exv10w99






Exhibit 10.99



Carter Holt Harvey Limited



Whakatane Mill Limited



Transition Services Agreement







 









 







Transition Services Agreement



Date ► May 4, 2010



Between the parties




	 	 	 

	CHH

	 	Carter Holt Harvey Limited
	 
	 	 
	Buyer

	 	Whakatane Mill Limited
	 
	 	 
	Recitals

	 	1 CHH and the Buyer have entered into an asset purchase
agreement dated on or about the date of this agreement under
which the Business will transfer from CHH to the Buyer.

	 

	 	2 The Buyer has requested CHH to provide it with certain transition
services to allow for an orderly continuation of the Business.

	 

	 	3 CHH agrees to provide or procure the provision of the Transition
Services to the Buyer and to perform certain related obligations in
accordance with the terms of this agreement.

	 
	 	 
	The parties agree as follows:






 









 







	1	 	Definitions and interpretation
	 
	1.1	 	Definitions
	 
	 	 	In this agreement:





	 	 	 

	Term

	 	Meaning
	Asset Purchase

	 	the asset purchase agreement dated on or about the date of this agreement
	Agreement

	 	between CHH and the Buyer.
	 
	 	 
	Business

	 	the business operated by CHH at the Whakatane Mill, which will be operated
by the Buyer after Completion.
	 
	 	 
	Business Day

	 	any day (other than a Saturday or Sunday or public holiday) on which
registered banks in New Zealand are open for business.
	 
	 	 
	Completion

	 	completion of the Asset Purchase Agreement.
	 
	 	 
	Confidential
Information

	 	of a party means all confidential, non-public or proprietary information
including without limitation trade secrets, all financial, marketing and
technical information, ideas, concepts, know-how, technology, processes and
knowledge relating to that party or a Related Company to that party from
time to time of which any other party becomes aware, both before and after
the day this agreement is signed.
	 
	 	 
	Force Majeure Event

	 	any or all of the following events
or occurrences and the effects thereof: acts of God or public enemy, flood, earthquake, storm, cyclone, tornado,
hurricane, lightning, fire, explosion, epidemic, war, embargo, riot or civil
disturbance, strike or other labour dispute, sabotage, expropriation,
confiscation or requisitioning of facilities, order or temporary or
permanent injunction of any duly constituted court of competent jurisdiction
and any other matter or event which is beyond the control of a party (but
excluding the payment of money for any reason) and of which that party could
not take reasonable measures to prevent or mitigate the effects.
	 
	 	 
	Government Agency

	 	any government or any public, statutory, governmental (including a local
authority), semi-governmental, local governmental or judicial body, entity,
department or authority, any self-regulatory organisation established under
statute or any other body that has legal power to require another person to
act or not act in a particular way or to authorise a particular act in any
part of the world.
	 
	 	 
	Law

	 	includes:
	 

	 	(a) principles of law or equity established by applicable decisions
of New Zealand courts;

	 
	 

	 	(b) applicable statutes, regulations, rulings or by-laws of New
Zealand or a Government Agency; and

	 
	 

	 	(c) requirements and approvals (including conditions) of a Government







 









 






	 	 	 

	Term

	 	Meaning
	 
	 	 
	 

	 	Agency that have the force of law and district and regional plans (including
any guidelines or similar rules which have legally binding
effect).

	 
	 	 
	Related Company

	 	has the meaning given to the term in section 2(3) of the Companies Act 1993
amended such that the term “company” where used in that section includes any
corporate entity wherever incorporated.
	 
	 	 
	Term

	 	the period defined in clause 2.
	 
	 	 
	Transition Services

	 	the transition services and obligations set out in schedule 1 and in clause
10 which are to be provided or performed by or on behalf of CHH during the
Term.
	 
	 	 
	Whakatane Mill

	 	CHH’s mill at Whakatane, which will be transferred to the Buyer on Completion.







	1.2	 	Interpretation
	 
	 	 	In this agreement, headings are for convenience only and do not affect interpretation
and, unless the context requires otherwise:






	 	(a)	 	words importing the singular include the plural and vice versa;
	 
	 	(b)	 	words importing a gender include any gender;
	 
	 	(c)	 	other parts of speech and grammatical forms of a word or phrase defined in
this agreement have a corresponding meaning;
	 
	 	(d)	 	an expression importing a natural person includes any company, partnership,
joint venture, association, corporation or other body corporate and any Government
Agency;
	 
	 	(e)	 	a reference to a clause, party or schedule is a reference to a clause of,
and a party and schedule to, this agreement and a reference to this agreement
includes any schedule;
	 
	 	(f)	 	a reference to a statute, regulation, proclamation, ordinance or by-law
includes all statutes, regulations, proclamations, ordinances or by-laws amending,
consolidating or replacing it, and a reference to a statute includes all regulations,
proclamations, ordinances and by-laws issued under that statute;
	 
	 	(g)	 	a reference to a document includes all amendments or supplements to, or
replacements or novations of, that document;
	 
	 	(h)	 	a reference to a party to a document includes that party’s successors and
permitted assigns;
	 
	 	(i)	 	no provision of this agreement will be construed adversely to a party
solely on the
ground that the party was responsible for the preparation of this agreement or
that
provision;
	 
	 	(j)	 	a promise or agreement by two or more persons binds them jointly and
severally; and
	 
	 	(k)	 	New Zealand dollars, dollars, NZ$ or $ is a reference to the lawful
currency of New Zealand.




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	1.3	 	Business Day
	 
	 	 	Where the day on or by which something must be done is not a Business Day, that thing
must be done on or by the next Business Day.
	 
	2	 	Term
	 
	 	 	The Term commences at Completion and continues until terminated in respect of any or
all Transition Services in accordance with this agreement.
	 
	3	 	Services and Variations
	 
	3.1	 	Transition Services
	 
	 	 	Subject to clause 5.3, and conditional upon Completion occurring, CHH agrees to
provide or procure the provision of Transition Services and the other services referred to
in this agreement, to the Buyer during the Term, in accordance with this agreement.
	 
	 
	3.2	 	Variation of Services
	 
	 	 	The parties may agree in writing to vary the Transition Services.
	 
	4	 	Fees and costs
	 
	(1)	 	The Buyer will pay fixed monthly fees, as set out in schedule 1 and adjusted in accordance
with clause 4(4), for the provision of the Transition Services by CHH, plus GST, in
respect of
each Transition Service to cover all expenses other than:






	 	(a)	 	the costs of CHH meeting the Buyer’s Prudential Requirements under clause 9
(the fee for meeting such Prudential Requirements will be paid in accordance with
9(3));
	 
	 	(b)	 	the costs of providing the Debtor Insurance under clause 9 (the fee for
providing such Debtor Insurance will be paid in accordance with clause 9(6));
	 
	 	(c)	 	any other costs incurred by CHH as a result of providing the Transition
Services under this agreement (including under clause 7.1) which are outside the
combined ordinary course operating expenses of the Business and which have been
incurred with the prior consent of the Buyer (not to be unreasonably withheld or
delayed).






	(2)	 	The Buyer shall pay the fixed monthly fee referred to in clause 4(1) above in respect of each
Transition Service, and reimburse all costs or disbursements incurred by CHH by the last day
of the month following the date of the invoice received from CHH and referred to in clause 4(1)(c)
for such fees, costs or disbursements.
	 
	(3)	 	The monthly fees set out in Schedule 1 for Payroll, Accounts Payable, Accounts Receivable,
Cash Management and IT Transition Services are based on 2010 budgeted costs. The Buyer shall
only be liable for the actual costs to CHH of these Transition Services. After 31 December of
each year, or the termination of any Transition Service, CHH shall promptly undertake a review
of the actual costs of the Transition Services, on a service by service basis, during the
relevant period and if the actual costs were less than the aggregate amounts paid by the
Buyer, CHH will promptly pay the Buyer the difference in such amounts, or if the actual costs
were greater than the aggregate amounts paid by the Buyer, CHH will invoice the Buyer for the
difference in such amounts and the Buyer shall promptly pay the invoiced amount.




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	(4)	 	On the 1st Business Day of each calendar year, or such other date as the parties may agree,
of the Term:






	 	(a)	 	the monthly fee for each of the Corporate Services, Procurement and Energy
Management Transition Services shall be adjusted for any movement in
the CPI (being
the New Zealand Consumer Price Index) over the previous calendar year;
	 
	 	(b)	 	the monthly fee for Payroll, Accounts Payable, Accounts Receivable, Cash
Management and IT Transition Services shall be adjusted to a monthly apportionment of
the budgeted costs for the forthcoming year; and
	 
	 	(c)	 	CHH will provide the Buyer with details of the calculations of all
allocations of budgeted costs.






	(5)	 	Goods and services tax is payable in addition to the fees for the Transition Services and any
other fees or costs referred to in this agreement.






