Document:

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PAGES WHERE CONFIDENTIAL TREATMENT HAS BEEN REQUESTED PURSUANT TO RULE 406 OF
THE SECURITIES ACT OF 1933, AS AMENDED, ARE MARKED "CONFIDENTIAL TREATMENT
REQUESTED PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION" AND THE
CONFIDENTIAL SECTION HAS BEEN MARKED WITH A STAR (*)

                                                                   REDACTED COPY

THIS DISTRIBUTION AGREEMENT is made on the 23rd day of November, 2001

BY AND BETWEEN:

                  NORSKE SKOG CANADA SALES INC., a company incorporated under
                  the laws of British Columbia whose registered office is at 9th
                  Floor, 700 West Georgia Street, P.O. Box 10058 Pacific Centre,
                  Vancouver, British Columbia, Canada V7Y IJ7 (the "VENDOR")

AND:

                  PAN ASIA PAPER CO. PTE LTD, a company incorporated under the
                  laws of Singapore whose registered office is at 8 Shenton Way,
                  #44-01 Temasek Tower, Singapore 068811 (the "PURCHASER").

WHEREAS:

(A)      The Vendor, directly and/or through its affiliates, is engaged in the
         business of manufacturing, marketing, distributing and selling Relevant
         Products; and

(B)      The Vendor and the Purchaser have agreed that all sales, marketing and
         distribution of the Relevant Products in the Territory during the Term
         of this Agreement, including without limitation all outstanding orders
         and Sales Agreements, shall be carried out exclusively by the Purchaser
         in accordance with the terms and conditions of this Agreement.

NOW, IT IS AGREED AS FOLLOWS:

ARTICLE 1- DEFINITIONS AND INTERPRETATION

1.1      In this Agreement, the following words and expressions shall have the
         meanings respectively assigned to them.

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         (a)      "AFFILIATE" means a Subsidiary or, in the case of a
                  partnership, a partnership is an Affiliate of a corporation or
                  company when the partnership and such corporation are
                  controlled by the same corporation or company

         (b)      "RELEVANT PRODUCTS" means all wood-containing printing and
                  writing paper between newsprint grade and lightweight-coated
                  grade, including but not limited to newsprint, improved
                  newsprint, highbright newsprint, directory, super calendared
                  papers and lightweight-coated papers, which is manufactured by
                  the Vendor or any of its Affiliates, and with effect from 1
                  January 2002 to include products manufactured by the mills
                  formerly owned by Pacifica Papers Inc.

         (c)      "SALES AGREEMENTS" shall mean all oral and written agreements
                  (including agency agreements) to which the Vendor is a party
                  that pertain to the sale of Relevant Products in the
                  Territory.

         (d)      "SUBSIDIARY" means, in relation to a company or corporation,
                  any other company or corporation (i) which is controlled,
                  directly or indirectly, by the first-mentioned company or
                  corporation and, for these purposes, a company or corporation
                  shall be treated as being controlled by another if that other
                  company or corporation is able to direct its affairs and/or
                  control the composition of its board of directors or
                  equivalent body; or (ii) at least half the issued share
                  capital of which is beneficially owned, directly or
                  indirectly, by the first-mentioned company or corporation; or
                  (iii) which is a direct or indirect subsidiary of another
                  subsidiary of the first-mentioned company or corporation.

         (e)      "TERM" means that period of time from the date of this
                  Agreement to the date set forth in written notice provided by
                  one party to the other that the notifying party wishes to
                  terminate this Agreement, which date shall not be less than
                  six (6) months from the date of the notice, having regard to
                  relevant competition law requirements.

         (f)      "TERRITORY" means the territorial limits of all territories
                  and countries located west of the western boundary of Alaska,
                  U.S.A. and east of the western boundary of Pakistan from time
                  to time, but excluding Japan.

         (g)      "US$" or "US DOLLAR" means the lawful currency of the United
                  States of America.

1.2      In this Agreement:

         (a)      a reference to a person includes a reference to any body
                  corporate, unincorporated association or partnership and a
                  reference to that person's legal personal representatives or
                  successors;

         (b)      words importing the singular include the plural and vice versa
                  and words importing one gender include every other gender
                  unless the context requires otherwise;

         (c)      references to a Recital, Clause or Schedule, unless the
                  context otherwise requires, is a reference to a recital or
                  clause of or schedule to this Agreement;

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         (d)      the Recitals and Schedules form part of this Agreement and
                  shall have the same force and effect as if set out in the body
                  of this Agreement, and references to this Agreement include
                  the Recitals and Schedules; and

         (e)      headings are for reference only and shall not affect the
                  interpretation of this Agreement.

ARTICLE 2 - DISTRIBUTION

2.1      MANDATE. Subject to Article 5, the Vendor hereby appoints the Purchaser
         and hereby grants to the Purchaser the right to sell, market and
         distribute the Relevant Products in the Territory on an exclusive basis
         during the Term of this Agreement. The Purchaser hereby accepts the
         foregoing mandate and agrees to act in the aforesaid exclusive capacity
         in respect of the Relevant Products in the Territory during the Term
         hereof.

2.2      SALES AGREEMENTS. Without in any manner limiting the provisions hereof,
         the Vendor sells, transfers and assigns to the Purchaser on an "as is
         where is" basis, and without warranty, all of the Vendor's right, title
         and interest in and to the Sales Agreements subject to the provisions
         regarding assignment contained in such Sales Agreements. The Vendor
         shall provide details of the Sales Agreements to the Purchaser on or
         prior to the effective date hereof whereupon the Relevant Products
         contemplated therein shall be sold by the Vendor to the Purchaser in
         accordance with the provisions hereof for resale pursuant to the terms
         of the relevant Sales Agreements. For greater certainty, in no event
         shall the Vendor sell Relevant Products contemplated in the Sales
         Agreements except through the Purchaser pursuant hereto. The Purchaser
         agrees to assist the Vendor in obtaining any required consents to such,
         assignment and covenants to comply with all terms of such Sales
         Agreements once assigned.

