Exhibit 33
MARKETING AND DISTRIBUTION
AGREEMENT
This Marketing and Distribution
Agreement (this “Agreement”) is made and entered into
as of August 1, 2005 by and between Arrow Pacific Resources
(s) Pte. Ltd., of Singapore, Arrow Ackland Resources (PNG)
Ltd., Arrow Musa Resources (PNG) Ltd., and Arrow Pongani Resources
(PNG) Ltd., of Papua New Guinea (collectively
“Supplier”), and Arrow Resources Development Ltd., a
Bermuda limited company (“Distributor”).
WHEREAS Supplier develops, collects
and sells various lines of timber resource products of West
Collingwood Bay and Dyke Ackland, Oro Province, Musa, Oro Province
and Pongani, Central Province, Papua New Guinea;
WHEREAS Distributor is engaged in
the worldwide marketing, distribution and sale of various timber
resource products; and
WHEREAS Supplier and Distributor
wish to enter into a worldwide exclusive agreement under which
Supplier will supply and sell all of their timber resource products
through Distributor, and Distributor will market, promote,
distribute and sell those timber resource products;
NOW THEREFORE for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, it is hereby agreed as
follows:
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1.
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Product
Rights and Obligations .
Distributor will have the exclusive right to market, distribute and
sell worldwide (“Territory”) the timber resource
products. Supplier may from time to time advise Distributor of new
timber resource products or product improvements available for sale
by Distributor in the Territory. All of the timber resource
products, new products and product improvements and all derivatives
such as paper, pulp, woodchips and lumber will be collectively
referred to herein as the “Products” and one of them as
a “Product.”
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2.
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Best Efforts
Obligations. Distributor
will use its best commercial efforts to market, promote, distribute
and sell the Products in the Territory according to good business
custom in the Territory. Without limiting the generality of the
foregoing, Distributor agrees to:
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(a)
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Handle all
inquiries, deliver all samples, accept all orders, fill all orders
and otherwise service all customers (except those which have
demonstrated themselves to be poor credit risks) for Products in
the Territory.
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(b)
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Maintain a
properly trained and managed sales force of adequate size
effectively to promote, sell and distribute the Products throughout
the Territory and to allow Supplier’s personnel to meet from
time to time with such personnel, at reasonable times, for
reasonable amounts of time and with reasonable advance notice, for
the purpose of discussing the Products and their promotion,
marketing, sale and use.
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(c)
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Promote and
develop sales of Products in the Territory.
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(d)
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Market and
distribute all Products for which there is customer demand in the
Territory and promptly service all accounts for
Products.
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(e)
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Provide
Supplier with a report upon its reasonable request detailing any
upcoming sales and marketing activities.
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(f)
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Keep Supplier
informed with respect to its activities
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3.
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Product
Prices . Distributor will
in its sole discretion establish and set its own prices within the
Territory. Distributor will invoice and collect payments from all
purchasers of Products in the Territory. Distributor will provide
Supplier with copies of all its price lists for Products.
Distributor shall be entitled to retain ten (10%) percent of
the gross revenue earned by Distributor from the sale of the
Products. Supplier shall receive the remainder of the said gross
revenue.
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4.
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Payment
Terms . Supplier shall
receive 90% of all amounts drawn down on letters of credit that are
provided by customers for the payment for Products, after payment
by Supplier or such customers of all fees and expenses of the
issuing bank. This 90% shall be paid to Supplier at the time of
each such draw down. Distributor shall receive 10% of all amounts
drawn down on letters of credit that are provided by customers for
the payment for Products. This 10% shall be paid to Distributor at
the time of each such draw down.
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5.
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Freight,
Insurance, Duties, Taxes and Other Charges . Supplier will pay all transportation charges
and insurance charges arising in connection with the transportation
of the Products from its facilities until delivery on board the
common carrier at the Port of Shipment. “Port of
Shipment” means the place or lockpoint where Supplier
delivers the Products for export (by ship or plane) to the
Territory from the country where they were produced; in this
Agreement, the Port of Shipment means Papua, New Guinea. The
purchaser of the Product or Products will pay all other charges
incurred in connection with the exportation of the Products from
the Port of Shipment and importation into the Territory, including,
but not limited to, all transportation charges from the time the
Products are delivered on board the common carrier at the Port of
Shipment. The purchaser of the Product or Products will at its cost
maintain insurance on the Products from the time of their delivery
on board the common carrier at the Port of Shipment and will
prosecute any claims with its insurance earners.
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6.
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Licenses and
Process Documentation .
Supplier will at its expense obtain any necessary licenses and
process documentation, including customs forms, required to allow
the Products to be admitted into and resold in the Territory.