	5	 	Limitations to Transition Services






	5.1	 	Acknowledgment by the Buyer
	 
	 	 	The Buyer agrees that the limitations in this clause 5 apply with respect to CHH’s
provision or procurement of the provision of the Transition Services.






	5.2	 	Manner of performance






	(1)	 	CHH will use reasonable endeavours to perform or have performed the Transition Services
materially:






	 	(a)	 	consistent with practices in effect with respect to the provision of like
services by or to the Business at the time of Completion, including with respect to
the type, quality and timeliness of such Transition Services; and
	 
	 	(b)	 	to the equivalent standard of equivalent services provided to other
divisions of CHH.






	(2)	 	In carrying out any of the Transition Services which require CHH to negotiate price with a
third party on the Buyer’s behalf:






	 	(a)	 	where CHH also purchases goods or services for itself from the same
supplier, CHH will use its reasonable endeavours to ensure that the Buyer receives
the same pricing, adjusted for any factors specific to the Whakatane Mill, including,
but not limited to, location and freight, as that received by CHH; and
	 
	 	(b)	 	where CHH does not purchase goods or services for itself from the same
supplier, CHH will use its reasonable endeavours to promote the Buyer’s commercial
interests and negotiate pricing, adjusted for any factors specific to the Whakatane
Mill, including, but not limited to, location and freight, that CHH would expect to
receive if CHH were procuring the same goods or services for itself.






	 	 	CHH will not act in a manner which favours CHH’s procurement strategy ahead of that of the
Buyer.






	(3)	 	The Buyer may specify preferred suppliers for supplying all or any goods or services
contemplated in clause 5.2(2). Where the Buyer has specified a preferred supplier of such
goods or services, CHH will seek to procure the relevant goods or services from the
preferred supplier in preference to other suppliers.






	5.3	 	Third party assets






	(1)	 	The Buyer acknowledges that the provision of Transition Services may require that it
has
access to software licensed by, or equipment leased by, CHH or a Related Company of CHH
from a third party.




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	(2)	 	Subject to clause 5.3(3), CHH shall grant or shall procure that a Related Company of CHH will
grant to the Buyer a sub-licence or sub-lease, as applicable, under rights CHH may have, if
any, in such third party software or equipment, but only to the extent necessary to effect the
provision of Transition Services and only to the extent that CHH or its Related Company has
the right to grant such sub-license or sub-lease, provided that CHH shall not be responsible
for any failure of or defects in such third party software or equipment.
	 
	(3)	 	To the extent that CHH or its Related Company requires the consent of the counterparty to any
licence or lease in order to grant to the Buyer a sub-licence or sub-lease, and that consent
is not obtained before Completion, CHH or its Related Company will continue to use reasonable
endeavours to obtain such consent. CHH will have no obligation under this agreement to
provide the relevant Transition Services for which the sub-license or sub-lease is
required unless and until that consent is obtained.
	 
	(4)	 	The Buyer must comply with any disclosed terms and conditions of any third party licences or
leases sub-licensed or sub-leased to it by CHH pursuant to clause 5.3(2) and the Buyer shall
indemnify CHH against all loss or damage incurred or suffered by CHH or any of its Related
Companies arising out of a breach by the Buyer of its obligations under this clause or any use
by the Buyer of any software or equipment where CHH is not able to grant or procure the grant
of a sub-licence or sub-lease and this has been notified by CHH to the Buyer in writing.






	6	 	Lease of land






	6.1	 	Lease of garage site
	 
	(1)	 	The Buyer has agreed to grant a lease of an area of land being retained by CHH and across
the road from the Whakatane Mill, as approximately shown in the map attached as Schedule 3
(Lease Area), in favour of third parties to carry out maintenance activities for the Buyer
(Permitted Use). In consideration of the Buyer paying to CHH a fee of $1 per annum (which the
parties acknowledge has been paid), CHH grants to the Buyer a lease of the Lease Area for the
Permitted Use (Lease). CHH agrees that the Buyer may grant a sub-lease or license of the Lease
Area.
	 
	(2)	 	The Buyer or a third party nominated by the Buyer shall pay for all electricity, telephones,
telecommunications and other utilities or services supplied to or used in the Lease Area. If
any charges or assessments payable by the Buyer pursuant to this clause 6.1(2) are not
separately charged or assessed, the Buyer shall upon demand pay a fair proportion as
reasonably determined by CHH.
	 
	(3)	 	The Buyer will comply, and will ensure that its sub-lessee or licensee complies, with all
statutes, bylaws and regulations which relate to the use of the Lease Area and shall obtain
and retain at its own cost, all necessary licences, consents and permits. The Buyer and its
employees, contractors, agents, invitees, sub-lessees and licensees shall observe and perform
the rules and regulations of CHH in respect of the Lease Area (as amended and modified from
time to time by CHH).
	 
	(4)	 	In carrying out the Permitted Use and exercising its rights under this Lease, the Buyer shall
not interfere with or inconvenience (as appropriate):






	 	(a)	 	any of the services of CHH;
	 
	 	(b)	 	CHH or any tenant or other occupier of any adjacent land in the conduct of
its use, occupation or enjoyment of that land: and
	 
	 	(c)	 	the occupier of any neighbouring land in the conduct of its business.






	(5)	 	The Buyer shall at the expiration or sooner termination of this Lease vacate the Lease Area
and remove all rubbish, plant, machinery and any permanent structures (including
foundations), chattels and fixtures and fittings which are the property of the Buyer (or
any
sub-lessee or licensee of the Lease Area) and make good, at its own expense, any damage
caused by such removal and leave the Lease Area in a clean and tidy condition to the
satisfaction of CHH and in similar condition as the Lease Area existed as at the
commencement of this Lease.




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	7	 	Access, privacy and confidentiality
	 
	7.1	 	Access
	 
	(1)	 	Each party must provide the other with reasonable access to its personnel, premises and
assets to the extent reasonably required by the other party to receive or provide the
Transition Services under this agreement. The parties acknowledge that CHH will be entitled to
provide direction to personnel of the Buyer to the extent reasonably necessary to facilitate
receipt or performance of the Transition Services, except where any such direction would
materially interfere with the operation of the Business or the Whakatane Mill, in which case
CHH will not issue such direction without the consent of the Buyer (not to be unreasonably
withheld or delayed).
	 
	(2)	 	Each party must maintain commercially reasonable security measures and procedures to prevent
unauthorised access to, or use of, the Transition Services provided by or on behalf of CHH and
must take all measures reasonably required by the other party.
	 
	(3)	 	Each party must follow the documented and notified processes, policies and procedures
(including in relation to safety) of the other party when accessing such other party’s
premises or assets.
	 
	(4)	 	The Buyer must not allow access to or use of Transition Services by any third party without
the prior written consent of CHH (such consent will not be unreasonably withheld or delayed),
except where such third party is a Related Company of the Buyer whose use or access to the
Transition Services is directly required to support the Business.
	 
	7.2	 	Privacy
	 
	 	 	Each party must, in respect of personal information to which that party has access as
a result of this agreement, in all material aspects:






	 	(a)	 	comply with the relevant and applicable provisions of the Privacy Act 1993
and such other data protection legislation and applicable codes of conduct as may be
in force from time to time, including in respect of the collection, storage, use and
disclosure of information, as if it were the party subject to regulation;
	 
	 	(b)	 	comply with any reasonable privacy policy which has been adopted by another
party and which has been notified to the first party prior to the execution of this
agreement as if it were bound by that policy;
	 
	 	(c)	 	comply with any reasonable written direction of another party in relation
to the means of compliance with such legislation, codes of conduct or privacy policy;
and
	 
	 	(d)	 	reasonably cooperate with each party in the resolution of any complaint
alleging a breach of such legislation or privacy policy.






	7.3	 	No disclosure of Confidential Information
	 
	 	 	No party may directly or indirectly disclose to any other person, or use or allow to
be disclosed or used for any purpose except as contemplated by this agreement, any
Confidential Information of another party that it acquires under or as a result of this
agreement, and must hold as confidential such information, except where:






	 	(a)	 	required by law or any recognised stock exchange on which its securities or
the securities of any Related Company are listed;
	 
	 	(b)	 	necessary to perform or enforce its obligations under this agreement;
	 
	 	(c)	 	the other party consents to its disclosure;
	 
	 	(d)	 	it is publicly available other than by breach of this agreement; or
	 
	 	(e)	 	it is already in the possession of that party or comes into its possession
other than by a breach of this agreement.