2.3      CONSENTS. The Vendor will use its reasonable endeavors to obtain such
         consents as may be required in order to effect the sale, transfer and
         assignment contemplated in Section 2.2 hereof; provided, however, that
         in no event will the Vendor incur any liability whatsoever in the event
         of its inability to procure such consents.

2.4      ADJUSTMENTS. On the effective date hereof, the Vendor will pay to the
         Purchaser all moneys (including, without limitation, all advance
         payments, deposits and partial payments for Relevant Products not yet
         then delivered but excluding any moneys received for Relevant Products
         delivered prior to the effective date hereof) and transfer to the
         Purchaser all security (including, without limitation, letters of
         credit) received by it in respect of all outstanding orders and Sales
         Agreements being sold, transferred and assigned to the Purchaser
         pursuant to this Agreement.

2.5      CUSTOMER LIST. The Vendor sells, transfers and assigns to the Purchaser
         on an "as is where is" basis, and without warranty, all the Vendor's
         right, title and interest in and to, and shall deliver to the Purchaser
         on or prior to the effective date hereof, copies of all outstanding
         written orders and descriptions of all outstanding oral orders for (in
         whole or in part) the Relevant Products within the Territory, a list of
         all customers (including contact name or names, addresses and telephone
         and facsimile numbers) who over the past three years have purchased the
         Relevant Products within the Territory.

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2.6      SUBSIDIARY. For all purposes of this Agreement, the rights of the
         parties hereunder shall also extend to and include any of their
         respective Subsidiaries.

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CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 406 OF THE SECURITIES ACT OF
1933, AS AMENDED, AND THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE
COMMISSION - CONFIDENTIAL SECTION HAS BEEN MARKED WITH A STAR (*)

ARTICLE 3 - TERMS OF SALE

3.1      Subject to Article 5, and unless otherwise agreed between the parties,
         the terms and conditions upon which the Purchaser shall purchase the
         Relevant Products from the Vendor shall include the following: (a) the
         price payable by the Purchaser to the Vendor for the Relevant Products
         from time to time during the Term shall be equal to the price
         negotiated for the resale of the Relevant Products by the Purchaser to
         its customer less the distribution fee set out in Schedule 1 hereto,
         and shall be payable in US dollars on a * basis from the date of
         transfer of title; and (b) all shipping and delivery charges will be
         for the account of the Vendor and, unless otherwise agreed, all
         shipments will be on a C and F (cost and freight) basis.

3.2      Title will transfer from the Vendor to the Purchaser upon delivery of
         the Relevant Products to the carrier against bill of lading.

ARTICLE 4 - RIGHTS AND OBLIGATIONS OF PURCHASER

4.1      SALE IN OWN NAME. The Purchaser shall sell the Relevant Products in the
         Territory in its own name and for its own account and risk. All
         purchasers of Relevant Products will be customers of the Purchaser and
         not the Vendor. Notwithstanding anything in this Agreement to the
         contrary, nothing in this Agreement shall be interpreted as
         constituting the Purchaser as an agent of the Vendor for any purpose.
         All customer relations, complaints and other dealings shall be handled
         solely by the Purchaser. Notwithstanding the foregoing, the Purchaser
         agrees that it will not re-wrap, re-label or otherwise sell the
         Relevant Products to any purchaser thereof in any form other than as
         shipped by the Vendor to the Purchaser under this Agreement.

4.2      NO REPRESENTATION. Subject to Article 5, the Purchaser shall have no
         right or authority to act for or in the name of, or to bind, the Vendor
         in any way whatsoever or to extend any warranty or make any
         representation on behalf of the Vendor. The Purchaser shall furthermore
         be solely responsible for its obligations and liabilities to third
         parties.

ARTICLE 5 - ORDER AND DELIVERY

5.1      SALES FORECASTS. The Purchaser shall use its reasonable efforts to
         provide to the Vendor on an ongoing basis a rolling forecast of its
         requirements of the Relevant Products for sale in the Territory.

5.2      ORDERS AND ACCEPTANCE. Orders placed by the Purchaser with the Vendor
         in connection with the Relevant Products shall be accepted or rejected
         by the Vendor in its discretion within twenty-one (21) days of receipt
         of same. Each order from the Purchaser shall set

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         forth the proposed delivery period and all other relevant terms and
         conditions. Orders shall be deemed to have been rejected if the Vendor
         fails to send a written acceptance of such order prior to the
         expiration of the above noted twenty-one (21) day period. Subject

to Section 10.2, the Purchaser shall have no right to cancel an order following
acceptance.

ARTICLE 6 - TERRITORIAL LIMIT

6.1      The Purchaser agrees that it will not knowingly, directly or
         indirectly, sell or distribute the Relevant Products or otherwise make
         same, or permit same to be made, available outside of the Territory.

ARTICLE 7 - PROTECTED INTELLECTUAL PROPERTY RIGHTS

7.1      The Purchaser acknowledges and agrees that all intellectual property
         rights, including without limitation, trademarks associated with the
         Relevant Products are owned by an Affiliate of the Vendor and licensed
         to the Vendor. The Purchaser obtains no ownership right, title or
         interest in such intellectual property under this Agreement and shall
         not take any action which would alter, modify or infringe such
         intellectual property rights. The Vendor grants to the Purchaser a
         sub-license of such intellectual property rights for the sole purpose
         of marketing and selling the Relevant Products in the Territory. The
         Purchaser will not take any action to register in any country in the
         Territory any trademarks which are confusingly similar to the Vendor's
         trademarks. The Purchaser agrees that it will not, during or after the
         term of this Agreement, in any way dispute or impugn the validity of
         the Vendor's Affiliate's trademarks or other intellectual property or
         the rights of the Vendor as licensor thereof.

