EXHIBIT 10.8
AGREEMENT made this 19th day of May, 1978,
between BEAR ISLAND PAPER COMPANY, a Virginia limited
partnership having its principal office in Hanover County,
Virginia ("Seller") and DOW XXXXX & COMPANY, Delaware
corporation having offices in South Brunswick, New Jersey
("Buyer").
W I T N E S S E T H:
Section 1. Sale and Purchase: Subject to the
terms and conditions of this Agreement, Seller undertakes
to sell to Buyer and Buyer undertakes to purchase from
Seller a minimum of not less than the following amounts
(expressed in terms of short tons of 2,000 pounds each) of
29/30 pound basis weight standard web offset white
newsprint paper (hereinafter called "newsprint") from the
Commencement Date until the expiration of this Agreement:
Calendar Year Tons of Newsprint
------------- -----------------
1980 17,000
1981 25,000
1982 and each 30,000
year thereafter
Notwithstanding the foregoing, if the Commencement Date is
(i) July 1, 1980, the minimum tonnage for 1980 shall be
15,000 tons, (ii) any subsequent date during 1980, the
minimum tonnage for 1980 shall equal 15,000 multiplied by
a fraction of which the numerator shall be the number of
months remaining in such year commencing with the
Commencement Date and the denominator shall be six (6), or
(iii) any subsequent date, the minimum tonnage for the
year in question shall equal the applicable minimum
tonnage set forth above multiplied by a fraction of which
the numerator shall be the number of months remaining in
such year commencing with the Commencement Date and the
denominator shall be twelve (12). Buyer agrees, however,
to increase the minimum tonnage with respect to any year
prior to 1982, up to 30,000 tons per year, to the extent
its requirements in such year exceed said minimum tonnage
plus the amounts it is then required to purchase under
then existing contracts. The term, "Commencement Date" as
used herein shall mean the first day of the calendar month
following the month in which the newsprint mill which
Seller is presently engaged in constructing in Hanover
County, Virginia (the "Mill") is capable of producing
8,000 short tons of saleable newsprint per month.
Newsprint shall be shipped to and received by Buyer at a
substantially uniform rate throughout the year. Except as
provided in this Section and in Sections 7 and 16 hereof,
Seller and Buyer agree that the minimum quantity of
newsprint to be sold and purchased each year will not be
reduced by either party during the term of this Agreement.
Unless Buyer otherwise consents in writing prior to
shipment, Seller shall only supply Buyer hereunder with
newsprint produced by the Mill.
Section 2. Term: This Agreement shall
terminate on the first to occur of December 31, 2000 or
the December 31 following the twentieth anniversary of the
Commencement Date.
Section 3. Price: The price per ton to be paid
by Buyer shall be the Average Publisher Price per ton for
such newsprint (presently $320 for 30 pound basis weight
newsprint) in effect at the date title passes to Buyer for
shipments of rolls in carload lots, freight allowed or
prepaid to destinations within the continental United
States east of the Mississippi River designated from time
to time by Buyer (hereinafter referred to as the "Basic
Price"). If Buyer requires shipment to a destination
which is not within the area of the continental United
States east of the Mississippi River, freight outside of
said area shall be for Buyer's account. The "Average
Publisher Price" shall mean the average of the publisher
prices publicly quoted from time to time by Bowaters
Southern Paper Corp., International Paper Company, and
Xxxxxxxx-Xxxxx Corporation, or the successor of any such
company. If any such company or successor shall cease to
publicly quote such prices for any reason, Seller with
Buyer's consent (which shall not be unreasonably withheld)
shall substitute another, comparable, major newsprint
producer. If Buyer elects to purchase newsprint hereunder
on a basis other than freight allowed or prepaid, the
Basic Price of the newsprint so purchased shall be reduced
in the amount of the "Freight Allowance" then in effect.
The "Freight Allowance" shall mean an amount equal to $17
per ton increased or decreased, as the case may be, by the
percentage by which the I.C.C. published common carrier
rate on newsprint (if Buyer receives by truck), or the
published rate charged by the Southern Freight Association
on groundwood papers (if Buyer receives by rail), changes
between the Commencement Date and the date title passes to
Buyer. If at any xxxx Xxxxxx charges any other purchaser
a freight allowed or prepaid price pursuant to a contract
with a term of two or more years which is lower than the
Basic Price and affords the Seller a lower net return,
f.o.b. the Mill, the Basic Price hereunder will be reduced
to equal such lower price.