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	7.4	 	Return of Confidential Information upon termination or expiration of
agreement
	 
	(1)	 	Upon termination or expiration of this agreement and subject to legal requirements:






	 	(a)	 	CHH must return to the Buyer, procure the return to the Buyer or destroy
(at CHH’s option), all Confidential Information of the Buyer and its Related
Companies and other materials relating to the Buyer and its Related Companies (other
than the records which CHH is required by law to retain) acquired by CHH or its
employees, agents and contractors under or as a result of this agreement (including
in relation to the Buyer’s payroll and accounting and financial data and
information);
	 
	 	(b)	 	the Buyer must return to CHH, procure the return to CHH or destroy (at the
Buyer’s option) all Confidential Information of CHH and its Related Companies and
other materials relating to CHH and its Related Companies (other than records which
Buyer is required by law to retain) acquired by the Buyer or its employees, agents
and contractors under or as a result of this agreement; and
	 
	 	(c)	 	each party must promptly certify in writing to the other party that it has
complied with its obligations under this clause 7.4.






	(2)	 	As soon as reasonably practicable and in any event no later than 30 days after the expiration
or termination of this agreement or a Transition Service, CHH will, at its cost, handover to the
Buyer any files relating to the expired or terminated Transition Service which CHH has in its
possession which are specific to the Business and are necessary to enable the Buyer to
carry out the same function previously covered by the relevant Transition Service.
	 
	7.5	 	Survival
	 
	 	 	The obligations of each party under this clause 7 survive termination or expiration of
this agreement.
	 
	8	 	CHH Employees
	 
	8.1	 	Nature of relationship
	 
	 	 	At all times during the provision of the Transition Services:






	 	(a)	 	any employee of CHH who provides the Transition Services will remain an
employee of CHH; and
	 
	 	(b)	 	nothing in this agreement will be taken as creating an employment
relationship between any employee of CHH who provides the Transition Services and the
Buyer.






	8.2	 	No offers of employment
	 
	 	 	A party to this agreement must not, without the written consent of the other party,
make any offer of employment, or assist any other person to make an offer of employment,
to employees of the other party during the Term. For one year after the termination of
this agreement, a party to this agreement, either itself or through a third party, must
not solicit the services of any employee of the other party, provided that the foregoing
shall not apply to where an employee of the other party responds to a general solicitation
of employment through publication of vacant positions or a third party agent not directed
at employees of the other party.
	 
	8.3	 	CHH employees at Whakatane Mill
	 
	 	 	To enable CHH to carry out the IT Transition Services in Schedule 2, CHH will locate
certain staff at the Whakatane Mill as CHH deems reasonably
necessary. The Buyer will
provide workspace as is reasonably necessary, and at no cost to CHH, to accommodate any
such CHH staff which are permanently or temporarily located at the Whakatane Mill. As at
the




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	 	 	commencement of this agreement, there will be 4 permanent CHH staff members located at the
Whakatane Mill. CHH will not increase the number of permanent staff members located at the
Whakatane Mill without the consent of the Buyer (such consent not to be unreasonably
withheld or delayed).






	8.4	 	Buyer employee at CHH site
	 
	 	 	The Buyer employs 1 sales employee in Auckland. CHH will provide workspace as is
reasonably necessary, at no cost to the Buyer, to accommodate that same sales employee of
the Buyer, or a replacement employee as the Buyer gives notice of to CHH. As at the
commencement of this agreement, the Buyer’s sales employee will be located at CHH’s
Penrose Mill site. CHH will be entitled on notice to the Buyer to relocate such sales
employee to another workspace within Auckland.
	 
	8.5	 	Secondment of Australian Staff
	 
	(1)	 	As at Completion, a Related Company of CHH employed two persons in Australia whose
primary function is technical, marketing and customer services for the Whakatane Mill
(Australian Staff). The parties wish to have another subsidiary of the Buyer become the
employer of the Australian Staff shortly after Completion. Until such time as the employer of
the Australian Staff has changed, CHH will procure the current employer of the Australian
Staff to second the Australian Staff to the Buyer for the purpose of performing the same
duties as carried on by them as at Completion.
	 
	(2)	 	CHH will provide workspace as is reasonably necessary, at no cost to the Buyer, to
accommodate the Australian Staff. The Buyer will reimburse CHH (and each of its Related
Companies) for all employment related costs of the Australian Staff incurred by CHH or its
Related Companies in respect of their secondment to the Buyer. Reimbursement by the Buyer
of such costs will be made in the manner specified in clause 4(2) of this Agreement.
	 
	8.6	 	Intellectual Property
	 
	 	 	All right, title and interest in any intellectual property (including copyright, patent
or design rights) discovered, invented, developed, modified or improved by any employee of
CHH providing the Transition Services, either on his own or jointly with others, will be
the sole and exclusive property of CHH, provided that where any intellectual property
(including copyright, patent or design rights) is discovered, invented, developed,
modified or improved directly involving assets owned by the Buyer, such intellectual
property shall be jointly owned by CHH and the Buyer, in which case CHH and the Buyer each
grant the other a royalty-free, transferable license in perpetuity to use such
intellectual property as each sees fits.
	 
	9	 	Prudential Requirements and Debtor Insurance
	 
	(1)	 	Electricity is supplied to the Whakatane Mill, and certain other CHH sites, under the terms
of the electricity spot market services agreement dated 18 August 2008 between CHH and
TrustPower Limited (TrustPower Agreement). The remainder of CHH sites receive electricity
under another electricity spot market services agreement between CHH
and a third party (Other
Spot Agreement). CHH offsets its prudential requirements under the TrustPower Agreement with
CHH’s electricity generation at its Kinleith mill. Accordingly, there is no prudential payment
made by CHH to TrustPower Limited under the TrustPower Agreement. CHH is required to pay a fee
under the Other Spot Agreement in order to avoid the requirement to post prudential. This fee
is then internally on-charged to all the Carter Holt Harvey group sites on the basis of their
electricity consumption.
	 
	(2)	 	CHH and the Buyer intend that after Completion, the Buyer will enter into a new agreement
with TrustPower on substantially the same terms and conditions as the TrustPower Agreement
(Replacement Agreement).




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	(3)	 	If TrustPower requires in the terms of the Replacement Agreement that the Buyer meet
prudential requirements by providing acceptable security to TrustPower (Prudential
Requirements), CHH will meet those Prudential Requirements on the Buyer’s behalf,
provided that:






	 	(a)	 	CHH can meet the Prudential Requirements on the same terms and conditions
and in the same manner as CHH meets the prudential requirements under the TrustPower
Agreement as at the date of this Agreement; and
	 
	 	(b)	 	TrustPower is agreeable to CHH meeting the Prudential Requirements on the
Buyer’s behalf.






	(4)	 	On receipt of a valid tax invoice, the Buyer shall pay CHH or its agent (as notified to the
Buyer from time to time) a fee for meeting the Prudential Requirements. Such fee will be
calculated in the same manner as the fees paid by the other Carter Holt Harvey group sites
whose prudential requirements are covered by CHH (or one of its Related Companies) in the same
manner (in accordance with clause 9(1)).
	 
	(5)	 	If at any time during the Term, the provisos in clauses 9(3)(a) and 9(3)(b) cease to be true,
or CHH terminates this agreement in respect of the Prudential Requirements under clause
14.5(1)(b), CHH may cease immediately to meet the Prudential Requirements on behalf of the
Buyer and the Buyer shall be responsible to meet such Prudential Requirements itself. CHH
shall not be liable to the Buyer for any loss, damage, liability, cost or expense incurred or
suffered by it which arises from such action or if the Buyer is unable to meet the Prudential
Requirements subsequently set by TrustPower Limited.
	 
	(6)	 	As at the date of this agreement, the Pulp and Paper division of CHH holds an insurance
policy in relation to payment default by its debtors (Debtor Insurance). At the Buyer’s
request and provided that CHH is providing the Buyer with Credit Control Transition Services
as set out in Schedule 1, CHH will use its reasonable endeavours to extend the Debtor
Insurance to cover
the Buyer in relation to the Business as an insured party. If CHH is able to extend the
Debtor Insurance to cover the Buyer, then the Buyer:






	 	(a)	 	must comply with the obligations of an insured party under the policy for
the Debtor Insurance;
	 
	 	(b)	 	must not take any action or omit to anything which would be likely to
affect CHH’s ability to maintain its existing Debtor Insurance or obtain replacement
debtor insurance on substantially similar terms, provided that the Buyer making
claims against the Debtor Insurance will not, by itself, constitute a breach of this
subclause;
	 
	 	(c)	 	will pay on a monthly basis to CHH a portion of the premium payable by CHH
for the Debtor Insurance. Such portion of the premium will be calculated in the same
manner as the portions paid by the other CHH Pulp and Paper division sites who take
the benefit of the Debtor Insurance, provided that if as a result of extending the
Debtor Insurance to cover the Buyer, the insurer levies a higher premium than the
premium applied immediately prior to extending the Debtor Insurance, then the Buyer
will also pay the difference between the two premiums.