ARTICLE 8 - RIGHTS AND OBLIGATIONS OF THE VENDOR

8.1      EXCLUSIVE RIGHT. The Vendor shall perform all of its obligations
         following acceptance of an order and shall not knowingly, directly or
         indirectly, sell or distribute the Relevant Products within the
         Territory to any other party.

8.2      DUTIES, ETC. All import and export duties and other similar taxes
         payable in respect of the sale of the Relevant Products shall be the
         responsibility of the Purchaser.

ARTICLE 9 - PACKING AND SHIPPING

9.1      PACKING. Unless otherwise agreed, Relevant Products shall be prepared
         and packed in accordance with the Vendor's customary practices.

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9.2      SHIPPING. Shipment shall be effected by the means of transport
         determined jointly by the Vendor and the Purchaser; failing such
         agreement, the Vendor shall use the means of transport most recently
         used by it for the customer in question or, where there is no precedent
         for the customer in question, the Vendor shall use the means of
         transport normally used by it for such purposes.

ARTICLE 10 - DELIVERY TIME AND FORCE MAJEURE

10.1     Unless otherwise agreed upon by the parties, delivery periods commence
         on the date of acceptance of an order.

10.2     Events such as force majeure, labour problems, shortages of materials
         and other circumstances which affect the Vendor or the Vendor's
         Affiliates and which are beyond the reasonable control of the Vendor
         entitle the Vendor to extend the delivery period for a period
         corresponding to the duration of the disability, and furthermore
         entitle either the Vendor or the Purchaser to cancel an order without
         any resulting claim for damages should the delay extend beyond
         forty-five (45) days. The Vendor shall promptly notify the Purchaser of
         the occurrence of such events.

ARTICLE 11- EARLY TERMINATION

11.1     EARLY TERMINATION ON NOTICE. If the Vendor gives a notice to the
         Purchaser notifying the Purchaser of the Vendor's desire to terminate
         this Agreement and such notice expires on or before 1 July 2003, the
         Vendor shall on or before the expiry of the notice pay to the Purchaser
         a fee, calculated as follows:-

              Distribution fee payable by Vendor to Purchaser for the
              sale and purchase of groundwood specialties for the last
              12 months prior to Purchaser's receipt of such notice       x    3
              -----------------------------------------------------

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11.2     EARLY TERMINATION WITHOUT NOTICE. This Agreement shall be terminated:

         (a)      immediately, if this Agreement, or the actions of the parties
                  under this Agreement are, in the reasonable determination of a
                  party hereto as evidenced or substantiated by a legal opinion,
                  unlawful; or

         (b)      on written notice by a party to other party on a breach by the
                  other party which remains uncured within thirty (30) days
                  after the date on which written notice thereof requiring the
                  other party to cure the same shall have been received by it.

ARTICLE 12 - BREACH

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12.1     BREACH. In addition to the right to terminate as set out in Section
         11.2, either party shall have the right to claim monetary damages
         (which for the purposes hereof includes, without limitation, interest
         from the date of default at the annual rate of twenty-four percent
         (24%) at any time in the event of a breach or default by the other to
         perform any of its obligations hereunder and to rectify same within
         seven (7) days in the case of monetary default and for all other
         defaults thirty (30) days following written notice (except for a
         non-monetary default which is incapable of being rectified within such
         thirty (30) day delay, provided that the party in default commences to
         rectify the default within such thirty (30) day delay and proceeds
         thereafter in a diligent and expeditious manner).

ARTICLE 13 - DISPUTES

13.1     DISPUTE RESOLUTION. Any dispute, controversy or claim (a "DISPUTE")
         arising out of or relating to this Agreement shall be resolved in
         accordance with the procedures specified in this Article 12, which
         shall be the sole and exclusive procedures for the resolution of any
         such disputes.

13.2     NEGOTIATION BETWEEN EXECUTIVES.

         (a)      The parties shall attempt in good faith to resolve any Dispute
                  arising out of or relating to this Agreement promptly by
                  negotiation between the appointed representatives of the
                  Vendor and the Purchaser who are at a higher level of
                  management than the persons with direct responsibility for
                  administration of this Agreement.

         (b)      If the matter has not been resolved by these persons within
                  thirty (30) days of the disputing party's notice, or if the
                  parties fail to meet within fifteen (15) days from the date of
                  such notice, either party may initiate arbitration as provided
                  hereinafter.

         (c)      All negotiations pursuant to this clause are on a confidential
                  and without prejudice basis and shall be treated as compromise
                  and settlement negotiations.

13.3     ARBITRATION.

         (a)      In the event of any Dispute between the parties hereto arising
                  out of or in connection with this Agreement, including any
                  question regarding its existence validity, interpretation,
                  breach or termination, such Dispute shall be finally resolved
                  by arbitration under the Rules of London Court of
                  International Arbitration ("LCIA"), which Rules are deemed to
                  be incorporated by reference into this Section 13.3.

         (b)      The seat of the arbitration shall be London, England, and the
                  language of the arbitration shall be English.

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         (c)      The arbitral tribunal (the "TRIBUNAL") shall consist of three
                  (3) arbitrators one (1) to be appointed by the claimant of the
                  Dispute, one (l) to be appointed by the respondent of the
                  Dispute and the third (3rd) to be appointed by mutual
                  agreement between the first two arbitrators or, failing
                  agreement within thirty (30) days, by the then Chairman of the
                  LCIA.

         (d)      Any award of the Tribunal shall be denominated in US dollars
                  and be binding from the day it is made, and the parties hereto
                  waive any right to refer any question of law and any right of
                  appeal on the law and/or merits to any court.

         (e)      This Section 13.3 shall be governed by English law.

13.2     CONTINUED PERFORMANCE. Each party is required to continue to perform
         its obligations under this Agreement pending final resolution of any
         Dispute arising out of or relating to this Agreement.

