Document:

Exhibit 10.22

 

Contract No.: P-101

 

AGREEMENT FOR THE PURCHASE AND SALE OF PULP

 

AGREEMENT made as of the first day of January, 2003 by and between
WEYERHAEUSER COMPANY, a Washington Corporation (“Seller”), and Blue Ridge Paper
Products Inc., a Delaware Corporation, (“Buyer”).

 

	
  QUANTITY AND DESCRIPTION

  	
  Seller agrees to sell and Buyer agrees to purchase, in each year
  during the term of this Agreement, the following quantities (measured in Air
  Dry Metric Tons of 2204.6 pounds per ton) and types of pulp manufactured by
  Seller.

  

 

	
  Quantity (per Contract Year)

  	
   

  	
  Origin and
  Grade of Pulp

  	
   

  	
  Buyer’s
  Destination

  	
   

  
	
  4537

  	
   

  	
  Port Wentworth or Columbus SBSK

  	
   

  	
  Canton, NC

  	
   

  
	
  6352

  	
   

  	
  Port Wentworth or Hawesville SBHK

  	
   

  	
  Canton, NC

  	
   

  

 

	
   

  	
  Buyer shall be deemed to have fulfilled it obligations to purchase
  the annual quantities provided for herein if it has ordered not less than 95%
  of such quantities; shipment by Seller of annual quantities within 5% of the
  annual quantity provided for herein shall constitute fulfillment of its
  volume obligation.

  
	
   

  	
   

  
	
  DURATION

  	
  This Agreement shall become effective on January 1, 2003, and
  shall terminate on the scheduled termination date of December 31,
  2004.  Not later than six months
  before the scheduled termination date, Buyer and Seller agree to begin discussions
  for a renewal of this Agreement, but unless Buyer and Seller have agreed in
  writing not later than three months before the scheduled termination date on
  a renewal hereof, this Agreement shall terminate on the scheduled termination
  date.

  
	
   

  	
   

  
	
  ORDERS AND SHIPMENTS

  	
  Approximately 1/4  of
  the annual contract quantity shall be shipped in each quarter of the contract
  period, with the specifies of each individual shipment during each quarter to
  be mutually agreed upon prior to the beginning of such quarter.  Seller will issue a written acknowledgment
  for each such quarter on a timely basis.

  
	
   

  	
   

  
	
  QUANTITY AND GRADE ADJUSTMENTS

  	
  Unless specific numbers of carload lots are specified in any order
  under this Agreement, the quantity described in any such order may be
  increased or decreased by not more than 5%. 
  In the event that either Seller or Buyer shall propose a change in the
  quantity or grade of pulp covered by this Agreement, Seller and Buyer agree
  to negotiate in good faith in response to such proposal, but neither party is
  obligated to agree to the other party’s proposal.

  
	
   

  	
   

  
	
  PRICE AND TERMS OF PAYMENT

  	
  It is the intent of both parties that the price represent the fair
  market value of the respective pulp. 
  The price and sales terms shall be Seller’s price per ton of pulp
  announced to Buyer for the destination in effect at the time of shipment, and
  terms of payment shall be the Seller’s terms announced to Buyer in effect at
  the time of shipment.  If at any time
  the buyer is dissatisfied with Seller’s announced price.  Buyer shall notify the Seller.  Buyer shall have the option of using a
  mutually agreeable third party index, (such as RISI) to establish monthly
  prices for the following three-month period.

  
Exhibit B contains the provisions of
  a Performance Rebate for this Agreement.

  

 

 

	
  OTHER TERMS

  	
  This Agreement is also subject to the General Terms of Sale, attached
  hereto as Exhibit A.

  
Neither party may assign this
  Agreement without the express prior written consent of the other; provided,
  however, Seller may assign this Agreement to a subsidiary or affiliate of
  Seller.  Seller may terminate this
  Agreement on not less than sixty (60) days written notice in the event of a
  change of control of Buyer.