	(7)	 	The Buyer may at any time give notice to CHH that the Buyer no longer wishes to be
covered by the Debtor Insurance provided that the Buyer must pay any fees or costs levied
by the insurer in order to vary the Debtor Insurance policy so as to exclude the Buyer.
	 
	10	 	Australian exports
	 
	10.1	 	Application for ABN number
	 
	 	 	The Buyer will, as soon as practicable after Completion, obtain an Australian Business
Number (ABN) to enable it to export its products to customers in Australia on DDU terms.
The Buyer will advise CHH once it has obtained an ABN for such purpose.




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	10.2	 	Resale arrangements
	 
	 	 	Pending issue to the Buyer of an ABN as referred to in clause 10.1, CHH will, on
request from the Buyer, purchase product manufactured by the Buyer intended to be exported
to Australia (provided that there is a nominated purchaser of those products from CHH).
CHH will comply with all reasonable directions of the Buyer for purposes of this clause
provided that CHH will not be obliged to:






	 	(a)	 	take any action in breach of any applicable Law; or
	 
	 	(b)	 	incur any cost or liability unless the Buyer has agreed to fully reimburse
CHH for any such cost or liability to the reasonable satisfaction of CHH.






	 	 	CHH will cease to have any further obligations under this clause 10 upon the earlier of
the Buyer obtaining an ABN as referred to in clause 10.1 and the date which is two months
after the date of Completion.
	 
	11	 	Limitation of liability and warranties
	 
	11.1	 	Limited liability per claim
	 
	 	 	Subject to clauses 11.2 and 11.3, the liability of either party under this agreement
shall be limited to $100,000 per claim or series of related claims.
	 
	11.2	 	Liability for negligence, wilful act or omission
	 
	 	 	The liability of either party where, and to the extent that, the losses or damages of
the other party are caused by the liable party’s gross negligence or wilful act or wilful
omission shall not be subject to the limitations in clauses 11.1 and 11.4.
	 
	11.3	 	Limited aggregate liability
	 
	 	 	Other than in respect of the Buyer’s obligation to pay the costs and fees invoiced
under this agreement, the liability of either party under this agreement shall be limited
in any 12 month period commencing as from the Commencement Date to $1,000,000.
	 
	11.4	 	Exclusion of liability
	 
	 	 	Subject to clause 11.2, each party shall not in any circumstances be liable to the
other party for any loss of profits or indirect or other consequential loss or damage
(including any loss of: business income; profits; revenue; customers; penalties; fines;
damages for personal injury; use of an asset; production; contract; goodwill; or loss or
corruption of data and additional finance or interest costs) in relation to this
agreement.
	 
	11.5	 	Time limit
	 
	 	 	No claim in relation to this agreement may be made against CHH more than twelve (12)
months after expiry of the Term, or in relation to the provision of a Transition Service
or other service which terminates prior to the expiry of the Term, more than twelve (12)
months after the provision of that Transition Service or other service terminates.
	 
	11.6	 	No warranties
	 
	 	 	Except as set out in clause 11.7, there are no warranties (either express or implied
and to the maximum extent that the parties are able by law to contract out of any
statutory warranties) under this agreement in relation to the Transition Services or the
delivery of them.




11









 






	11.7	 	Mutual representations and warranties
	 
	 	 	Each party represents and warrants to the other parties as at the date of this
agreement, and at all times after the date of this agreement, that:






	 	(a)	 	it has full power and authority to enter into, perform and observe its
obligations under this agreement;
	 
	 	(b)	 	to its knowledge there are no actions, claims, proceedings or
investigations pending or threatened against it or by it which may have a material
effect on the subject matter of this agreement;
	 
	 	(c)	 	it has all licences, authorisations, consents, approvals and permits
required by applicable Law in order to perform its obligations under this agreement,
and otherwise complies with all Laws applicable to the performance of those
obligations; and
	 
	 	(d)	 	it will at all times comply with any applicable Law or industry standards.






	12	 	Force majeure
	 
	(1)	 	Neither party will be liable for any failure to perform its obligations under this
agreement
where such failure is due to a Force Majeure Event, provided that the affected party:






	 	(a)	 	promptly notifies the other party of the cause arising;
	 
	 	(b)	 	uses its reasonable endeavours to overcome or work around such cause and to
minimise its effects; and
	 
	 	(c)	 	uses its reasonable endeavours to resume performance of the obligation
frustrated by such cause as soon as such cause has abated.






	(2)	 	Either party may terminate this agreement in whole or in part to the extent the other party’s
performance of its obligations under this agreement is materially affected by a Force Majeure
Event lasting more than 20 days.
	 
	(3)	 	If CHH is unable to provide any of the services due to a Force Majeure Event, then the Buyer
may purchase or source the relevant services from a third party while the Force Majeure Event
continues.
	 
	13	 	Relationship with Asset Purchase Agreement
	 
	13.1	 	Inconsistency
	 
	 	 	In respect of transitional issues, if any inconsistency arises between this agreement
and the Asset Purchase Agreement, this agreement will prevail to the extent of that
inconsistency.
	 
	13.2	 	Breach of termination
	 
	 	 	A breach or termination of this agreement will have no effect on the operation or
validity of the Asset Purchase Agreement.
	 
	14	 	Termination
	 
	14.1	 	Termination of agreement for cause
	 
	 	 	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




12









 






	 	 	within 30 days after notice of such breach from the other party (Notifying
Party), then the Notifying Party may:






	 	(a)	 	if the breach relates to a particular Transition Service or other service
provided under this agreement, terminate the provisions of this agreement to the
extent they relate to that Transition Service or other service; or
	 
	 	(b)	 	terminate this agreement,






	 	 	in each case by giving 30 days prior written notice to the Defaulting Party. If the Buyer
chooses to terminate some but not all of the Transition Services or other services
provided under the agreement, the Buyer will not be required to pay for those Transition
Services or other services that are terminated.
	 
	14.2	 	Termination for insolvency
	 
	 	 	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.
	 
	14.3	 	Mutually agreed termination
	 
	 	 	The parties may mutually agree in writing to terminate this agreement prior to the
expiry of the Term. Where the parties agree to terminate some but not all of the
Transition Services or other services prior to the expiry of the Term, the Buyer will not
be required to pay for those Transition Services or other services that are terminated.
	 
	14.4	 	Termination by the Buyer
	 
	(1)	 	At any time during the Term, the Buyer may provide CHH with a written notice terminating
this agreement in respect of:






	 	(a)	 	all or some of the Transition Services, with effect from the date which is
not less than 3 months after the termination notice is provided to CHH; and
	 
	 	(b)	 	the Lease, with effect from the date which is not less than 3 months after
the termination notice is provided to CHH.






	(2)	 	The Buyer may not terminate part of an individual Transition Service, such individual
Transition Services being those listed in the column headed  ‘Transition Services’ in
Schedule 1. If the Buyer chooses to terminate some but not all the Transition Services the
Buyer will not be required to pay for those Transition Services that are terminated.
	 
	14.5	 	Termination by CHH
	 
	(1)	 	CHH may terminate this agreement in respect of:






	 	(a)	 	all of the Transition Services, upon a change of control of either party by
giving not less than 6 months notice, provided that notice cannot be given before 1
May 2011;
	 
	 	(b)	 	the Prudential Requirements and Debtor Insurance, upon a change of control
of either party, with effect from the date on which such change of control occurs;
and
	 
	 	(c)	 	the Lease, with effect from the date which is not less than 6 months after
the termination notice is provided to the Buyer.






	(2)	 	For the purposes of this agreement, change of control means:






	 	(a)	 	where a party ceases to be controlled directly or indirectly by Mr. Graeme
Richard Hart; or
	 
	 	(b)	 	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 Richard Hart;
or




13









 






	 	(c)	 	a sale of the majority of the assets of CHH to a third party who is
not controlled directly or indirectly by Mr. Graeme Richard Hart.






	14.6	 	Consequences of termination
	 
	(1)	 	Without prejudice to the obligations of the parties under clause 7.4, as soon as reasonably
practicable and in any event no later than 30 days after the expiration or termination of this
agreement, each party must return or procure the return of the property of the other party to
that other party at no additional cost.
	 
	(2)	 	On termination of the IT Transition Services:






	 	(a)	 	CHH will be responsible for the separation, and costs of such separation,
of any IT assets which are at that time owned by, or exclusively licensed to, the
Buyer from CHH’s IT assets and infrastructure;
	 
	 	(b)	 	the Buyer will be responsible for the connection, and costs of such
connection, of any IT assets which are at that time owned by, or exclusively licensed
to, the Buyer to the Buyer’s IT assets and infrastructure;
	 
	 	(c)	 	notwithstanding clause 13.6(2)(a), CHH will have no obligation to transfer
to the Buyer any software or other IT licence used to provide the Transition Services
pursuant to this agreement (or incur any licensor’s costs to effect any such
transfer); and
	 
	 	(d)	 	CHH will consult with the Buyer about the IT assets and infrastructure that
are required to replace the licences referred to in clause 13.6(2)(c) and CHH will
use its reasonable endeavours (without any obligation to incur costs) to assist the
Buyer to achieve an uninterrupted transition of IT services once the Buyer ceases to
have the benefit of those licences.






