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AGREEMENT TO AMEND WOOD FIBER
SUPPLY AGREEMENT
THIS AGREEMENT is made and entered into this 25th day of August, 1997,
between ST. JOE TIMBERLAND COMPANY, F/K/A ST. JOSEPH LAND AND DEVELOPMENT
COMPANY, a Florida corporation (hereinafter "St. Joe"), and FLORIDA COAST PAPER
COMPANY, L.L.C., a Delaware Limited Liability Company (hereinafter "Florida
Coast"), and shall hereinafter be referred to as "Amendment Agreement."
W I T N E S S E T H :
WHEREAS, St. Joe and Florida Coast entered into a Wood Fiber Supply
Agreement on May 30, 1996, attached hereto as Exhibit "A", (hereinafter "Fiber
Agreement"), and
WHEREAS, St. Joe and Florida Coast desire to change, amend, and/or
alter certain terms in the Fiber Agreement while leaving other terms in the
Fiber Agreement in place;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good an valuable consideration, St. Joe and Florida
Coast agree to the following:
1. DELIVERY AND ACCEPTANCE AMOUNTS.
1.1. During the period from August 25, 1997 through and including
May 30, 1998:
St. Joe will deliver to Florida Coast, and Florida Coast will
accept from St. Joe a total volume of 615,400 tons, in weekly
increments of 15,385 tons per week of pulpwood and wood chips;
A minimum of 13,460 tons per week of the pulpwood and wood
chips St. Joe delivers to Florida Coast and Florida Coast
accepts from St. Joe under its Paragraph 1.1 will
originate from land owned by St. Joe in fee;
St. Joe will provide to Florida Coast, within twenty
(20) days of signing this Amendment Agreement, a list of all
private pulpwood and wood chips volume obligations which St.
Joe is required to accept by May 30, 1998. This volume will
not exceed 150,000 tons;
In satisfying its volume requirements under this
Paragraph 1.1., St. Joe shall receive no credit for trade
wood, defined as wood chips received by St. Joe from solid
wood product customers in return for St. Joe selling solid
wood products to those customers.
The volume of wood chips in the mix of wood chips and
pulpwood which St. Joe delivers to Florida Coast shall not be
less than 25% and not greater than 55%.
1.2. For the period from May 31, 1998 through the end of the Fiber
Agreement:
St. Joe will deliver to Florida Coast and Florida Coast will
accept from St. Joe 13,460 tons of pulpwood and wood chips per
week, equating to an annual volume of 700,000 tons of pulpwood
and wood chips;
All pulpwood and wood chips delivered by St. Joe under
this Paragraph 1.2 shall originate from land owned by
St. Joe in fee;
In satisfying its volume requirements under this
Paragraph 1.2., St. Joe shall receive no credit for trade
wood, defined as wood chips received by St. Joe from solid
wood product
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customers in return for St. Joe selling solid wood products to
those customers.
2. SPECIFICATIONS AND PRICING FOR PULPWOOD AND FOR
WOOD CHIPS.
2.1. The following specifications shall apply to pulpwood and wood
chips delivered by St. Joe to the Florida Coast mill at Port
St. Joe:
Pulpwood shall be cut to a 2 1/2 inch small end top;
Wood chips shall meet those specifications used at the Stone
Container Corporation paper mill in Panama City, Florida, as
of the date of the signing of this Amendment Agreement. These
specifications are attached hereto and made a part hereof as
Exhibit "A".
2.2. Pulpwood which St. Joe brings to its chip plant in Lowry or
Newport for ultimate delivery to Florida Coast as wood chips,
shall be cut to a 2 1/2 inch small end top. In return, Florida
Coast will pay a $0.35 per ton premium to St. Joe for all wood
chips shipped to Florida Coast from either the Lowry or the
Newport chip plant.
2.3. St. Joe will install chip screens at the Lowry chip plant in a
commercially reasonable time, and Florida Coast will then pay
an additional $0.50 per ton premium for wood chips from the
Lowry plant for a five-year period beginning once the screens
are in place and in use. Such beginning date shall be
confirmed in writing by the parties.
