
discretion.
(b) ARBITRATION IN NEW ZEALAND: The arbitration
will take place in New Zealand.
(c) AWARD FINAL: The award in the arbitration
including any award by the arbitrator of
costs will be final and binding on the
parties.
(d) AWARD OF INTEREST: The arbitrator may award
interest upon any amount due and payable
under his or her award at such rate and for
such period as he or she considers just,
down to the date of the award.
18.2 PARTIES TO CONTINUE TO PERFORM: Pending resolution of any
dispute or difference, the parties shall continue to perform
their respective obligations pursuant to the provisions of
this agreement.
18.3 INJUNCTIVE RELIEF: Nothing in this clause 18 will prevent any
party commencing proceedings for injunctive relief.
19. TERMINATION AND SUSPENSION
19.1 TERMINATION: This agreement may be terminated at any time and
with immediate effect by written notice by either party
(referred to in this clause as the "First Party") to the other
party (referred to in this clause as the "Second Party") if:
Wood Supply Agreement Page 22
19.1.1 BREACH: the Second Party breaches, and fails to
properly or promptly perform, any of its obligations
within twenty (20) Business Days after written notice
from the First Party specifying the breach and its
intention to terminate this agreement if such
obligation is not properly and promptly performed;
19.1.2 EVENT OF DEFAULT: if any one or more of the following
events occur:
(a) DISTRESS: distress is levied or a judgment
order or encumbrance is enforced, or becomes
enforceable, or can be rendered so by the
giving of notice, lapse of time or
fulfilment of any condition, against
substantially all of the Second Party's
property;
(b) INSOLVENCY EVENT: an Insolvency Event occurs
in respect of the Second Party;
(c) NOTICE FROM REGISTRAR: the Second Party
receives notice from the Registrar of
Companies (or a Deputy Registrar) under
section 30 of the Corporations
(Investigation and Management) ▇▇▇ ▇▇▇▇ or
the Securities Commission makes a
recommendation under section 38 of that Act
in respect of the Second Party; or
(d) OFFICIAL MANAGER: a person is appointed
under either section 179 of the Act or the
Corporations (Investigation and Management)
▇▇▇ ▇▇▇▇ to investigate any part of the
affairs of the Second Party.
19.2 CONSEQUENCES OF TERMINATION: Upon termination of this
agreement for any reason the provisions of clauses 15.1 to
15.4 (inclusive), 19.2 and 20.1 to 20.11 (inclusive), together
with those other provisions of this agreement which are
incidental to and required in order to give effect to those
clauses, shall remain in full force and effect.
19.3 INJUNCTIVE RELIEF OR SPECIFIC PERFORMANCE: Each of the parties
acknowledges and agrees that in the event of a breach of this
agreement, damages alone will be an insufficient remedy.
Accordingly, each of the parties further acknowledge that the
other party may be entitled to equitable relief, including
injunctive relief or specific performance, in the event of any
breach, or threatened breach of this agreement, in addition to
any and all other remedies available to it at law.
19.4 SUSPENSION: If any amounts have been determined to be owed by
FCF to UBS Mangakahia arising as a result of breaches of any
of the Sale and Purchase Agreement or the Related Agreements,
either by agreement
Wood Supply Agreement Page 23
between the parties, or by the award of an arbitrator or by
court order (all rights of appeal having either expired or
been exhausted), UBS Mangakahia may suspend this agreement
provided UBS Mangakahia has first given FCF written notice and
FCF has failed to pay the amounts determined to be owed by FCF
within ten (10) Business Days. Such suspension shall continue
until the amounts determined to be owed by FCF have been paid
in full. Such suspension shall not excuse payment of any money
due or which becomes due under this agreement where the
obligation to pay arose before the suspension. Further such
suspension shall not relieve either party of any duty or
obligation under this agreement which relates to a period
prior to the suspension and had arisen or been incurred prior
to the suspension.
20. CONFIDENTIALITY
Each party will maintain as confidential at all times, and will not at
any time, directly or indirectly:
20.1 DISCLOSE: disclose or permit to be disclosed to any person;
20.2 USE: use for itself; or
20.3 USE TO DETRIMENT: use to the detriment of the other party;
any Confidential Information except:
20.4 LEGAL REQUIREMENT: subject to clause 20.10, as required by law
or regulatory body (including any stock exchange);
20.5 PUBLIC KNOWLEDGE: as is already or becomes public knowledge,
otherwise than as a result of a breach by the party disclosing
or using that Confidential Information of any provision of
this agreement;
20.6 AUTHORISED: as authorised in writing by the other party;
20.7 LENDERS AND UNDERWRITERS: as required to communicate and make
disclosure to institutional lenders to and underwriters for,
or potential institutional lenders to and underwriters for,
FCF or UBS Mangakahia provided that the relevant party shall
ensure compliance by such persons with this clause 20 and
shall be liable for any breach of such obligations by such
persons and, in the case of potential institutional lenders or
underwriters, to procure the return of all such information if
the lending to or underwriting is not consummated;
20.8 AFFILIATES AND ADVISERS: as required to communicate and make
disclosure to Affiliates of the parties or the parties' or the
Affiliates' respective advisers who have a legitimate need to
know the information in order to perform activities connected
with this agreement or the Related
Wood Supply Agreement Page 24
Agreements, and provided that the relevant party shall ensure
compliance by such persons with this clause 20 and shall be
liable for any breach of such obligations by such persons;
20.9 OTHER: to the extent reasonably required by this agreement
(and, without limiting the effect of this clause, a party may
disclose Confidential Information only to those of its
officers, employees or professional advisers, on a "need to
know" basis, as is reasonably required for the implementation
of this agreement).