	(3)	 	In the event that the IT Transition Services are terminated in part during the Term, the
parties will perform their obligations under clause 13.6(2) to the extent of the licences
and
particular assets of the parties which are relevant to the terminated Transition Services.
	 
	15	 	Dispute resolution process
	 
	15.1	 	Procedure
	 
	 	 	If any dispute arises between the parties under or in connection with this agreement:






	 	(a)	 	the dispute must initially be referred to the parties’ respective nominated
representatives who are responsible for the management of this agreement;
	 
	 	(b)	 	the representatives must then use their reasonable endeavours to resolve
the dispute; and
	 
	 	(c)	 	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.






	15.2	 	No resolution
	 
	 	 	If the dispute cannot be resolved by the parties’ respective Chief Executives within
the time period specified, either party may require the dispute to be referred to an
Independent Expert as defined in clause 15.4. The Independent Expert’s decision will be
final and binding on the parties, save for manifest error.
	 
	15.3	 	Confidentiality
	 
	 	 	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 15.




14









 












	 	 	15.4 Independent Expert
	 
	 	 	The Independent Expert will be appointed in accordance with the following provisions:






	 	(a)	 	the Independent Expert will be appointed by both parties or, where the
parties
cannot agree within 14 days, appointed by:






	 	(A)	 	in relation to disputes regarding fees, the chairperson
of the Auckland branch of the Institute of Chartered Accountants of New
Zealand; and
	 
	 	(B)	 	in relation to all other disputes, the President of the
New Zealand Law Society;






	 	(b)	 	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
	 
	 	(c)	 	the costs and expenses of the Independent Expert will be shared by the
parties equally.






	16	 	General
	 
	16.1	 	Notices
	 
	(1)	 	The particulars for delivery of notices are
initially:
	 
	 	 	Carter Holt Harvey Limited





	 	 	 	 	 

	 

	 	Address:
	 	Physical address
	 

	 	 	 	Kinleith Site State
	 

	 	 	 	Highway 1 Kinleith
	 

	 	 	 	Tokoroa 3491
	 
	 	 	 	 
	 

	 	 	 	Postal address
	 

	 	 	 	Private Bag 6
	 

	 	 	 	Tokoroa 3444
	 

	 	Attention:
	 	Karl Klinge
	 

	 	Telephone:
	 	(07) 885 5999
	 

	 	Facsimile:
	 	(07) 886 3614
	 

	 	Email:
	 	Karl.Klinge@chh.co.nz
	 
	 	 	 	 
	 	 	Copy to each of the persons named below:
	 
	 	 	 	 
	 	 	Carter Holt Harvey Limited
	 
	 	 	 	 
	 

	 	Address:
	 	173 Captain Springs Road
	 

	 	 	 	Te Papapa
	 

	 	 	 	Private Bag 92-106
	 

	 	 	 	Auckland 1142
	 

	 	Attention:
	 	Business Legal Counsel — Pulp, Paper and Packaging
	 

	 	Facsimile:
	 	(09) 633 0601
	 
	 	 	 	 
	 	 	Rank Group Limited
	 
	 	 	 	 
	 

	 	Address:
	 	Level Nine
	 

	 	 	 	148 Quay Street
	 

	 	 	 	PO Box 3515
	 

	 	 	 	Auckland
	 

	 	Attention:
	 	Greg Cole
	 

	 	Facsimile:
	 	(09) 366 6263
	 

	 	Email:
	 	Greg.Cole@rankgroup.co.nz







15











 





	 	 	 

	Rank Group Limited
	 
	 	 
	Address:

	 	Level Nine
	 

	 	148 Quay Street
	 

	 	PO Box 3515
	 

	 	Auckland
	Attention:

	 	Helen Golding
	Facsimile:

	 	(09) 366 6263
	Email:

	 	Helen.Golding@rankgroup.co.nz
	 
	 	 
	The Buyer
	 	 
	 
	 	 
	Address:

	 	Mill Road
	 

	 	Whakatane
	Attention:

	 	Graham Millar
	Telephone:

	 	(07) 306 3800
	Facsimile:

	 	(07) 306 3655[●]
	Email:

	 	Graham.Millar@chh.co.nz[●]
	 
	 	 
	Copy to each of the persons named below: 
	 
	 	 
	SIG Group
	 	 
	 
	 	 
	Address:

	 	Laufengasse 18 CH-8212 Neuhausen am Rheinfall

Switzerland
	Attention:

	 	Marco Haussener
	Facsimile:

	 	0041 52 674 7200
	Email:

	 	Marco.Haussener@sig.biz
	 
	 	 
	SIG Group
	 	 
	 
	 	 
	Address:

	 	Laufengasse 18 CH-8212 Neuhausen am Rheinfall

Switzerland
	Attention:

	 	Daniel Petitpierre
	Facsimile:

	 	0041 52 674 6556
	Email:

	 	Daniel.Petitpierre@sig.biz







	(2)	 	Any notice, demand, consent or other communication given or made under this agreement
(Notice) must be:






	 	(a)	 	left at the address (or addresses) set out or referred to in clause 16.1(1);
	 
	 	(b)	 	sent by prepaid ordinary post (airmail if appropriate) to the address (or
addresses) set out or referred to in clause 16.1(1);
	 
	 	(c)	 	sent by fax to the fax number set out or referred to in clause 16.1(1);
	 
	 	(d)	 	sent by email to the email address set out or referred to in clause 16.1(1); or
	 
	 	(e)	 	given in any other way permitted by law.






	 	 	However, if the intended recipient has notified a changed postal address, physical
address, fax number or email address then the communication must be to that address or
number.
	 
	(3)	 	A Notice takes effect from the time it is received unless a later time is specified.






	 	(a)	 	If sent by post, a Notice is taken to be received three days after posting
(or seven days after posting if sent to or from a place outside New Zealand).
	 
	 	(b)	 	If sent by fax, a Notice is taken to be received at the time shown in the
transmission report as the time that the whole fax was sent.
	 
	 	(c)	 	If sent by email, a Notice is taken to be received at the time shown in the
sent email as the time that the email was sent.




16









 












	(4)	 	If a Notice is given:






	 	(a)	 	after 5.00 pm in the place of receipt;
	 
	 	(b)	 	on a day which is not a Business Day in the place of receipt, or
	 
	 	(c)	 	on a day starting from and including 24 December to 3 January,






	 	 	it is taken as having been given at 9.00 am on the next day which is a Business Day in that place.






	16.2	 	Governing law and jurisdiction
	 
	 	 	This agreement is governed by and construed in accordance with the laws of New
Zealand. Each party irrevocably and unconditionally submits to the exclusive jurisdiction
of the courts of New Zealand.
	 
	16.3	 	Prohibition and enforceability
	 
	(1)	 	Any provision of, or the application of any provision of, this agreement which is void,
illegal, unenforceable or prohibited in any jurisdiction does not affect the validity,
legality or enforceability of that provision in any other jurisdiction or of the remaining
provisions in that or any other jurisdiction.
	 
	(2)	 	The application of this clause is not limited by any other provision of this agreement in
relation to severability, prohibition or enforceability.
	 
	16.4	 	Waivers
	 
	(1)	 	Waiver of any right, power, authority, discretion or remedy arising on a breach of or
default under this agreement must be in writing and signed by the party granting the waiver.
	 
	(2)	 	A party is not entitled to rely on the conduct of another party or on a delay in the exercise
or non-exercise of a right, power, authority, discretion or remedy arising from a breach of
this agreement or default under this agreement as constituting a waiver of that right, power,
authority, discretion or remedy.
	 
	16.5	 	Variation
	 
	 	 	A variation of any term of this agreement must be in writing and signed by the parties.
	 
	16.6	 	Further assurances
	 
	 	 	Each party must do all reasonable things necessary to give full effect to this
agreement and the transactions contemplated by this agreement.
	 
	16.7	 	Entire agreement
	 
	 	 	This agreement supersedes all previous agreements in respect of its subject matter and
embodies the entire agreement between the parties.
	 
	16.8	 	Counterparts
	 
	 	 	This agreement may be executed in any number of counterparts. It comprises all the
counterparts, taken together.
	 
	16.9	 	Subcontracting
	 
	(1)	 	CHH may:






	 	(a)	 	subcontract any of the Transition Services to be performed to a third party
service provider. CHH remains responsible for the performance of its obligations
under this agreement and subject to clause 10, bears the risk of the subcontracting
arrangement; and




17









 












	 	(b)	 	replace one third party service provider for another provided that there are
no material adverse effects on the Transition Services supplied to the Buyer.