ARTICLE 14 - MISCELLANEOUS

14.1     MODIFICATIONS. This Agreement shall not be modified, amended, cancelled
         or altered in any way except by an instrument in writing signed by all
         parties. All amendments or modifications of this Agreement shall be
         binding upon the parties despite any lack of consideration so long as
         the same shall be in writing and executed by the parties.

14.2     WAIVER. No party hereto shall have been deemed to have waived any right
         arising out of this Agreement or out of any default or breach
         hereunder, unless such waiver is evidenced by a written instrument by
         such party. No waiver of any default or breach hereunder shall be
         construed to constitute a waiver of any other default or breach
         hereunder whether similar or not. All representations and warranties
         shall survive without estoppel or waiver arising as a result of any
         investigation by either party or disclosure to any party hereunder.

14.3     SEVERABILITY. Should any term, clause or provision of this Agreement be
         judged to be invalid for any reason whatsoever, such invalidity shall
         not affect the validity or operation of any other term, clause or
         provision, and such invalid term, clause or provision shall be deemed
         to have been deleted from this Agreement.

14.4     GOVERNING LAW. This Agreement is governed by, and shall be construed in
         accordance with the laws of Singapore.

14.5     ASSIGNMENT. No party shall have the right, power or authority to assign
         this Agreement or any of its rights or obligations hereunder to any
         third party, and this Agreement may not be involuntarily assigned or
         assigned by operation of law, without the prior written consent of the
         other parties. Any such assignment without the other parties' prior
         written consent shall be null and void.

14.6     THIRD PARTY BENEFITS. This Agreement shall be binding upon, and inure
         to the benefit of, each of the parties and their respective successors
         and permitted assigns. Nothing

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         contained in this Agreement, express or implied, shall be deemed to
         confer any right or remedy upon, or obligate, any person or entity
         other than the parties and their respective successors and permitted
         assigns.

14.7     NO PARTNERSHIP OR AGENCY. No party shall have the right, power or
         authority to create any obligation or duty, express or implied, on
         behalf of any other party.

14.8     NOTICE. All notices, demands, requests, consents or other
         communications hereunder shall be in writing and shall be given by
         personal delivery, by express courier, by registered mail or certified
         mail with return receipt requested, to the parties at the addresses
         shown below or to such other address as may be designated by written
         notice given by any party to the other parties. All notices, demands,
         requests, consents or other communications hereunder shall be deemed
         effective upon delivery if personally delivered, or the earlier of
         actual delivery or three days after dispatch if sent by express
         courier, or the earlier of actual delivery of five (5) days after
         dispatch if sent by registered or certified mail (or airmail for an
         overseas address).

<Table>
          <S>                       <C>
          To the Vendor:            9th Floor, 700 West Georgia Street,
                                    P.O. Box 10058 Pacific Centre,
                                    Vancouver, British Columbia,
                                    Canada V7Y IJ7
                                    Attention: Senior VP, Sales & Marketing

          To the Purchaser:         8 Shenton Way,
                                     #44-01 Temasek Tower,
                                     Singapore 068811
                                     Attention: Chief Sales Officer
</Table>

14.9     COUNTERPARTS. This Agreement may be executed in one or more
         counterparts, each of which shall be deemed an original, but all of
         which together shall constitute one and the same instrument.

14.10    CAPTIONS. The Article and Section headings and captions contained
         herein are for purposes of reference and convenience only and shall not
         in any way affect the meaning or interpretation of this Agreement.

14.11    SECRECY. Each party to this Agreement hereby undertakes to keep
         absolutely confidential all information which it may obtain in
         connection with this Agreement relating to the other party to this
         Agreement that is not a matter of public record or shall not be subject
         to disclosure by virtue of law, including, by way of example,
         information relating to corporate and business organisation, financial
         structure and conditions, internal policies concerning employment and
         industrial relations in general. Without limiting the generality of the
         foregoing, the Vendor shall handle all of the Purchaser's confidential

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         information, marketing and other material as business secrets and shall
         maintain such information and material in strict confidence. In
         particular, it is strictly forbidden for the Vendor to pass on any
         information relating to customers, prices, price changes, pricing
         methods, rebates, refunds, margins, costs, traded volumes and/or
         production figures or any similar information to any competitive
         supplier, including to other vendors to the Purchaser. It is understood
         that each party shall hold the other party harmless from any damages
         such other party may incur as a consequence of the first party having
         disclosed to third parties unauthorised information relating to such
         other party.

14.12    PUBLIC ANNOUNCEMENTS. Unless otherwise required by law or regulatory
         authorities, no press release or other public announcement pertaining
         to the transactions contemplated by this Agreement will be made by or
         on behalf of any party without the prior approval of the other parties.

14.13    ENTIRE AGREEMENT. This Agreement, including the Schedules and Exhibits
         hereof, is the only controlling instrument and represents the complete
         and accurate description of the intent of the parties, and constitutes
         the entire agreement between the parties relating to the subject matter
         hereof, and there are no prior representations, warranties or
         agreements relating thereto. No change in, addition to, or waiver of
         the terms and conditions hereof shall be binding on any party unless
         approved by it in writing.

         IN WITNESS WHEREOF, the parties executed this Agreement on the date
first above written.

                                        PAN ASIA PAPER CO. PTE LTD

                                         By: /s/ Jan H. Clasen
                                         Name: Jan H. Clasen
                                         Title: Senior VP & Chief Sales Officer

                                         NORSKE SKOG CANADA SALES INC.