20.10 CONSULTATION: In the event that one party (the "First Party")
is required by law or stock exchange obligations to disclose
Confidential Information, such disclosure may be made only
after the other party (the "Second Party") has been notified
and, subject to timing obligations imposed by law or the
relevant stock exchange, has been given every reasonable
opportunity to consult with the First Party as to timing and
content of such disclosure. In consulting with the Second
Party, the First Party shall act in good faith and give
reasonable consideration to the Second Party's requests.
20.11 FCF'S SAFEGUARDS: If requested, FCF will document to the
reasonable satisfaction of UBS Mangakahia the internal
safeguards it will put in place to meet its confidentiality
obligations under this clause 20.
21. SEVERABILITY
Any provision of this agreement which is prohibited or unenforceable in
any jurisdiction shall be ineffective as to such jurisdiction to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this agreement or affecting the validity or
unenforceability of such provision in any other jurisdiction.
22. LIMITED RECOURSE
FCF undertakes and agrees as follows.
22.1 UBS MANGAKAHIA'S ASSETS: FCF will look only to the assets held
by UBS Mangakahia or the benefit of any insurance maintained
by UBS Mangakahia to satisfy the obligations or liabilities of
UBS Mangakahia to FCF hereunder or otherwise.
22.2 LIMITATION OF LIABILITY: None of the Affiliates of UBS
Mangakahia nor any of its respective officers, directors, or
employees, or holders of any securities or debt of UBS
Mangakahia shall be liable for the obligations of UBS
Mangakahia to FCF.
22.3 NO ACTIONS OR PROCEEDINGS: FCF shall not commence any action
or proceeding against any of the persons referred to in
subclause 22.2 for the purpose of enforcing the obligations of
UBS Mangakahia.
Wood Supply Agreement Page 25
23. APPLICABLE LAW
23.1 NEW ZEALAND LAW: The law applicable to this agreement
including all submissions to arbitration shall be the law of
New Zealand and the parties agree to submit to be bound by the
jurisdiction of the courts and tribunals of New Zealand.
23.2 NON EXCLUSIVE JURISDICTION: The submission to jurisdiction in
clause 23.1 does not (and is not to be construed to) limit the
rights of a party to take proceedings against the other party
in another court of competent jurisdiction, nor is the taking
of proceedings in one or more jurisdictions to preclude the
taking of proceedings in another jurisdiction, whether
concurrently or not.
24. NOTICES
24.1 DELIVERY OF NOTICE: All notices and other communications
required or permitted under this agreement shall be in
writing. Any written notice under this agreement must be
signed by a duly authorised senior representative of any party
giving the notice and will be deemed validly given if:
24.1.1 PERSONAL DELIVERY: delivered personally;
24.1.2 DOMESTIC POST: sent by prepaid post; or
24.1.3 FACSIMILE: sent by facsimile transmission,
addressed to the recipient at the address or facsimile number
set out below (as applicable) or to any other address or
facsimile number that a party may notify to the other parties
by like notice.
UBS MANGAKAHIA: if to UBS Mangakahia to:
UBS Mangakahia Forest Venture Ltd
C/- UBS Warburg NZ Equities Limited
▇ ▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
For: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇) ▇▇▇ ▇▇▇▇
With a copy to:
UBS Timber Investors
Trade Center, 4th Floor
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ Supply Agreement Page ▇▇
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For: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇ ▇▇▇▇
AND WITH COPY TO:
▇▇▇▇▇ ▇▇▇▇ LLP
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For: ▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
FCF: if to FCF, to:
▇▇▇▇▇▇▇▇ Challenge Forests Industries Limited
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Private Bag 92036
Auckland Mail Centre
Auckland
For: Company Secretary
Facsimile: (▇▇) ▇▇▇ ▇▇▇▇
With a copy to:
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PO Box 160
Auckland
For: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇) ▇▇▇ ▇▇▇▇
24.2 TIME OF RECEIPT: No written communication will be effective
until received. Without limiting any other ways for a party to
prove that another party has received a notice, a notice or
other written communication under this agreement, will be
treated as received:
24.2.1 PERSONAL DELIVERY: if delivered personally, when left
with an apparently responsible person at the
recipient's address;
24.2.2 PREPAID POST: if sent by prepaid post three (3)
Business Days (if posted within New Zealand to an
address in New Zealand), or ten
Wood Supply Agreement Page 27
(10) Business Days (if posted by prepaid airmail from
country to country) after the date of posting;
24.2.3 REGISTERED POST: if sent by registered post, on
acknowledgment of receipt by or on the recipient's
behalf;
24.2.4 AIR COURIER DELIVERY: if sent by air courier
delivery, on acknowledgment of receipt by or on the
recipient's behalf; or
24.2.5 FACSIMILE: if sent by facsimile, on the sender's
receipt of a transmission report indicating that the
facsimile was sent in its entirety to the recipient's
facsimile number,
but, if the delivery or receipt is not on a Business Day or
after 5.00pm (local time) on any Business Day, the notice will
be treated as received by the recipient at 9.00am (local time)
on the next Business Day.