	(2)	 	CHH is responsible for coordinating the activities of its respective third party service
providers to provide all necessary inputs to enable them to perform CHH’s obligations under
this agreement.
	 
	(3)	 	If CHH engages a Related Company to perform any of the Transition Services, CHH will be
treated as if it provides those Transition Services for the purposes of this agreement.
	 
	16.10	 	Relationship of the parties
	 
	(1)	 	The parties are independent contractors and nothing in this agreement creates a
relationship of joint venture, partnership or principal or agent between any of the parties.
	 
	(2)	 	A party must not act as if, or request or attempt to request to any person that, any such
relationship exists.
	 
	(3)	 	No party may attempt to bind or impose any obligation on any other party or incur any joint
liability without the prior written consent of the other party except as set out in this
agreement.
	 
	16.11	 	Costs and expenses
	 
	(1)	 	Each party must pay its own costs and expenses in respect of the negotiation, preparation,
execution, delivery and registration of this agreement and any other agreement or document
entered into or signed under this agreement.
	 
	(2)	 	Any action to be taken by the parties in performing its obligations under this agreement must
be taken at its own cost and expense unless otherwise provided in this agreement.




18









 











	 	 	 	 	 

	 

	 	Executed as an agreement	 	 
	 
	 	 	 	 
	 

	 	Executed by Carter Holt Harvey Limited	 	 
	 
	 	 	 	 
	sign here►

	 	ROBERT BALLEY
 

Authorised signatory
	 	 
	 
	 	 	 	 
	print name

	 	ROBERT BALLEY	 	 
	 
	 	 	 	 
	 

	 	Buyer	 	 
	 
	 	 	 	 
	 

	 	Executed by Whakatane Mill Limited	 	 
	 
	 	 	 	 
	sign here►

	 	ROBERT BALLEY
 

Authorised Signatory
	 	 
	 
	 	 	 	 
	print name

	 	ROBERT BALLEY	 	 







19











 






Schedule 1



Transition Services




	 	 	 	 	 	 	 
	 	 	Transition Service	 	Description	 	Fees
	1.

	 	Payroll
	 	 (i)  Weekly and monthly wage and salaries
calculations and payments, including
the provision of payslips to the site

 (ii)  Master data processes for new
employees, terminated employees and
changes to employees master data 

 (iii)  Updates to rates and allowances master
data as the result of new or changed
site employment agreements 

 (iv)  Provision of annual leave and long
service leave reporting 

 (v)  Responding to ad hoc questions from
site representatives 

	 	$5,388.08 per month
(based on 2010
budget of $64,657)
	 
	 	 	 	 	 	 
	2.

	 	Accounts Payable
	 	 (i)   Processing and management of
supplier invoices for payment 

 (ii)  Management of twice weekly, 20th and
30th of the month payment runs 

 (iii)  Responding to ad hoc questions from
site representatives 

	 	$3,121.33 per month
(based on 2010
budget of $37,456)
	 
	 	 	 	 	 	 
	3.

	 	Accounts Receivable
	 	 (i)   Processing and initial allocation of
incoming customer receipts 

 (ii)  Management of relevant debtor clearing
accounts 

 (iii)  Processing of customer refunds 

 (iv)  Management of the Buyer’s company
credit cards and the associated
Spendvision system 

	 	$345.50 per month
(based on 2010
budget of $4,146)
	 
	 	 	 	 	 	 
	4.

	 	Cash management
	 	 (i)   Processing and management of
incoming and outgoing banking
transactions 

 (ii)  Processing and management of creditor
payment runs and payroll payments,
including provision of the board of the
Buyer approved bank authorisations 

 (iii)  Maintenance of all banking related
clearing accounts, including monthly
bank reconciliations 

 (iv)  General administration of all banking
matters including the provision of
weekly actual cashflows 

	 	$4,965.75 per month
(based on 2010
budget of $59,589)
	 
	 	 	 	 	 	 
	5.

	 	Corporate Services: Insurances
	 	 (i)   Liaising with brokers in relation to the
provision of all insurances (excepting
ACC) 

 (ii)  Processing and management of claims
payments 

 (iii)  Allocation and processing of insurance
costs through to the Whakatane Mill 

	 	$1,000 per month






20









 





	 	 	 	 	 	 	 
	 	 	Transition Service	 	Description	 	Fees
	 

	 	Corporate Services:

Accounting Operations
	 	(i)   Management of all central SAP
processes including monthly and annual
processes
(ii)  Processing of journal entries between
Whakatane Mill and other Carter Holt
Harvey business areas

(iii) Associated centralised tasks associated
with the running of SAP 

(iv)  Creation of monthly financial reporting
electronic file for Whakatane Mill for SIG
reporting purposes 

(v)   Appoint contact people for reporting 

	 	$1,000 per month
	 
	 	 	 	 	 	 
	 

	 	Corporate Services:

Internal Audit
	 	Provision of internal audit services to the Whakatane
Mill
	 	$1,000 per month
	 
	 	 	 	 	 	 
	 

	 	Corporate Services: ACC

management
	 	(i)   Assisting Whakatane Mill Limited to set
up a Workplace Safety Management
Practices Programme for ACC 

(ii)  Assisting with the management of new
claims 

(iii)  Adhoc reporting requirements 

(iv)  ACC audit preparation (if required)

	 	$1,000 per month
	 
	 	 	 	 	 	 
	 

	 	Corporate Services: HR

Services
	 	(i)  Assisting with IR strategy and
development 

(ii)  Operational HR support (including
recruitment, performance management,
policy deployment and / or development
and employee relations matters) 

	 	$1,000 per month
	 
	 	 	 	 	 	 
	 

	 	Corporate Services: Credit

Control
	 	Provision of credit control services including
liaising with insurance brokers in relation to Debtor
Insurance
	 	$1,000 per month
	 
	 	 	 	 	 	 
	 

	 	Corporate Services:

Information Services on legal matters
	 	Providing background information to and liaising as
necessary with:  (i)    the Buyer’s external legal providers; and 

 (ii)    the in-house counsel for Related 

Companies of the Buyer for matters
which relate to the Buyer
	 	$600 per month
	 
	 	 	 	 	 	 
	6.

	 	IT
	 	See Schedule 2
	 	$90,298 per month (based on 2010 budget of
$1,083,579)
	 
	 	 	 	 	 	 
	7.

	 	Procurement
	 	Managing procurement of sulphuric acid, aluminium
sulphate, caustic soda and other consumables which
CHH also acquires for its own purposes or which CHH
has access to via an existing or replacement
procurement arrangement, and which are necessary to
operate the Whakatane Mill.
	 	$1,000 per month
	 
	 	 	 	 	 	 
	8.

	 	Energy Management
	 	Managing the procurement of energy services
(electricity, electricity lines services, gas, and
coal) to the Whakatane Mill
	 	$1,000 per month











21









 











Schedule 2



IT Services



CHH Infotech provides a first-line support service across all IT and Telecoms systems,
providing users with a consistent, Service Level Agreement-based problem and incident management
approach independent of the group providing next line support.



The Service Desk is manned currently 0700-1900 on business days but an on-call representative
answers the same phone number at all other times. Outside working hours on-call representatives of
all the infrastructure and application support teams support the Service Desk team. An on-call
Operations Manager is available to escalate if a Service Level Agreement breach seems likely or a
situation not envisaged by the Service Level Agreement occurs.



CHH Infotech provides a team of Service Delivery Managers who aim to be the customer champion
within the Infotech organisation. The Service Delivery Manager for Whakatane Mill was formerly an
employee of the Pulp & Paper business in the Central North Island. Service Delivery Managers form
part of the on-call Duty Operations Managers team.



First Level and Second Level Support is provided, in general, by CHH Infotech or PPP IT with Third
Level Support being provided by the various vendors. Fault or Administration Calls can be logged by
email or phone, 24x7. During normal hours of operation, calls will be acknowledged within 2 hours
and fixed as soon as possible using reasonable endeavours. Priority 1 or Priority 2 Calls (P1 or
P2) will be responded to immediately 24x7 using reasonable endeavours to provide a solution.



CHH Infotech operates a formal IT Change Management regime aimed at minimising disruption of
business due to IT change. The Change Management process is based on ITIL guidelines, full details
of which are available from CHH infotech.



There is no formal Disaster Recovery (DR) for centralised shared services. There is, however, a
project under way to reinstate DR for shared services and this is likely to be implemented in late
2010 and early 2011. Locally at Whakatane Mill, there are contingencies in place (or planned) for
the core Mill Execution System, Elixir.



Set out below are the terms of the Service Level Agreement for the provision of IT Transition
Services under this Agreement.



