EXHIBIT 10.9
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 THE WASHINGTON POST COMPANY, a
Delaware corporation having its principal place of business
at 1150 15th Street, N.W., Washington, D.C. ("Buyer").
W I T N E S S E T H
Section 1. Sale and Purchase: Subject to the
terms and conditions of his 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 11,000
1981 22,500
1982 30,000
1983 and each 50,000
year thereafter
If the Commencement Date occurs in a year after 1980, the
minimum tonnage for such year shall be adjusted by
multiplying it by a fraction of which the numerator shall
be the number of remaining months of such year commencing
with the Commencement Date and the denominator shall be
twelve (12), but Buyer agrees to increase the minimum
tonnage with respect to any year prior to 1983, up to
50,000 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 Kimberly-
Clark 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 time Seller 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, nonreturnable 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 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 damage 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, Buyers 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 this 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 Brant-Allen Industries, Inc.
80 Field Point Road
Greenwich, Connecticut 06830
To Buyer: The Washington Post Company
1150 15th Street, N.W.
Washington, D.C. 70071
Attention: Virgil Schroeder
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 BRANT-ALLEN INDUSTRIES, INC.,
General Partner
By: /s/ Peter M. Brant
________________________________
Name: Peter M. Brant
THE WASHINGTON POST COMPANY
By: /s/ Christopher M. Little
________________________________
Name: Christopher M. Little