  

 

 

	
  BLUE RIDGE PAPER PRODUCTS INC.

  	
  WEYERHAEUSER COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Brian Rhodes

  	
   

  	
  By:

  	
  /s/ Donald L. Young

  	
   

  
	
   

  	
  Canton Mill Purchasing MGR.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  VP Operations

  	
   

  	
  Title:

  	
  General Sales Manager Paper grade Purchasing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  1/7/03

  	
   

  	
  Date:

  	
  January 24, 2003

  	
   

  
							

 

 

EXHIBIT A

 

GENERAL TERMS OF SALE

 

1.                                       MOISTURE,
WEIGHT, AND DEFINITIONS

This contract is made and the pulp covered thereby is to be invoiced on
the basis of air-dry fiber containing by weight 90% bone-dry fiber and 10%
moisture.  “Short ton” means 2,000
pounds, “metric ton” means 2,204.6 pounds of wood pulp on an air-dry
basis.  Unless otherwise specified, all
references to tonnage shall mean metric tons, dimensions shall mean the
International Metric System (SI), and monetary amounts shall be in U.S.
dollars.

 

2.                                       TAXES

Any and all taxes or charges of any nature (other than taxes imposed on
the gross or net income of Seller), imposed by any governmental authority,
which shall become payable by reason of the sale, delivery and/or use of Pulp
hereunder shall be deemed for Buyer’s account and Seller may either bill the
same to Buyer, separately, or add the same to the price of Pulp shipped
hereunder.  Seller will notify Buyer in
writing of the nature of any such tax or charge and of the law imposing same.

 

3.                                       DELAYS

Seller may suspend performance of this agreement when its manufacture
or delivery of products is prevented, and Buyer may suspend performance of this
contract when its receipt or consumption of products is prevented, in either
case to the extent caused by act of Good labor difficulty, shortage of
transportation facilities, governmental acts or orders, the public enemy, or
any like or different circumstances beyond reasonable control of such party,
provided that goods specially manufactured or in transit must be accepted by
the Buyer.  If suspension by either
party continues for sixty days or more, the other party may elect to cancel
this agreement.

 

4.                                       TERMS
OF PAYMENT

Net cash 30 days from date of invoice, subject to continued compliance
with Seller’s normal credit standards. 
A late payment charge of 1.00% per month on the unpaid balance will be
made on all past due accounts.  Should
this rate exceed the maximum rate that is lawful under the circumstances, that
maximum rate shall apply.  The maximum
rate shall be governed by the law of the state of the Buyer’s designated
billing office.  Buyer also agrees to
pay reasonable attorney’s fees and other costs incurred at collection.

 

5.                                       WARRANTY
AND LIMITATIONS

Seller warrants that its products are of good, merchantable quality, in
accordance with specifications and tolerances published by it or adopted by
reference in this order.  If Buyer gives
written notice to Seller of any failure to meet the foregoing standards within
30 days after delivery of the products, and if such failure of any
article is established under procedures customary in the industry or
otherwise established to Seller’s satisfaction, then at Seller’s option Seller
will furnish a replacement product conforming to this warranty, make a fair
allowance therefor, or refund the purchase price.  THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE FOREGOING AND
SELLER’S SOLE RESPONSIBILITY THEREUNDER IS AS STATED.  SELLER SHALL NOT BE LIABLE FOR CONSEQUENTIAL, INDIRECT OR
INCIDENTAL DAMAGES, OR FOR ANY AMOUNT IN EXCESS OF THE PRICE FOR THE SHIPMENT
INVOLVED, UNDER THE FOREGOING WARRANTY OR ANY OTHER PART OF THIS AGREEMENT, ANY
LEGAL ACTION AGAINST SELLER FOR BREACH OF THIS AGREEMENT, INCLUDING ANY
WARRANTIES HEREUNDER, MUST BE INSTITUTED WITHIN ONE YEAR AFTER DELIVERY.