The systems and services set out in the tables below generally reflect the systems and services
provided to the Whakatane Mill as at Completion. It is acknowledged that these systems and services
will evolve over time to meet the reasonable needs of the parties and the parties will consult in
good faith as to the systems and services the Whakatane Mill reasonably requires and which CHH
Infotech is reasonably able to provide.




22









 




	 	 	 	 	 	 	 	 	 	 	 

	Service Desk (IT helpdesk),
IT engineer based on site and Service
Delivery Team

	 	Infotech provides these
services, with agreed
service hours and levels,
funded through a bundle
of Service Lines.
	 	Infotech
	 	7am — 7pm NZT
	 	On Call 24 x 7
	 	P1 P2 faults will be dealt with immediately 24 x 7
using reasonable endeavours to resolve the problem. 




P3 P4 P5 faults or requests will be responded to
within 48 hours and resolved using reasonable
endeavours.
	 
	 	 	 	 	 	 	 	 	 	 
	Change and
Configuration
Management

	 	Infotech manages changes
to IT services to
minimise disruption to
Whakatane Mill activity.
Infotech is responsible
to consider interactions
between components to
maintain
	 	Infotech
	 	7am — 7pm NZT Changes are
often implemented out of
hours
	 	Emergency Changes On Call
	 	ITIL process
	 
	 	 	 	 	 	 	 	 	 	 
	Wide Area Network (WAN)

	 	Whakatane Mill is part of
the Pulp, Paper &
Packaging WAN managed by
Infotech using Telecom NZ
circuits.
	 	Infotech
	 	7am — 7pm NZT Subject to
Telecom SLA
	 	Reasonable endeavours
	 	Telecom SLA available on request
	 
	 	 	 	 	 	 	 	 	 	 
	internet Access: Firewall and Proxy

	 	Whakatane Mill uses the
central firewall and
proxy provided by
Infotech for Internet
access (Including links
to trading partners) and
boundary defence.
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Business Local Area Network (LAN)

	 	Infotech manages a
“business” LAN at
Whakatane Mill, which is
connected to the Wide
Area Network.
	 	Infotech
	 	7am — 7pm NZT
	 	On call 24 x 7

Reasonable endeavours	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Email

	 	Whakatane Mill staff use
the central email gateway
and security service
provided by Infotech
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Weighbridge

	 	This application Is
completely local to
Whakatane, supported by
Pulp, Paper & Packaging
IT and Infotech.
	 	PPP IT
	 	 	 	Reasonable endeavours
	 	Assets will transfer on sale.
	 
	 	 	 	 	 	 	 	 	 	 
	PABX/ Telephony

	 	Whakatane Mill has its
own PABX, supported by
Infotech (PABX first line
support) and Cogent (PABX
2nd line
support plus provision of
outside phone lines).
This PABX was installed
in 2009.
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours
	 	The PABX Is under a support and maintenance agreement
	 
	 	 	 	 	 	 	 	 	 	 
	Desktop/ Laptop

	 	Whakatane Mill desktops
will be owned by
Whakatane Mill but
supplied and supported by
CHH
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours
	 	CHH provides Desktop Engineers or Remote Support to
Whakatane Mill
	 
	 	 	 	 	 	 	 	 	 	 





23









 







	 	 	 	 	 	 	 	 	 	 	 

	Microsoft Office suite

	 	Microsoft Office is
deployed, maintained and
supported by Infotech
funded through the Desktop/Laptop
Service Line charge.
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	—
	 
	 	 	 	 	 	 	 	 	 	 
	Sharepoint is a
simple web content
management package.

	 	Hosted at Captain Springs
Road, managed by Infotech.
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	—
	 
	 	 	 	 	 	 	 	 	 	 
	HR Workflow

	 	Within Sharepoint
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	—
	 
	 	 	 	 	 	 	 	 	 	 
	Contracts Library
holds records of
contracts

	 	Within Sharepoint
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	—
	 
	 	 	 	 	 	 	 	 	 	 
	CHRIS (payroll)/Kronos

(time
clocking/ wages
rules)

	 	Hosted on shared hardware
at CSR, supported by
Infotech and vendor
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	—
	 
	 	 	 	 	 	 	 	 	 	 
	HFM financial
consolidation and
reporting

	 	Hosted at Rank Group
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	—
	 
	 	 	 	 	 	 	 	 	 	 
	Internet Sites

	 	Externally designed, may
have been converted into
Sharepoint. Hosted in
Captain Springs Road in DMZ
facing Internet.
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours
	 	If hosted by Infotech
	 
	 	 	 	 	 	 	 	 	 	 
	Spendvision travel 

expenses management 

system

	 	Externally hosted and
linked to credit cards.
	 	n/a
	 	- n/a
	 	Reasonable endeavours
	 	Externally hosted
	 
	 	 	 	 	 	 	 	 	 	 
	Payables bureau
service processing
suppliers’ physical
invoices into SAP

	 	Combination of a third
party scanning service and
Carter Holt Harvey
corporate Accounts Payable
staff.
	 	Infotech
	 	7am — 7pm NZT
	 	Reasonable endeavours	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WebMethods

	 	Infotech hosts and
maintains WebMethods for
Pulp, Paper & Packaging at
Captain Springs Road.
	 	Infotech
	 	7am — 7pm NZT
	 	n/a
	 	Next business day- best endeavours
	 
	 	 	 	 	 	 	 	 	 	 





24









 






	 	 	 	 	 	 	 	 	 	 	 

	Elixir is a complete
Manufacturing
Execution System. It
can support the
mill’s order entry,
production planning,
trimming and
wrapping, inventory,
loading, shipping,
and invoicing.

	 	Whakatane Mill is one of
four Pulp, Paper &
Packaging mills running an
old Elixir version,
Whakatane Mill has its own
Stratus Continuum hardware
running the VOS Operating
System on site, and there
is a similar platform at
Kinleith. A project Is In
progress to upgrade these
to Elixir On Windows (EOW)
in June 2010.
	 	PPP IT
	 	8am — 5pm NZT
	 	On call service 3 tiered

support
	 	Level 1 via Infotech help desk, can be escalated to level 2 by business if response
not received within 1 hour. 




Level 2 = PPPIT on call staff (24x7) work with business owner until resolved or
escalated to level 3




Level 3 = Vendor (MAJIQ) response time 2 hours





Resolution on case by case basis — best endeavours
	 
	 	 	 	 	 	 	 	 	 	 
	Replix is a live
reporting cache for
Elixir data.

	 	Servers at Whakatane
managed by Pulp, Paper &
Packaging IT team, holding
purely Whakatane data.
	 	PPP IT
	 	8am — 5pm NZT
	 	n/a
	 	Next business day- best endeavours
	 
	 	 	 	 	 	 	 	 	 	 
	SCOL is a web-based
system allowing
customers to place
orders and review
delivery schedules.
Business processing
is handled by Elixir.

	 	SCOL is hosted in CSR but
accessing data held within
Elixir and Replix at
Whakatane. SCOL is managed
by PPP IT. It was developed
from Tietonator source code
by a then employee of Pulp,
Paper & Packaging who has
subsequently been available
to make modifications as a
contractor.
	 	PPP IT
	 	8am — 5pm NZT
	 	n/a
	 	Next business day- best endeavours
	 
	 	 	 	 	 	 	 	 	 	 
	Quickview is the
Client component of
Elixir used at the
ports, Carter Holt
Harvey’s Lodestar
shipping and
logistics service
provider, outside
Sales offices etc.

	 	The Quickview version is
tied to the version of
Elixir. The same Quickview
users who provide services
to Whakatane Mill also
service the other Pulp,
Paper & Packaging mills.
	 	PPP IT
	 	8am — 5pm NZT
	 	On call service 3 tiered

support
	 	Level 1 via Infotech help desk, can be escalated to level 2 by business if response
not received within 1 hour. 




Level 2 = PPPIT on call staff (24x7) work with business owner until resolved or
escalated to level 3





Level 3 = Vendor (MAJIQ) response time 2 hours 




Resolution on case by case basis — best endeavours
	 
	 	 	 	 	 	 	 	 	 	 





25









 






	 	 	 	 	 	 	 	 	 	 	 

	MOPS is a
Manufacturing
Information Warehouse
which specialises in
applications that
automate production
loss time reports,
analyse and report
quality information,
and track machine
equipment
performance.

	 	The MOPS instance at
Whakatane Mill is
completely local, supported
by the Pulp, Paper &
Packaging IT team.
Whakatane Mill uses old
DEC/Compaq Alpha hardware
with no manufacturer
support contract, but the
Pulp, Paper & Packaging IT
team instead sources spares
on the secondhand market.
	 	PPP IT
	 	8am — 5pm NZT
	 	On call service 3 tiered support
	 	Level 1 via Infotech help desk, can be escalated to
level 2 by business if response not received within
1 hour. 