                                         By: /s/ James E. Armitage
                                         Name: James E. Armitage
                                         Title: Senior VP, Sales & Marketing

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CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 406 OF THE SECURITIES ACT OF
1933, AS AMENDED, AND THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE
COMMISSION - CONFIDENTIAL SECTION HAS BEEN MARKED WITH A STAR (*)

                                   SCHEDULE 1

(Article 3.1)

Distribution Fees

From 1 July 2001 to 31 December 2001:

PRODUCTS                                             RATE

Groundwood specialties                               *

Standard newsprint                                   *

From 1 January 2002 onwards:

<Table>
<Caption>

PRODUCTS                          TOTAL ANNUAL                RATE
                                  SALES VOLUME

<S>                              <C>                          <C>
Groundwood specialties           equal to or less               *
                                 than 20,000 mt

                                 equal to or less               *
                                 than 40,000 mt

                                 more than                      *
                                 40,000 mt

Standard newsprint               equal to or less               *
                                 than  100,000 mt

                                 equal to or less               *
                                 than 200,000 mt

                                 more than                      *
                                 200,000 mt
</Table><PAGE>

                          STRATEGIC ALLIANCE AGREEMENT

         This Strategic Alliance Agreement (this "AGREEMENT"), dated for
reference October 1, 2001 (the "Effective Date"), is by and between NORSKE
SKOGINDUSTRIER ASA, a Norwegian corporation ("Norske Skog"), and NORSKE SKOG
CANADA LIMITED, a Canadian corporation ("NorskeCanada"), (Norske Skog and
NorskeCanada each sometimes a "Party" and collectively, the "Parties").

                              W I T N E S S E T H:

         WHEREAS Norske Skog formerly owned over 50% of the issued and
outstanding Common Shares of NorskeCanada;

         WHEREAS as a result of a recent acquisition and related issuance of
Common Shares by NorskeCanada, Norske Skog, is still the single largest
shareholder of NorskeCanada, but now owns 36.1% of the issued and outstanding
Common Shares of NorskeCanada, ; and

         WHEREAS Norske Skog owns or has an interest in, and produces paper at,
20 mills located in Europe, South America, Asia and Australasia and markets its
products throughout the world; and

         WHEREAS NorskeCanada owns and produces pulp and paper at four mills
located on the coast of British Columbia, Canada, and markets its products
throughout the world principally in North America, Asia and South America; and

         WHEREAS the parties have entered into a confidentiality agreement dated
August 27, 2001 by which Norske Skog has agreed to keep financial information
regarding NorskeCanada confidential as provided for in such agreement; and

         WHEREAS the parties have formed Norske Skog North America LLC for the
purposes of marketing in North America specialty papers produced by Norske Skog
and NorskeCanada respectively; and

         WHEREAS the parties have entered into an agency agreement for the
purpose of marketing and sales of a variety of grades of paper in South America;
and

         WHEREAS Norske Skog and NorskeCanada desire to form a strategic
alliance to provide a mechanism to participate in activities intended to create
mutual cost reduction and value creation opportunities for both organisations in
areas of mutual interest as set out in this Agreement, to the extent permitted
by applicable law; and

         WHEREAS each of Norske Skog and NorskeCanada acknowledge that (i) they
will not co-operate or share information to the extent or in a manner that is
contrary to applicable laws; and (ii) that the information to be exchanged
between the parties is limited to the purposes of the strategic alliance set out
in this Agreement.

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         NOW, THEREFORE, in consideration of the premises, mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Norske Skog and NorskeCanada agree
as follows:

1.          STRATEGIC ALLIANCE

      (a)   ALLIANCE. Subject to, and in accordance with, the terms and
            conditions of this Agreement, Norske Skog and NorskeCanada hereby
            establish a strategic alliance (the "Alliance") all as more fully
            set forth herein.

      (b)   PURPOSE OF THE ALLIANCE. The purpose of this Alliance is to provide
            a mechanism for the Parties to participate in activities intended to
            create mutual cost reduction or add value to the respective parties'
            enterprises. Within the spirit of this purpose, the Parties propose
            to share information and co-operate with each other to the extent
            permitted by applicable law and this Agreement as follows:

            (i)   exchange of best practises and information on manufacturing
                  developments, processes and efficiencies as well as technical
                  consultation in connection with the purchase, maintenance and
                  operation of paper machines and related equipment and the
                  operation of paper manufacturing mills;

            (ii)  cooperation on procurement initiatives for the benefit of each
                  of Norske Skog and NorskeCanada;

            (iii) exchange of information and cooperation relating to the
                  purchasing, development and use of information technology and
                  other initiatives related to information technology;

            (iv)  exchange of information and expertise concerning health and
                  safety issues;

            (v)   exchange of information and expertise concerning environmental
                  issues; In addition to areas of mutual cooperation, each party
                  commits to advise the other of specific environmental
                  strategies or initiatives that may be required by either
                  company to address issues affecting its business, reputation
                  or interests. While respecting and accommodating the interests
                  of the other party wherever possible, it is recognized that
                  each party will make independent decisions;

            (vi)  in connection with the exchange of particular expertise useful
                  for the Alliance, the transfer of personnel between the
                  Parties;

            (vii) exchange and discussion of information obtained from external
                  third party sources or non-confidential information relating
                  to current or previous

<PAGE>

                                       3

                  general market conditions for paper products such as key
                  economic conditions, technology and production developments
                  and similar matters;

             (viii) establishment of other opportunities for the purposes of
                  sharing expertise, best practices and utilization of combined
                  resources to save costs or to create value for each of the
                  Parties; and

             (ix)  formation and operation of a joint venture in the United
                  States for the sale of specialty papers,

             in each case, in a manner that does not give rise to issues or
             concerns under the laws of any jurisdiction.

2.           STRUCTURE OF THE ALLIANCE

             STEERING COMMITTEE:

             The Parties will establish a steering committee (the "Steering
Committee") to co-ordinate their respective activities in respect of the
Alliance.

      (a) DUTIES OF STEERING COMMITTEE. The Steering Committee will, in
connection with the Alliance, among other things:

            (i)   monitor the progress, review the performance and make
                  recommendations with respect to the Alliance;

            (ii)  make efforts to promptly resolve problems and disputes
                  concerning the Alliance submitted to the Steering Committee by
                  a Party;

            (iii) evaluate from time to time, the progress and results of the
                  Alliance; and

            (iv)  allocate costs incurred by a Party in respect of agreed to
                  initiatives or projects undertaken by the Alliance between the
                  Parties in a manner that fairly recognizes the costs that are
                  incurred, and the benefits to be obtained, by each Party as a
                  result of such initiative or project.