 

6.                                       TRANSPORTATION
COSTS AND SHORTAGES

When prices include any costs of transportation from point of
manufacturer, any increase in such costs greater than $5.00 ADMt becoming
effective after the applicable price is quoted or established by Seller, and
any costs greater than $50.00 ADMt for service beyond those provided by the
carrier at no charge other than the applicable freight rate for tariff, may, at
Seller’s option, be for Buyer’s account. 
And extra costs of utilizing substitute methods of delivery, including
when the intended type of carrier, vehicle or loading or unloading facilities
become unavailable, may also at Seller’s option, be for Buyer’s account.

 

7.                                       CLAIMS

All claims of whatever nature applying upon any shipment made under
this Agreement must be made within) sixty (60) days after arrival a Buyer’s
plant; and buyer shall hold not less than one half the shipment in dispute,
pending examination by Seller or its nominee for this purpose.  Seller shall examine the goods with 10 days
of notification by Buyer, and shall immediately advise disposition of the
goods.

 

8.                                       SHIPMENT
AND TITLE PASSAGE

Unless Seller expressly guarantees an indicated or scheduled shipping
date, all advance information as to date of shipment is an approximation only
based on Seller’s best judgment at the time. 
Irrespective of any provision concerning freight or price, title and
risk of loss or damage shall pass to buyer upon delivery of goods to any
carrier, except a motor vehicle operated by Seller, at Seller’s plant or other
shipping point.  Seller reserves the
right to route all shipments, and may assist Buyer in processing claims against
carriers without incurring liability therefor.

 

When a mill or other point is specified in this agreement, or when an
order is scheduled for shipment from such a place, it shall be the exclusive
source of supply.

 

9.                                       WAIVER

No right of either party hereunder shall be deemed to have been waived
by any failure of such party to exercise any right in any price instance or
instances.

 

10.                                 GOVERNING
LAW

The law of the State of Washington, including the Uniform Commercial
Code as in force therein, shall govern all aspects of this agreement including
its validity, interpretation, performance, operation and enforcement.

 

 

EXHIBIT B

 

PERFORMANCE REBATE

 

1.                                       A
discount of six percent shall be taken off of the invoice for all SBSK
shipments

 

2.                                       A
discount of eight percent shall be taken off of the invoice for all SBHK
shipments

 

3                                          A
performance rebate of 2 percent of the net invoice amount (gross amount
invoiced less freight, of returns and allowance  if insurance, and customer duties and charges for a quarter), if
will be paid by credit memo after the end of the quarter to which the
additional rebate applies, if all of the following conditions are met

 

•                  Buyer shall have
paid in full all invoices for the quarter

•                  The average
number of days from invoice date to the date of payment is received is equal to
or less than 37 days

 

4                                                                  An
additional performance rebate of 2 percent of the net invoice amount (gross
amount invoiced less freight, prompt payment discounts, returns and allowances,
insurance, and customer duties and charges for a quarter, will be paid by
credit memo after the end of the quarter to which the performance rebate
applies, if all of the following conditions are met

 

•                  Buyer shall have
paid in full all invoices for the quarter

•                  Buyer shall have
purchased the full quarterly amount during the quarter<PAGE>

                                                                     Exhibit 4.4

FIRST AMENDING AGREEMENT to the Credit Agreement dated as of February 7, 2003,
entered into Toronto, Ontario, on this 2nd day of December, 2003.

AMONG:                  SUN MEDIA CORPORATION,  a corporation  continued and
                        existing under the laws of British Columbia, Canada,
                        having its chief executive office at 333 King Street
                        East, in the City of Toronto, Province of Ontario
                        (hereinafter called the "Borrower")

                        PARTY OF THE FIRST PART

AND:                    THE FINANCIAL  INSTITUTIONS NAMED ON THE SIGNATURE PAGES
                        HEREOF OR FROM TIME TO TIME PARTIES TO THE AGREEMENT
                        (the "LENDERS")