Level 2 = PPPIT on call staff (24x7) work with
business owner until resolved or escalated to level
3






Level 3 = Vendor (Mossy’s)
Resolution on case by case basis – best endeavours
	 
	 	 	 	 	 	 	 	 	 	 
	SAP

	 	Whakatane Mill uses Pulp,
Paper & Packaging’s SAP
4.5b resource to manage the
Financial, Procurement
Plant Maintenance and
Logistics business
processes. Infotech hosts
SAP at Captain Springs Road
(Auckland Head Office) SAP
imports invoices generated
in Elixir via the Carter
Holt Harvey Pulp, Paper &
Packaging WebMethods
instance.
	 	PPP IT or Infotech
	 	8am — 5pm NZT
	 	n/a
	 	Next business day- best endeavours
	 
	 	 	 	 	 	 	 	 	 	 
	Weighbridge

	 	This application is
completely local to
Whakatane, supported by
Pulp, Paper & Packaging IT
and Infotech.
	 	PPP IT
	 	8am — 5pm NZT
	 	Reasonable endeavours
	 	Assets will transfer on sale.
	 
	 	 	 	 	 	 	 	 	 	 
	PABX/ Telephony

	 	Whakatane Mill has its own
PABX, supported by Infotech
(PABX first line support)
and Cogent (PABX
2nd line support
plus provision of outside
phone lines). This PABX was
installed in 2009.
	 	Infotech/ Cogent
	 	8am — 5pm NZT
	 	Reasonable endeavours
	 	Vendor support (Cogent)
	 
	 	 	 	 	 	 	 	 	 	 
	Other PC-based minor 

applications

	 	Minor applications are
supported by Infotech. In
many cases they are
deployed through the
Activate and SMS systems
managed by Infotech for
this purpose.
	 	PPP IT
	 	8am — 5pm NZT
	 	Reasonable endeavours
	 	Next business day






26









 





	 	 	 	 	 	 	 	 	 	 	 

	Application Servers

	 	Four application servers
run minor applications at
Whakatane Mill, all on
Windows supported by the
Pulp, Paper & Packaging IT
team.
	 	PPP IT
	 	8am — 5pm NZT
	 	n/a
	 	Next business day
	 
	 	 	 	 	 	 	 	 	 	 
	Other infrastructure

	 	Terminal servers, Radio
Frequency equipment and
label printers are
supported by the Pulp,
Paper & Packaging IT team.
	 	PPP IT
	 	8am — 5pm NZT
	 	On call service 3

tiered support
	 	Level 1 via Infotech help desk, can be escalated
to level 2 by business if response not received
within 1 hour. 




Level 2 = PPPIT on call staff (24x7) work with
business owner until resolved or escalated to
level 3





Level 3 = Vendor (MAJIQ) response time 2 hours




Resolution on case by case basis — best endeavours
	 
	 	 	 	 	 	 	 	 	 	 
	Microsoft Reporting Services

	 	Whakatane Mill has its own
instance of Microsoft
Reporting Services 2000
hosted on site and
supported by Pulp, Paper &
Packaging IT. It is widely
used by Pulp, Paper &
Packaging for Whakatane
data.
	 	PPP IT
	 	8am — 5pm NZT
	 	N/A
	 	Next business day
	 
	 	 	 	 	 	 	 	 	 	 
	E-Cargo

	 	Hosted externally, managed

by e-Cargo Ltd
	 	PPP IT
	 	8am — 5pm NZT
	 	N/A
	 	Next business day — Vendor
	 
	 	 	 	 	 	 	 	 	 	 
	CubelQ container packing 

optimisation

	 	Single instance on local PC
	 	PPP IT
	 	8am — 5pm NZT
	 	N/A
	 	Next business day











27









 











IT Systems and related components used by the Whakatane Mill




	 	 	 	 	 	 	 	 	 	 	 	 	 

	Elixir

	 	 	 	Whakatane Mill
	 	 	 	 	 	PPPIS
	 	Elixir is the manufacturing system at Whakatane. Order acceptance
to invoicing. Runs manufacturing site as well as remote warehouses
in Tauranga and Auckland. Server is currently locally based at
Whakatane.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	VOS — Operating
System
	 	Whakatane Mill
	 	 	 	 	 	PPPIS
	 	Stratus Operating System
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Quikview — Desktop
client for Elixir
	 	Whakatane Mill
	 	 	85	 	 	PPPIS
	 	Desktop Client for Elixir
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Replix
	 	Whakatane Mill
	 	NA
	 	PPPIS
	 	Linked to Elixir — SQL 2000 reporting DB -Real time Interface used
for SCOL links and Microsoft reporting services (ad hoc reporting)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	SCOL — Customer Web
front end for order
placement and
tracking
	 	Captain Springs Road

Onehunga
	 	NA
	 	PPPIS
	 	Customer Front end for Elixir Developed in Microsoft ,NET. Uses XML
transactions into Elixir for Order placement. Links to
Replix DB’s at Whakatane and Kinleith for Order tracking (Shared
App)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Ghostview
	 	Whakatane Mill
	 	Freeware
	 	PPPIS
	 	Freeware used to run Elixir fixed reports to desktop rather than
printer. Does Postscript conversion
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	MOPS/PQIS

	 	 	 	Whakatane Mill
	 	Unlimited
	 	PPPIS
	 	Production tracking and alerts. Oracle DB, some reporting linked to
MS reporting services
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SAP

	 	 	 	Captain Springs Road

Onehunga
	 	 	72	 	 	Infotech/ Oxygen/ PPPIS
	 	Centrally located In Auckland Elixir interface for financials and
credit control. Also used for plant maintenance(Shared App)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Web Methods

	 	 	 	Captain Springs Road

Onehunga
	 	NA
	 	Infotech/ Oxygen/ PPPIS
	 	Middleware for SAP, Elixir and customer facing interfaces and
business to business links(Shared App)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Weighbridge

	 	 	 	Whakatane Mill
	 	 	10	 	 	PPPIS
	 	Sensotronics linked to SAP for payments to vendors
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PABX

	 	 	 	Whakatane Mill
	 	 	100?	 	 	Infotech
	 	On site telephone system
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Desktop/Laptop

	 	 	 	Whakatane Mill
	 	 	121	 	 	Infotech
	 	Desktop Hardware
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Microsoft Office suite

	 	 	 	Whakatane Mill
	 	 	121	 	 	Infotech
	 	Standard Office tools -Word/Excel/Powerpoint/Outlook
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Flle/Prlnt/Exchange

	 	 	 	Whakatane Mill
	 	 	121	 	 	Infotech
	 	Email and Print server
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Application Servers
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Local Resource &
Intranet
	 	Whakatane Mill
	 	 	 	 	 	PPPIS
	 	Minor Apps
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Whakatane
 FaxServer
	 	Whakatane Mill
	 	 	 	 	 	PPPIS
	 	Minor Apps
	 
	 	 	 	 	 	 	 	 	 	 	 	 





28









 






	 	 	 	 	 	 	 	 	 	 	 	 	 

	 

	 	Whakatane Mill Site
Server
	 	Whakatane Mill
	 	 	 	 	 	Infotech
	 	Minor Apps
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Process SQL Server
	 	Whakatane Mill
	 	 	 	 	 	PPPIS
	 	Minor Apps
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Infrastructure

	 	Wide Area network
access
	 	Ail
	 	NA
	 	Infotech
	 	Connection to CHH Wide area Network
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Microsoft reporting Services

	 	 	 	Kinleith Mill
	 	 	 	 	 	PPPIS
	 	Web based reporting from Elixir and merged data. Also scheduled
reports
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Sharepoint

	 	 	 	Captain Springs Road
Onehunga
	 	Web
	 	Infotech
	 	Web portal for Mill wide communication and training documentation
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	E-Cargo

	 	 	 	Whakatane mill/Ecargo
	 	 	4	 	 	E-Cargo
	 	Hosted but with client load — Logistics and freight invoice tracking
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	CubelQ

	 	 	 	Whakatane Mill
	 	 	2	 	 	PPPIS
	 	Container packing app used by export customer services (1 user)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	CHRIS

	 	 	 	Captain Springs Road
Onehunga
	 	 	223	 	 	Infotech
	 	Payroll and HR
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	HR

	 	 	 	Captain Springs Road
Onehunga
	 	 	223	 	 	Infotech
	 	Payroll and HR
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	HFM

	 	 	 	 	 	NA
	 	Corporate
	 	Financial consolidation done at corporate level no access at site
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PICRS

	 	 	 	Kinleith Mill
	 	 	6?	 	 	Apollo Consulting
	 	Capital projects implementation and tracking










29









 







Schedule 3



30









 






Map of leased areas




31









 












32