#8 ONP SUPPLY AGREEMENT/RECOVERED SORTED NEWSPAPER
~~ SOUTHEAST PAPIR .
RECYCLING COMPANY
The Newspaper Recycling Company.
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June 25, 1997
Mr. Bob Brumback
Director of Solid Waste
1701 North Hercules Avenue
Clearwater, Florida 34625
Dear Bob,
Enclosed is one original copy of the executed ONP Supply Agreement between Southeast
and the City of Clearwater. We look forward to working with you and your people and expect a
mutually beneficial relationship.. Do not hesitate to call if I can ever be of service.
Be~.ree~g ds, J
rdJui5'(
Ron Secrest
Marketing Manager
RS:pr
enc: Supply Agreement
1800 Parkway Place, Suite 1020, Marietta, Georgia 30067 (770) 919-7502 Fax: (770) 919-7043
100% recycled fiber. <i)
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# 8 ONP SUPPLY AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 1st day of July, 1997 between
SOUTHEAST PAPER RECYCLING COMPANY, a Georgia corporation with principal offices in Cobb County,
Georgia (hereinafter referred to as "Buyer"), and THE CITY OF CLEARWATER DEPARTMENT OF SOLID
WASTE, with principal offices located in Clearwater, Florida (hereinafter referred to as the "Supplier").
WITNESETH
WHEREAS, Supplier desires to sell to Buyer, and Buyer desires to purchase from Supplier, certain quantities
of old newspaper (#8 ONP) paper stock on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the parties
hereto, intending to be legally bound, agree as follows:
1. BUYER'S REOUIREMENT FOR #8 ONP.
1.1 For the purposes of this Agreement, "#8 ONP" shall mean recovered, sorted newspaper of the grade
quality known as "Special News De-Ink Quality", as defined by Southeast Paper Manufacturing Company. Current
Southeast Paper #8 ONP Specifications are attached as Exhibit A.
1.2 Buyer requires #8 ONP for the operation of its newsprint mill in Dublin, Georgia. Buyer is willing
to accept deliveries ofONP that do not comply with the quality requirements of#8 ONP, subject to
(i) Supplier agrees to a continuous quality improvement program, and (ii) Supplier accepts a price adjustment for
non-conforming tonnage as provided for in Section 3.1 (c) hereof, and (iii) Supplier agrees to a volume reduction
in contract quantities as provided in Section 2.3 hereof.
2. ONP OUANTITY AND SOURCE TERMS:
2.1 Buyer agrees to purchase from Supplier and Supplier agrees to sell to Buyer #8 ONP in quantities
of not less than 4,200 tons annually but Supplier agrees to supply Buyer all #8 ONP (approximately 4,200 tons/yr.
or 350 tons/mo. recovered from the City of Clearwater's recycling program and all other tonnage (currently
projected at 3,600 tons/yr. or 300 tons/mo.) processed by Supplier. Buyer agrees to accept up to 7,800 tons
annually. Supplier agrees to offer Buyer first right of acceptance for additional tonnage over 7,800 tons annually.
2.2 Should any shipment of ONP hereunder fail to conform to the specifications for #8 ONP, Buyer will
accept a non-conforming shipment and take such action as may be necessary to process such shipment into #8 ONP
provided, however, that Buyer may determine, on the basis of its evaluation of the quantity and frequency of
shipments of non-conforming ONP, to reduce its purchase obligations hereunder from the Supplier. Such reduction
in purchase obligation shall be effective 90 days after written notice is delivered to Supplier. Quantities of non-
conforming ONP delivered by supplier shall constitute delivery of contract quantities for purposes of Section 2.1.
2.3 In the event that the minimum tons (4,200 tons annually) are not met for any of the years in the
contract, Buyer has the right to renegotiate the terms of the contract for the remaining years (i.e. quantity, price,
etc.).
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3. ONP PURCHASE PRICE.
3.1 The purchase price for #8 ONP in accordance with this Agreement shall be determined as follows:
(a) Buyer agrees to provide Supplier a purchase order "floor price" of $35/ton for the term of this
Agreement, beginning July 1, 1997, subject to the Supplier meeting and maintaining the annual
#8 ONP tonnage flow volume as provided in Section 2.1.
(b) The price each month for #8 ONP will be equal to the Buyer's market price for sorted #8 ONP
in the applicable market area, as announced by Buyer for that month. Additionally, to the extent
that the Buyer's market price for #8 ONP ranges from $130.00 to $200.00, Buyer shall be
entitled to the following discounts:
Buyer's Market % Discounted
Price/Ton Discounted Price
$130/$135 2.5% $126.75/$131.62
$140/$145 5.0% $133.00/$137.75
$150/$155 7.5% $138.75/$143.37
$160/$165 10.0% $144.00/$148.50
$170/$175 12.5% $148.75/$153.12
$180/$185 15.0% $153.00/$157.25
$190/$195 17.5% $156.75/$160.87
$200 20.0% $160.00
If Buyer's market price for #8 ONP exceeds $200.00, the discounted price to be paid by Buyer
shall be equal to market price discounted by 20.0%.