      (b) COMPOSITION OF THE STEERING COMMITTEE. The following provisions
shall apply in respect of the appointment of representatives to the Steering
Committee:

            (i)   each Party shall appoint and maintain at all times, and from
                  time to time, two individuals as its representatives (the
                  "Party Representatives") on the Steering Committee. The
                  following are the initial Party Representatives on the
                  Steering Committee:

            From NorskeCanada:

                  Bob Lindstrom

                  Stu Clugston

<PAGE>

                                       4

            From Norske Skog:

                  Ida Goodreau

                  Jan Oksum;

            (ii)  each Party may change its representatives on the Steering
                  Committee; and

            (iii) a Party Representative may from time to time appoint an
                  alternate representative to attend any meeting of the Steering
                  Committee and act as a Party Representative in place of the
                  Party Representative for whom he or she is an alternate.

      (c) MEETINGS OF THE STEERING COMMITTEE. The following provisions
shall apply in respect of meetings of the Steering Committee:

            (i)   meetings ("Meetings") of the Steering Committee shall be held
                  at the reasonable request of any Party Representative and
                  shall be held not less frequently than quarterly;

            (ii)  meetings shall be held at such places as may be agreed upon
                  from time to time by the Party Representatives. Party
                  Representatives may participate in such meetings by way of
                  telephone conference;

            (iii) the Party Representatives may permit others from, or on behalf
                  of, the Parties, to attend Meetings from time to time; and

            (iv)  the Party Representatives shall appoint from among them, or
                  shall appoint another mutually agreed upon individual to
                  record minutes from each meeting which minutes are to be
                  circulated to all Party Representatives.

      (d) RELEASE AND INDEMNITY. Each of the Parties hereby:

            (i)   releases and forever discharges each of the other Party's
                  Party Representatives from any and all actions, proceedings,
                  liabilities, claims, damages, costs and expenses which such
                  Party may at any time hereafter have against any such Party
                  Representative in respect of anything done or omitted to be
                  done by him or her in the performance of his or her duties;
                  and

            (ii)  agrees that no fee, salary, commission or other compensation
                  shall be paid jointly by the Parties to Parties
                  Representatives.

                  The provisions of this subsection 2(d) shall survive the
                  termination of this Agreement and may be relied upon by anyone
                  who, from time to time, acts as a Party Representative; it
                  being acknowledged and agreed by the Parties that each Party
                  may institute and pursue an action to enforce the terms of
                  this section on

<PAGE>

                                       5

                  behalf of a Party Representative as an intended third party
                  beneficiary of the provisions of this subsection 2(d) or
                  otherwise.

3.           GUIDELINES, RESTRICTIONS AND LIMITATIONS

         (a) PROHIBITED AREAS OF INTEREST. The Parties will at all times comply
with applicable laws and not cooperate in a manner, or share information, that
might constitute a violation of applicable laws.

         (b) COMPLIANCE PROGRAMS. Each party will establish a compliance program
for all employees to ensure they comply with applicable laws in their respective
interaction with each other within the Alliance.

         (c) INDEPENDENCE OF ACTION. Each Party acknowledges that the creation
of the Alliance will not affect the entitlement of a Party to pursue its own
interests in the market, independently of the other Party, even if the pursuit
of such interest is competitive with, or adverse to the interests of, the other
Party. Each Party is at all times entitled to determine, independently of the
other Party, the strategy that a Party will pursue in the market.

         (d) PROHIBITED ACTIVITIES AND INFORMATION. None of the Party
Representatives nor any other representative of a Party will be entitled to, and
neither Norske Skog nor NorskeCanada will permit such person to, participate in
any meeting or any other venue in which discussions take place, or in any
program or activity, that includes, or might include, measures that are aimed at
increasing prices for the products produced by Norske Skog or NorskeCanada or
that might result in the prevention, restriction or distortion and/or an undue
lessening of competition in the relevant product and geographic markets of the
Parties' products, or in respect of future pricing and market strategy of either
Party. Without limiting the generality of the foregoing, the Parties agree that
all information exchanged between them will be consistent with the purposes of
the Alliance and that they will not, nor will any representative of a Party,
exchange information regarding their respective pricing policies or decisions,
specific customer ordering; pricing, rebate or discount programs; capacity or
supply management strategies or planning; or similar pricing and supply matters.

4.           COSTS

         (a) COSTS. Each of the Parties shall pay all of their own costs and
expenses incurred in connection with this Agreement and the Alliance, including,
but not limited to, costs and expenses incurred in respect of travel, consulting
services, marketing materials or services and legal services.

5.           REPRESENTATIONS AND WARRANTIES

             As an inducement to the other to enter into this Agreement,
each Party represents and warrants to the other in respect of itself the
following:

         (a) ORGANIZATION, CORPORATE POWER, ETC. Each Party is duly organized,
validly existing and in good standing, in the case of Norske Skog, under the
laws of Norway, under which it is incorporated, and, in the case of
NorskeCanada, under the laws of the Canada, under

<PAGE>

                                       6

which it is continued, and each has the corporate power and authority to carry
on its business as it is now being conducted, and is, or shall be at the
Effective Date, duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it makes such licensing or
qualification necessary;

         (b) AUTHORITY OF PARTIES. Each Party has full power and authority to
execute, deliver and perform this Agreement and the execution, delivery and
performance of this Agreement has been duly authorized and approved by all
necessary corporate action on the part of each Party and does not require any
further authorization or consent on the part of each Party;