2.4. The $0.35 and $0.50 premiums referred to in Paragraphs 2.2 and
2.3 above, will be added to the weekly invoice amount which
St. Joe sends to Florida Coast and shall not be subject to the
quarterly indexing of prices referred to in the Fiber
Agreement.
2.5. The volume of wood chips in the mix of wood chips and pulpwood
which St. Joe delivers to Florida Coast shall be not less than
25% and not greater than 55% of the annual 700,000 ton mix of
wood chips and pulpwood which St. Joe delivers to Florida
Coast.
2.6. Bark content shall not exceed 1% of the chip load weight. The
portion of the weekly average bark content based on sample
analysis that exceeds 1% but is less than 3.9% shall be
deducted as cull. If a load contains over 4% bark, confirmed
by a sample analysis, the entire load will be rejected.
Florida Coast shall pay St. Joe for loads rejected at the fuel
price rate. Both parties agree that the objective is to
produce and accept loads containing 1% bark or less and that
this procedure is for occasional loads only. Both parties also
agree that a bark specification does not apply to any pulpwood
deliveries.
3. CASH PAYMENT AND CANCELLATION OF INVOICES.
On the date this Amendment Agreement is signed by St. Joe and
Florida Coast, Florida Coast shall make a one-time payment of
$70,000 to St. Joe, and St. Joe shall cancel all invoices it
issued under the Fiber Agreement to Florida Coast from April
14, 1997, through August 25, 1997.
4. LIQUIDATED DAMAGES.
4.1. If Florida Coast does not accept pulpwood and wood chips at
the paper mill in Port St. Joe, Florida, as provided in
Paragraph 1 of this Amendment Agreement for a period longer
than thirty (30) consecutive days, either:
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a. Florida Coast will pay to St. Joe an amount of
$50,000 per week, prorated for each day beyond the
first thirty days which the mill does not receive
pulpwood or wood chips, or
b. Florida Coast shall instruct St. Joe to deliver the
amounts of pulpwood and wood chips stated in
Paragraph 1 above to third parties at destinations
other than the Port St. Joe mill, and shall pay to
St. Joe all additional delivery costs incurred for
delivery to the third parties. Any savings in
delivery cost realized as a result of the sale to a
third party will be credited to Florida Coast. The
specifications provided herein will apply to such
deliveries.
4.2. The provisions of Paragraph 4.1 above are intended as
liquidated damages, and specifically recognize that St. Joe
incurs substantial costs, expense, and business interruptions
if Florida Coast does not receive pulpwood or wood chips under
this contract for a period in excess of thirty (30) days.
4.3. The provisions of Paragraph 4.1 above do not apply if the Port
St. Joe mill is closed due to an Act of God or a force majeure
event.
4.4. If Florida Coast does not accept pulpwood and wood chips under
this Amendment Agreement from St. Joe, as set forth in
Paragraph 1 of this Amendment Agreement, for any reason,
including Act of God or force majeure, the weekly amount of
wood fiber not accepted will be released and deducted from the
volume for that contract year which St. Joe would otherwise be
obligated to make available to Florida Coast.
5. SURVIVAL OF FIBER AGREEMENT.
5.1. All provisions of this Amendment Agreement take precedence
over, control, and overrule any provisions of the Fiber
Agreement with which they are in conflict.
5.2. Any provisions of the Fiber Agreement not in conflict with
this Amendment Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereunto have caused this Agreement to
be executed by their duly authorized officer on this 25th day of August, 1997.
Signed, sealed and ST. JOE TIMBERLAND COMPANY
delivered in the presence of:
/s/
- ---------------------------- By: /s/
Witness as to St. Joe --------------------------------
/s/
- ---------------------------- Title: Vice President
Witness as to St. Joe -----------------------------
FLORIDA COAST PAPER COMPANY
/s/
- ---------------------------- By: /s/
Witness as to Florida Coast --------------------------------
- ---------------------------- Title: Chairman
Witness as to Florida Coast -----------------------------