(c) Nonconforming shipments over 3% contamination are subject to a reprocessing fee of$10 per
percent of contaminations in excess of3.0%. Nonconforming shipments which exceed 5% will
be disposed of in a mutually agreed upon manner.
3.2 Buyer shall calculate the sums due Supplier based on the total net weight of #8 ONP received
and accepted each month, shall make such adjustments as are provided herein, and shall remit payment to Supplier
within 30 days of receipt of delivery.
4. ONP DELIVERY.
4.1 Each month during the term of this Agreement, Supplier shall load at its expense the "Monthly Order"
specified by Buyer in its Purchase Orders for the period. The quantity of #8 ONP covered by such Purchase Orders
shall total an amount equal to the purchase obligation under Section 2.1. Truckloads shall be weighed at the time
of delivery at Buyer's facility in accordance with standard industry practices. Such weight shall be adjusted for
moisture content in excess of 1 0%. Weights shall likewise be adjusted, as appropriate, for non-conforming #8 ONP
shipped by Supplier as referred to in Section 2.2. Certified weight tickets issued at the time of delivery shall be
conclusive. Shipments shall be made F.O.B. Supplier's shipping location, unless otherwise arranged.
4.2 Buyer agrees to provide Supplier with two (2) trailers for the purpose of delivering the #8 ONP
pursuant to the Purchase Orders.
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4.3 Supplier shall deliver #8 ONP to Buyer in baled form as specified on the Purchase Orders. Buyer will
accept loose loads with prior notifiction.
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4.4 Upon Buxer's request, Supplier agrees to load #8 ONP from Buyer's quantities in 2.1 into shipping
containers, trailers flr Jii~a:s for shipment to a destination other than its Dublin mill. It is understood that the Buyer
intends to make such requests only during times of special circumstances.
5. AGREEMENT TERM.
The term of this Agreement shall be approximately five (5) years, commencing on July 1, 1997 and
continuing until June 30, 2002. Written notice of a 5 year renewal must be supplied by both parties six (6) months
prior to the end of the term of this agreement. If the agreement is not renewed for a full five year term, the
Agreement will be extended six months automatically. Beginning July, 2002, monthly orders would be reduced
by approximately 100 tons from the previous month's level for each of the six month period.
6. ARBITRATION.
6.1 The parties intend that any dispute arising from or in connection with this Agreement shall be settled n
amicably through good faith negotiations between the parties. Aft attempt t5 ftffi'/e at stIeh a settlemeftt shall Be ~
d~lnR~d t9 Ra'.'~ fail~d as S99R aE 9R@ (lftR@ pmi~g gives '-"fitteR R9tiQ@ t9 th@ 9th@r PaTt3', WRiQR R9tiQe sRallstate t!>
that the pftf'ties' ftttelflpt tEl arri':e at 9ft atRieaele settlefH0Bt Elf the c:iisp1Ke has failes.
6.2 If aft attem.pt at s0ttlefH0Rt ef a disf'yte aRser ~@etioR 9.1 abGv@ Ras failed, th~ p:irti@g dlall ~:m~~ ..
siftgle arllikatflr ta Be ttflf'oiRteEl iR aeeElrsaRee with the RIles ef the :\m.erieaR .'\reitFatieR .^.ssEleiatiElR. Either fl~'
may iRitia1;@ tR@ }:@'ll,!@st ror arbitratioR aRd shall furRisR Retise to tRe ether flart;'. The ar~i1iFatieR shall 8e eeRsaete8
iR Georgia, iR aeeerdanee '.vitR tR@ nd@s ehhe .^,.m@rieaR l\rbitratioR Ass9~iati9R, aRa th~ ~ggt gf mdl arbitrati9R
shall be Baffle 50% by eaeh flarty. .'\R)' aeeisioR reaekea B)' sliek arbitrator skallbe fiRal aRs hiRaiRg lifleR the
p:irti@g.
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7. MISCELLANEOUS.
7.1 This Agreement, including the Exhibits hereto which are part of the Agreement, constitutes the entire
Agreement between the parties regarding the subject matter hereof, and supersedes all other prior agreements or
understandings between them concerning the subject matter. In case of any conflict between this Agreement and
any purchase orders, invoices and acknowledgments, this Agreement shall control.