Supplier will cooperate with Distributor by providing such
underlying documentation, certifications, explanations and other
assistance as Distributor may reasonably request.
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7.
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Passage of Title and Risk of
Loss . Title to the
Products shall pass from Supplier directly to the purchaser of the
Product or Products upon the latter of (i) delivery of the
Product or Products to the purchaser, and (ii) receipt by
Distributor of an irrevocable letter of credit, in form and
substance acceptable to Distributor and from a financial
institution acceptable to Distributor to cover the total cost of
the Product or Products. Risk of loss shall remain with Supplier
until such time as title shall pass to the purchaser.
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2
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8.
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Reports . Distributor agrees to provide Supplier with
the reports described below within 30 days after the end of the
respective periods to which the reports relate:
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(a)
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Unit sales by
product line, reported on a monthly and cumulative year-to-date
basis.
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(b)
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Sales in local
currency value at Distributor’s invoice prices exclusive of
any taxes on sales by product line, reported on a monthly and
cumulative year-to-date basis.
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(c)
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Inventories on
hand by product line, reported on a monthly basis.
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Distributor reserves the right to
promulgate to Supplier a form of report for completion and use by
Distributor pursuant to this paragraph 8.
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9.
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Non-Competition Obligations
. Supplier shall not at any time
during the term of this Agreement market or promote the Products in
the Territory or sell to another distributor or other party located
in the Territory any of the Products provided.
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10.
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Inspection
of Records . Supplier
may, for a reasonable amount of time and with reasonable advance
notice to Distributor, inspect and discuss with Distributor those
of its records which relate to Distributor’s performance of
its obligations under this Agreement.
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11.
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Intellectual
Property . Distributor
may advertise or promote, market and sell the Products under the
trade names, trademarks, package get-ups’ trade dresses and
trade styles’ and using the packaging and labeling, provided
by Distributor (any one or more of which is sometimes referred to
as “Trademark(s))”, and Distributor may affix a sticker
to the Products identifying Distributor as the source of, or entity
responsible for the Products in the Territory. Any rights acquired
by Distributor within the Territory by virtue of performance of its
obligations under this Agreement to the know how, trade secrets,
patents, copyrights or trademarks of Distributor shall be retained
by Distributor.
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12.
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Product
Ideas . During the term
of this Agreement, Distributor may itself provide or may pass on
from others ideas, concepts or comments which result in new
products or product improvements from Supplier. In the event that
Supplier decides to use such idea, concept or comment, Supplier and
Distributor will meet to discuss terms of use of such ideas,
concepts or comments. If (a) the source of the idea, concept
or comment, be it Distributor or other entity or person, has
applied or applies for a patent in the Territory on a new product,
product improvement or product feature resulting from the idea,
concept or comment, and if (b) Distributor passes on such
idea, concept or comment to Supplier and, as a result, Supplier
develops and sells a new product, product improvement or product
feature embodying such idea, concept or comment, and if (c) a
patent issues in the Territory as a result of the application, and
if (d) the new product, product improvement or product feature
embodies the invention set forth in one or more valid claims of the
issued patent, then Supplier will pay Distributor or other entity
or person (which is the source of the item, concept or comment) a
reasonable royalty and Distributor will grant to Supplier or cause
such other entity or person to grant to Supplier a license or
licenses to manufacture, distribute and sell anywhere in the world
articles embodying the invention set forth in the valid claims of
the issued patent. Notwithstanding the foregoing, if the invention
cannot be exploited by Distributor independently of any of the
Trademarks, then Distributor will grant to Supplier or cause such
other entity or person to grant to Supplier an exclusive license or
licenses to manufacture, distribute and sell anywhere in the world
articles embodying the invention set forth in the valid claims of
the issued patent.
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13.
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Product
Registrations or Approvals .
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(a)
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Supplier or
Distributor may be required to obtain approval, registration and
reimbursement prices for all or some of the Products from one or
more governmental or quasi-governmental authorities in the
Territory (“Authorities”) Distributor will use its best
efforts to obtain for each product all applicable approvals or
registrations.
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(b)
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All Product
registrations or approvals will be obtained at Supplier’s
expense in Distributor’s name. In the event that the laws and
regulations of the Territory require that such registrations or
approvals be in Supplier’s name, then Supplier will hold such
registrations or approvals for the benefit of and in trust for
Distributor.
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14.
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Confidentiality of Information
. Supplier will maintain the
confidentiality of trade secrets and other confidential information
received from Distributor pertaining to market research, marketing,
sales, research and development, manufacturing, packaging, and
product safety, efficacy, function or use. Also, Supplier will not
sell
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