Section 4. Upcharges: Seller's price increases
(or upcharges) as announced by Seller from time to time
and in effect at the date title passes to Buyer shall
apply to all variations from newsprint in rolls and all
changes from standard basis weight or standard finishes;
such announced price increases will be in accordance with
the announced increases from time to time in the Average
Publisher Price for such newsprint.
Section 5. Agency: Except as to those
shipments as to which Buyer notifies Seller in writing
that Buyer will make shipping arrangements, Buyer
authorizes Seller and Seller hereby undertakes, without
cost to Buyer, to route all shipments hereunder and
determine the carrier and obtain insurance coverage with
respect to newsprint in transit from the Mill to the
destinations specified by Buyer.
Section 6. Title: Title to newsprint shall
pass to Buyer upon the loading on a car or truck at the
Mill consigned to Buyer or to the order of Buyer.
Section 7. Specifications:
(a) The basis weight of newsprint to be
delivered hereunder shall be approximately 30 pounds to
500 sheets 24" x 36", without reference to production
basis; 2-1/2% over or under such basis weight on
individual shipments shall be considered good delivery.
Notwithstanding the foregoing, Buyer may require, and
Seller shall be obligated to produce and sell to Buyer
hereunder, newsprint with a basis weight of 29 pounds or
less, to 500 sheets 24" x 36", at a price determined in
accordance with Sections 3 and 4 hereof, and the minimum
quantity of newsprint to be sold and purchased hereunder
shall be decreased proportionately.
(b) Buyer shall provide Seller by the fifteenth
day of each month with complete specifications (expressed
in tons) respecting core size, roll widths and diameter
for the shipments to be made during the succeeding month;
if Seller does not receive such specifications, Seller may
deliver in accordance with the specifications last
received.
Section 8. Cores: Rolls shall be wound on
nonreturnable paper cores having three inches inside
diameter. Returnable metal tip cores will be furnished at
the request of Buyer. Returnable cores will be charged to
Buyer on a memo basis at the rate of $1.00 per core which
shall be credited to Buyer's account upon their return in
good condition, freight prepaid (unless the parties agree
to other terms), to the Mill.
Section 9. Invoices: Invoices shall be based
on the gross weight of rolls on shipment, including paper,
wrappings, non-returnable cores and plugs but excluding
returnable cores.
Section 10. Truckload or Carload Lots:
Newsprint shall be ordered and shipped in not less than
full forty (40) foot truckload lots or fifty (50) foot
carload lots.
Section 11. Terms of Payment: Terms of payment
shall be net cash not later than the-fifteenth day of the
month for all newsprint delivered during the previous
month.
Section 12. Interest: Interest at the rate of
1/2 of 1% per annum over the prime rate charged from time
to time by Citibank, N.A. in New York City, shall be paid
by Buyer on all unpaid amounts from the due date until the
date of payment.
Section 13. Claims: In case of any claim,
other than a transit claim, arising with respect to any
shipment under this Agreement, Buyer shall notify Seller
thereof in writing fifteen days after the date of
discovery by Buyer of the facts giving rise to such claim
and the newsprint involved will be held by Buyer for
inspection by Seller; if Buyer fails to give such notice,
Buyer will be deemed to have waived such claim. If Seller
fails to inspect the newsprint involved within fifteen
days of receipt of such notice, such claim shall be deemed
to be admitted by Seller. Buyer shall notify Seller of
any transit claim arising with respect to any shipment
hereunder arranged by Seller pursuant to Section 5 hereof
and shall appoint Seller as its agent to take all action
which may be necessary or advisable to prosecute such
claim. Seller undertakes to prosecute any such claim to
the best of its ability.
Section 14. Special or Consequential Damages:
Seller shall not in any event be liable for special or
consequential damages under this Agreement.
Section 15. Newsprint Left on Cores: No
allowance shall be made for waste or after delivery of the
newsprint to Buyer or for newsprint left on cores.