7.2 This Agreement may be amended or modified only in writing signed by both parties.
7.3 Notice shall mean notice in writing and given to the party to receive such notice (i) by hand delivery,
(ii) by first class, registered or certified mail, postage prepaid, return receipt requested, or (iii) by first class,
registered or certified mail, postage prepaid, return receipt requested, or (iii) by telecopy, at the address set forth
below:
To Supplier:
City of Clearwater
Department of Solid Waste
1701 N. Hercules Avenue
Clearwater, Florida 34625
Attn: Mr. Robert Brumback, Director
Ph. No. (813) 462-6657
Fax No. (813) 462-6656
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To Buyer:
Southeast Paper Recycling Company
1800 Parkway Place, Suite 1020
Marietta, Georgia 30067
Attn: Mr. E. James Fletcher, Executive Vice President
Ph. No. (770) 919-7502
Fax No. (770)919-7043
All notices shall be deemed to have been given three (3) days after the date of mailing thereof or on receipt,
whichever is earlier. Either party may change the address specified herein for the receipt of its notices by giving
written notice to the other party in accordance with this Section.
7.4 Either party's failure to perform its obligations hereunder (including Buyer's obligation to accept
delivery of # 8 GNP during the relevant time period) shall be excused to the extent and for the period of time such
non-performance is caused by war, invasion, fire, explosion, flood, riot, strikes, acts of God, delays or defaults of
carriers, energy shortages, or other causes beyond such party's reasonable control. The excuse of performance
provided herein shall not be available to a party which fails to employ diligence in removing or curing such event
of force majeure. The party affected by force majeure shall give the other party prompt written notice of any
inability to perform hereunder. In the event that the Supplier is impacted by the Buyer exercising their right to force
majeure, the Buyer will use reasonable efforts to aid in marketing the tons impacted.
7.5 In connection with the performance of their duties hereunder, the parties agree to comply strictly
with all applicable federal, state and local statutes, laws, ordinances, rules and regulations of any nature whatsoever.
7.6 This Agreement has been made, executed and delivered at the offices of Buyer in Cobb ~oun~ f1~
Georgia and shall in all respects be governed by and interpreted in accordance with the laws of the State of Ce'6~glfl ~
without giving effect to the principles of conflicts of laws thereof, and Supplier consents and submits to the
jurisdictions of all courts located in the State of 'Gtl~l~. ~
7.7 No waiver of any default hereunder by either party or failure to exercise any right hereunder shall
be deemed a waiver of any subsequent default or of such right.
7.8 This Agreement shall not be assignable by either party or by operation oflaw without the written
consent of the other party. Notwithstanding the foregoing, either party may assign this Agreement to a parent entity
or to a wholly-owned affiliate of a parent entity.
7.9 Captions contained in this Agreement are inserted only as a matter of convenience or for reference
and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof.
7.10 The duties and obligations imposed by this Agreement and the rights and remedies available
hereunder shall be in addition to, and not a limitation of, any duties, obligations, rights and remedies otherwise
imposed upon by or available under law.
7.11 The invalidity or unenforceability of all or any part of any such provision herein shall not affect
the validity or enforceability of any other provision or the remainder of any such provision.
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IN WITNESS WHEREOF, the parties have executed this Agreement as ofthe date first written above.
By:
SOUTHEAST PAPER RECYCLING COMPANY
By: €\,~~f r.
E.J~tcher ~
Executive Vice President
y,\SHARE',PEOOY\CLEARW A T.AGR
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EXHIBIT' A'
Southeast Paper's No.8 Deink News:
· Contains sorted, fresh, dry, sunburn free newspapers
· Contains no more than the normal percentage of inserts, with samples removed
· May contain overissue news (polyethylene bags must be removed)
· May contain pressroom scrap without heavy ink sheets or overissue inserts
· Maximum age: 3 months
· Moisture content: 10% (air dry)
· Total Contamination: % of 1 %
Prohibitives: none
Outthrows: % of 1 %
Prohibitives are any materials and contaminants other than paper. The
following list provides a limited number of prohibitive examples.
Plastic bags or Synthetic paper (Federal Pressure sensitive tapes,
flexible film plastic Express envelopes) labels, etc.
Adhesive tapes Bound books Metals
Plastic containers Glued magazines Dirt
Carbon papers Wax papers Garbage
Plastic window envelopes Pressroom trash Floor sweepings
Ropes, strings, twines,
strapping
Glass
Wood
Cloth
Beverage cartons
Outthrows are papers other than old newspaper. The following list provides a
limited number of outthrow examples.
Aged newspapers Commercially printed publications Corrugated boxes
Shredded papers Overissue inserts Kraft bags
Sunburned newspapers Stapled magazines Junk Mail
Heavy inked sheets Catalogs Office papers
Colored (dyed) papers Telephone books Computer papers
Folding cartons Treated papers Coated papers
· Hogged or shredded GNP is an unacceptable pack.
· Bales should be dense and solid and be uniform in size within a load.
· Trailer or rail car should be swept clean before loading.
Inspected loads in excess of allowed tolerances subject to downgrade
or rejection.
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