25. COPIES OF NOTICES
If a party is required by any term of this agreement to give a copy of
a notice or other communication to a third party, the failure to give
the copy of it to the third party will not affect the effectiveness of
that notice or communication to a party.
26. THIRD PARTY NOTICES
Each party shall promptly provide to the other party a copy of every
notice it receives from a third party in respect of the Land to the
extent that it is relevant to this agreement and/or Related Agreement
or Trees or any part thereof. Notwithstanding the above, the provisions
of this clause shall not apply to any notice received by any party from
any Affiliate of such party.
27. ENTIRE AGREEMENT
This agreement together with the Sale and Purchase Agreement, Forestry
Right, Infrastructure Agreement and Management Agreement contain the
entire agreement between the parties in connection with the subject
matter hereof and supersede and replace all prior negotiations,
agreements or representations, whether oral or written, between them
with respect thereto.
28. MODIFICATION
This agreement may not be amended or modified except by written
agreement signed by the parties.
Wood Supply Agreement Page 28
29. WAIVER
No provision of this agreement may be waived except in writing by the
party granting the waiver and then only in the specific instance and
for the specific purpose for which given.
30. COUNTERPARTS
30.1 GENERAL: This agreement may be executed in one or more
counterparts, each of which will be deemed to be an original,
but all of which together will constitute only one and the
same agreement.
30.2 FACSIMILE EXCHANGE: The parties acknowledge that this
agreement may be executed on the basis of any exchange of
facsimile copies and confirm that their respective execution
of this agreement by such means shall be a valid and
sufficient execution. The parties acknowledge that any
execution of this agreement by facsimile will be followed by
execution of the engrossments of this agreement.
31. FURTHER ASSURANCES
The parties shall execute and deliver such further and other documents
and instruments and do such other things as may be reasonably necessary
to implement and carry out the intent and purpose of this agreement.
32. NO MERGER
The parties acknowledge that the covenants, representations,
undertakings and agreements contained herein shall, to the extent that
they are still applicable, not merge upon completion of harvesting of
the Trees and that the same shall endure for the benefit of that party
entitled thereto notwithstanding transfer or any other act pursuant to
the provisions of this agreement.
33. COSTS
Except as expressly provided elsewhere in this agreement, each party is
to bear its own costs in connection with the preparation, negotiation
and execution of this agreement and the Related Agreements and any
other documentation contemplated by this agreement.
34. NO PARTNERSHIP
None of the provisions of this agreement are deemed to constitute a
partnership or joint venture between the parties and neither party has
any authority to bind or to pledge the credit of the other party in any
way except as expressly provided in this agreement.
Wood Supply Agreement Page 29
35. GOODS AND SERVICES TAX
A party must pay GST on a taxable supply made to it under this
agreement, in addition to any consideration (excluding GST) that is
payable for that taxable supply. The party making the taxable supply
must provide a valid tax invoice to the other party at or before the
time that the other party is required to pay the GST. Excluding the
term GST, terms used in this clause have the meaning given to them in
the GST Tax ▇▇▇ ▇▇▇▇.
SIGNED by UBS MANGAKAHIA FOREST VENTURE LTD by:
_______________________________________ _____________________________________
Full name of attorney Signature of attorney
WITNESS:
(if other than two directors sign)
_______________________________________
Signature of witness
_______________________________________
Full name of witness
_______________________________________
Occupation of witness
_______________________________________
Address of witness
Wood Supply Agreement Page 30
SIGNED by ▇▇▇▇▇▇▇▇ CHALLENGE FORESTS
INDUSTRIES LIMITED by:
__________________________________ ___________________________________
Full name of director/authorised Signature of director/authorised
signatory signatory
__________________________________ ___________________________________
Full name of director/authorised Signature of director/authorised
signatory signatory
WITNESS:
(if other than two directors sign)
____________________________________
Signature of witness
____________________________________
Full name of witness
____________________________________
Occupation of witness
____________________________________
Address of witness
APPENDIX 1
MAP OF SUPPLY REGION
[SUPPLY REGION MAP]
APPENDIX 2
FORESTRY RIGHT