         (c) BINDING OBLIGATION. This Agreement has been duly executed and
delivered by each Party and constitutes the valid and binding obligation of each
Party, enforceable against each Party in accordance with its respective terms
(except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship and other laws
relating to or affecting creditors' rights generally and by general equity
principles);

         (d) NO LITIGATION. To each Party's respective knowledge, there are no
lawsuits, claims, suits, proceedings or investigations pending or threatened
against it which question the legality or propriety of the agreements set forth
in this Agreement;

         (e) CONSENTS AND APPROVALS. No consent, approval, authorization, action
or order of, or declaration, filing or registration with, or notice to, any
court, administrative agency, governmental body or other third party is required
to be made or obtained by either Party in connection with the execution and
delivery of this Agreement, the agreements contemplated hereby or the
performance of either Party's obligations hereunder;

6. CONFIDENTIALITY

         (a) OBLIGATIONS OF PARTIES. Each Party understands and acknowledges
that so long as this Agreement remains in effect, the Parties will have access
to certain Confidential Information (as defined in Section 6(b) below)
concerning their respective businesses that is a valuable and unique asset of
the respective Parties upon which their respective businesses are dependent. To
ensure the continued secrecy of this Confidential Information, and that this
Confidential Information will only be used for purposes of the Alliance, and not
in a manner that is detrimental to either Party:

            (i)   subject to paragraphs 6(a)(ii) and (v), each Party agrees not
                  to disclose Confidential Information of the other Party or
                  permit Confidential Information of the other Party to be
                  disclosed to any third party or to use such Confidential
                  Information other than for purposes of the Alliance and in any
                  event, not to use such Confidential Information in any manner
                  that is detrimental to the other Party without the prior
                  written consent of the other Party;

            (ii)  Confidential Information of the other Party may be disclosed
                  by a Party to its Party Representatives and to its directors,
                  officers, employees, auditors and counsel who need to know
                  such Confidential Information for the purposes of the Alliance
                  and in order to fulfill their responsibilities to the

<PAGE>

                  7 Party, but the Party shall issue appropriate instructions to
                  such persons to satisfy its obligations under this Subsection
                  6(a) and to otherwise comply with the terms of this Agreement
                  and shall be responsible for any and all failures by such
                  persons to comply with the terms of this Agreement;

            (iii) each Party agrees that if this Agreement is terminated for any
                  reason, neither Party shall take or retain, without prior
                  written authorization from the other Party, originals or
                  copies of any records, papers, programs, computer software,
                  documents, files, or any other matter of whatever nature which
                  is, contains or may facilitate access to Confidential
                  Information of the other Party to the extent received after
                  the date of this Agreement;

            (iv)  there shall be a rebuttable presumption that a Party's
                  disclosure to a third party of Confidential Information of the
                  other Party will result in irreparable damage or harm to such
                  other Party and that monetary damages will not be adequate to
                  compensate such other Party for any damage or harm resulting
                  from such disclosure, and any Party who seeks injunctive or
                  other equitable relief against the other Party in respect of
                  any disclosure of the Party's Confidential Information to a
                  third party by such other Party will not be required to prove
                  that such disclosure will result in irreparable damage or harm
                  to the Party and that monetary damages will not be adequate to
                  compensate the Party for any damage or harm resulting from
                  such disclosure; and

            (v)   a Party may disclose Confidential Information when disclosure
                  by such Party is required under applicable law or stock
                  exchange or securities commission rule or policy, or by a
                  valid subpoena or other court or governmental order, decree,
                  regulation or rule; provided, however, that if disclosure is
                  required under this provision, such Party shall advise the
                  other Party of the requirement to disclose Confidential
                  Information prior to such disclosure and as soon as reasonably
                  practicable after such Party becomes aware of such required
                  disclosure or aware that an action has been taken seeking such
                  disclosure unless such notice is legally prohibited; and
                  provided further, that upon the request of the other Party,
                  such Party agrees to reasonably cooperate with and at the
                  expense of the other Party in any reasonable and lawful
                  actions which the other Party takes to resist such disclosure,
                  limit the information to be disclosed or limit the extent to
                  which the information so disclosed may be used or made
                  available to third parties.

         (b) "CONFIDENTIAL INFORMATION". For purposes of this Agreement and
except as provided in Subsection 6(c) below, "Confidential Information" of a
Party is information of whatever nature in the possession or control of that
Party that is not generally known or available to members of the general public,
including any copies, worksheets, or extracts from any of the above.

<PAGE>

                                       8

         (c) EXCEPTIONS. The term "Confidential Information" of a Party shall
not include any information which (i) is or becomes generally available to and
known by the public (other than as a result of an impermissible disclosure
directly or indirectly by the other Party), (ii) is or becomes available to the
other Party on a non-confidential basis from a source other than the Party,
provided, that such source is not and was not bound by a confidentiality
agreement with, or other obligation of secrecy to, the Party, or (iii) has been
or is hereafter independently acquired by the other Party without violating any
confidentiality agreement with, or other obligation to, the Party.

         (d) SECURITIES LAWS. Each Party acknowledges that it is aware, that
securities laws prohibit any person who has received material non-public
information concerning a public company from dealing in securities of that
public company or from communicating such material non-public information to any
other person in circumstances in which it is reasonably foreseeable that such
person is likely to deal in such securities and that any breach of paragraph
6(a) of this Agreement may constitute a breach of applicable securities or other
laws.

         (e) OWNERSHIP OF CONFIDENTIAL INFORMATION. Each Party shall own and
shall be entitled to use and otherwise exploit, in its sole discretion, all
information which such Party has acquired independently of the other Party or
which is not Confidential Information and neither Party grants any rights or
interest it may have in its Confidential Information to the other Party.

         (f) SHARING OF INFORMATION. Neither Party is
obligated to share with the other Party any of its Confidential Information or
other information, other than as expressly provided for in this Agreement.