Section 16. Force Majeure: If and whenever
Seller's production or delivery of newsprint is prevented,
impaired, reduced or restricted by reason of force
majeure, strikes, floods, fires, accidents, transportation
contingencies, embargoes, or shortages of water, power,
labor, necessary materials or supplies, war, acts of God,
or the public enemy, riot or civil commotion, compliance
with any law, prohibition, restraint, order, direction,
request, rule or regulation promulgated by any government,
federal, state, or provincial or any subdivision or agency
thereof, or by reason of any construction delays or any
other cause, whether of a similar or dissimilar nature,
beyond its reasonable control, Seller shall first reduce
the quantities of newsprint being supplied to The Bato
Company, Inc. ("Bato"), and all entities controlled by or
under common control with Bato, and, after such quantities
being supplied to Bato and all such entities are reduced
to zero, Seller may without liability reduce the quantity
herein specified in proportion to the reduction or
restriction upon Seller's production for or delivery to
purchasers other than Bato and such entities. If due to
any cause described in the foregoing sentence, or due to
any reduction in Buyer's requirements for newsprint
resulting from decreased consumption, Buyer's ability to
accept or utilize newsprint is prevented, impaired,
reduced or restricted, then Buyer may without liability
reduce the quantity herein specified to be purchased in
proportion to the reduction or restriction upon Buyer's
ability to accept or utilize newsprint, provided that,
before Buyer may reduce the quantity herein specified, it
must first reduce its purchases of newsprint from its
other suppliers to the extent its contracts with such
suppliers permit. In any such case, the newsprint which
Seller is unable to produce or deliver or which Buyer is
unable to accept or utilize shall be eliminated from this
Agreement with respect to the year in which such reduction
occurs and the parties hereto shall be relieved of all
liability with respect thereto. Notwithstanding the
foregoing, Buyer agrees to accept shipments in transit
when any of the foregoing events occurs.
Section 17. Default: If and whenever Buyer
shall fail to pay any amount when due under this Agreement
or subject to Section 16, shall fail to fulfill any other
provision of this Agreement, Seller at its option may,
while such default continues, make deliveries subject to
payment in advance of shipment, or suspend deliveries
under this Agreement, and if such failure or default
continues for thirty (30) days after written notice
thereof Seller may, at its option (whether or not
deliveries have been previously suspended), terminate this
Agreement without incurring any liability for any losses
or damages which may result from any such suspension or
cancellation, without prejudice to Seller's right to
recover all amounts remaining unpaid under this Agreement
and to recover all damages sustained by Seller by reason
of such failure or default.
Section 18. No Waiver: Any condoning, excusing
or overlooking of any default, breach or non-observance by
any party at any time or times in respect of any term or
condition of this Agreement shall not operate as a waiver
of the rights hereunder of such party in respect of any
subsequent default, breach or non-observance.
Section 19. General:
(a) All amounts referred to in this Agreement
are expressed in United States funds.
(b) Neither of the parties hereto shall have
the right to assign any of its rights or obligations under
this Agreement to any other party without the prior
written consent of the other party hereto, except that
Buyer may assign this Agreement to any corporation
controlling, controlled by, or under common control with,
Buyer, and Seller may assign his Agreement to any person,
corporation, partnership or other entity succeeding to the
ownership of the Mill.
(c) Any notice pursuant to this Agreement shall
be delivered personally or sent by registered mail,
addressed as follows (or at such other address as either
party may notify the other of in writing for such
purpose):
To Seller: Bear Island Paper Company
c/o Xxxxx-Xxxxx Industries, Inc.
00 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
To Buyer: Dow Xxxxx & Company., Inc,
X.X. Xxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxx
and shall be deemed to have been received upon delivery
or, if mailed five (5) business days after having been
mailed. Each party shall give prompt notice to the other
of a change of address.
(d) This Agreement shall be interpreted and
construed in accordance with the laws of the State of
Virginia.
IN WITNESS WHEREOF this Agreement has been
executed on the date first written above.
BEAR ISLAND PAPER COMPANY
By XXXXX-XXXXX INDUSTRIES, INC.,
General Partner
By /s/ Xxxxx X. Xxxxx
_____________________________
Name: Xxxxx X. Xxxxx
Title: PRESIDENT
DOW XXXXX & COMPANY, INC.
By /s/ Xxxxxx X. Xxxxx
_____________________________
Name: Xxxxxx X. Xxxxx
Title: VICE PRESIDENT