7.       LIMITATION OF LIABILITY; NO THIRD PARTY BENEFICIARIES

         (a) LIMITATION OF LIABILITY. In no event shall either party be liable
to the other for any special, incidental, punitive, statutory or consequential
damages or any multiple of actual damages, whether based on breach of contract,
tort (including negligence), or otherwise, and whether or not that party has
been advised of the possibility of such damage.

         (b) NO THIRD PARTY BENEFICIARIES. Except as expressly provided in
subsection 2(d), this Agreement does not confer upon any person, and nothing
expressed or referred to in this Agreement shall be construed to give any
person, other than the Parties to this Agreement, any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are
otherwise for the sole and exclusive benefit of the Parties hereto.

         (c) NO LIABILITY FOR ACTS OF THE OTHER. Neither Party accepts any
liability for or arising out of the actions of the other Party.

8.       TERMINATION

         BY AGREEMENT. This Agreement may be terminated at any time by the
written agreement of the Parties or by not less than six months written notice
by either Party to the other. This Agreement will immediately terminate if it is
determined that the actions of the Parties pursuant to this Agreement are in
contravention of any laws.

<PAGE>

                                       9

9.       GOVERNING LAW; JURISDICTION

         (a) GOVERNING LAW. This Agreement shall be governed by, and in
accordance with, the internal laws of the Province of British Columbia, Canada,
without giving effect to the conflict of laws principles thereof.

         (b) JURISDICTION. Each Party agrees (i) that any action, dispute or
proceeding relating to this Agreement may be brought in the Courts of the
Province of British Columbia sitting in Vancouver, British Columbia, and freely
submits to the jurisdiction of such courts, (ii) that it freely waives any right
to, and will not, oppose any such action or proceeding in such courts on the
basis that the jurisdiction is not a convenient forum, and (iii) not to oppose
the enforcement against it in any other jurisdiction of any judgement or order
properly obtained from such a British Columbia court.

10.      NOTICES

All notices provided for or permitted to be given under this Agreement shall be
in writing. All notices or other communications to be sent to a Party under this
Agreement shall be sent to or made at the following addresses, or such other
address as the Parties may specify by notice to each other from time to time in
accordance herewith:

         If to Norske Skog, at the following address:

         Norske Skogindustrier ASA
         Oksenoyveien 80
         Lysaker, Norway

         Attention:      President & Chief Executive Officer
         Facsimile No.:  011-447-67-599-190

         If to NorskeCanada, at the following address:

         Suite 900, 700 West Georgia Street
         Vancouver, British Columbia
         V7Y 1B3

         Attention:     President & Chief Executive Officer
         Facsimile No.: 604-654-4145

A notice or other communication given under this Agreement shall be effective
upon receipt by the person to whom such notice was sent.

11.      MISCELLANEOUS

(a) NO PARTNERSHIP - INDEPENDENT CONTRACTORS. Nothing contained in this
Agreement is intended or shall be construed to create any partnership or
association between the Parties, and any inferences to the contrary are hereby
expressly negated. The relationship of the Parties is and

<PAGE>

                                       10

shall at all times be solely that of independent contractors. No agency,
employment or any fiduciary relationship is created by this Agreement. Neither
Party shall do anything that has the effect of creating an obligation by the
other Party to a third party.

         (b) ASSIGNMENT. This Agreement is binding upon and enures to the
benefit of each Party's respective successors. Neither Party may assign this
Agreement, or any rights or obligations hereunder, whether by contract or by
operation of law, except with the express written consent of the other Party,
which consent may be granted or withheld in that Party's sole discretion.

         (c) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the Parties and there are no
warranties, representations or other agreements between the Parties in
connection with the subject matter hereof except as specifically set forth
herein or contemplated hereby. Except as otherwise provided herein, no
supplement, modification or waiver of this Agreement shall be binding unless it
shall be specifically designated to be a supplement, modification or waiver of
this Agreement and shall be executed in writing by both of the Parties.

         (d) WAIVER. No failure on the part of a Party to exercise , and no
delay in its exercise of, any right, power or privilege under this Agreement
shall operate as a waiver thereof. No single or partial exercise by a Party of
any right, power or privilege under this Agreement shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

         (e) HEADINGS. The use of headings in this Agreement is for convenience
only and shall not affect the construction or interpretation of this Agreement.

         (f) SCHEDULES. Each Schedule referred to in this Agreement is a part
of, and hereby incorporated into, this Agreement. Any reference to "this
Agreement" shall be deemed to include the Schedules hereto.

         (g) SEVERABILITY. If one or more of the provisions of this Agreement
are at any time found to be invalid by a court, tribunal or other forum of
competent jurisdiction, or otherwise rendered unenforceable, such decision shall
not have the effect of invalidating or voiding the remainder of this Agreement.
This Agreement shall be deemed amended by modifying or severing such provisions
as necessary to render it valid, legal and enforceable while preserving its
intent, or if that is not possible, by substituting another provision that is
valid, legal and enforceable which materially effectuates the Parties' intent.
Any such invalid or unenforceable provision or provisions shall be severable
from this Agreement, so that the validity or enforceability of the remaining
provisions of this Agreement, or the validity of the provisions) in question in
any other jurisdiction, shall not be affected thereby.

         (h) BANKRUPTCY. Each Party must notify the other if it becomes
insolvent or enters into any bankruptcy or insolvency proceedings.

<PAGE>
                                       11

         (i) SURVIVAL. The provisions of Sections 2(d), and Sections 6, 7, 10
and 11 inclusive shall survive the termination of this Agreement for whatever
reason, subject to any applicable statute of limitations and subject to any
provisions contained in such sections.

         (j) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different Parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Agreement.

Executed this 6th day of February, 2002 by:

NORSKE SKOGINDUSTRIER ASA

by     /s/ Jan Reinas
       --------------------------------------
       President & Chief Executive Officer

NORSKE SKOG CANADA LIMITED

by     /s/ Russell J. Horner
       --------------------------------------
       President & Chief Executive Officer

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