                        PARTY OF THE SECOND PART

AND:                    BANK OF AMERICA,  N. A., AS  ADMINISTRATIVE  AGENT FOR
                        THE LENDERS, a duly constituted bank, having a place of
                        business at 555 South Flower, 17th floor, in the City of
                        Los Angeles, California, 90071, and at 200 Front Street
                        West, Suite 2700, Toronto, Ontario, M5V3L2 (hereinafter
                        called the "ADMINISTRATIVE AGENT")

                        PARTY OF THE THIRD PART

         WHEREAS the parties hereto are parties to a Credit Agreement dated as
of February 7, 2003 (the "CREDIT AGREEMENT");

         WHEREAS the Borrower has requested certain amendments to the Credit
Agreement in order to (i) amend the Applicable Margin for Term Facility B, (ii)
amend the definition of Consolidated EBITDA to exclude any positive or negative
impact of Back-to-Back Securities to the extent included in earnings, and (ii)
amend the definition of Permitted Investments to include investments made from
the proceeds of assets disposed of in accordance with the provisions of the
Credit Agreement; and

         WHEREAS the Lenders have agreed with the Borrower to the amendments
contemplated hereby, and as such, the Lenders have complied with the provisions
of Section 12.01 of the Credit Agreement, as evidenced by the signature of each
Lender on this Agreement;

NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

<PAGE>

I.                INTERPRETATION

1. This First Amending Agreement is declared to be supplemental to the Credit
Agreement and is to form part thereof and shall have the same effect as though
incorporated therein. The words and expressions starting by and upper case
letter used herein, unless otherwise defined herein or unless there is something
I the subject or the context inconsistent therewith, have the same meaning as
that ascribed to them in the Credit Agreement and all of the provisions of the
Credit Agreement, except only insofar as they may be inconsistent with the
express provisions hereof, shall apply to and shall have effect in connection
with this First Amending Agreement.

2. Except as otherwise expressly amended hereby, the Credit Agreement remains
unamended and in full force and effect.

3. The preamble of this First Amending Agreement shall form an integral part
hereof as if at length recited herein.

4. The division of this First Amending Agreement into articles, sections,
subsections, paragraphs and subparagraphs and the insertion of titles are only
meant to be for reference and do not affect the meaning or the interpretation of
the present First Amending Agreement.

5. The First Amending Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such separate
counterparts shall together constitute but one and the same instrument.

6. The First Amending Agreement and the interpretation and enforcement thereof
shall be governed by and construed in accordance with the laws of the Province
of Ontario.

7. The First Amending Agreement shall become effective on December 2, 2003.

II.               AMENDMENTS

1.       Section 1.01 of the Credit Agreement is hereby amended as follows:

         1.01 by adding, to the text of the definition of "Applicable Margins",
         at the end thereof, the following text, viz. "Any change in the
         Applicable Margin for Term Facility B arising due to a change in the
         senior, secured credit rating of the Borrower as set forth in Schedule
         4 shall become effective as follows: (i) for an improved rating, on the
         date the Borrower has given to the Administrative Agent notice thereof,
         which notice shall include a copy of any document issued by Moody's in
         relation thereto, and (ii) for any subsequent deterioration of such
         rating, including the issuance by Moody's of any negative outlook in
         relation thereto, on the earlier of the date the Administrative Agent
         becomes aware thereof or the date the Borrower provides a notice of
         such deterioration to the Administrative Agent, which notice shall be
         given by the Borrower within ten (10) days of its knowledge thereof.".
         Consequently, the definition of "Applicable Margins" now reads as
         follows:

                                       2
<PAGE>

                  ""APPLICABLE MARGINS" means, at any time, subject to the next
                  following sentence, the margins set forth and defined in
                  Schedule 4 corresponding, with respect to Facility A, to the
                  Leverage Ratio at such time. In respect of (i) Canadian Prime
                  Rate Advances, the Applicable Margin shall be the margin
                  referred to in the column "C$ PRIME RATE ADVANCES"; (ii)
                  Drawings and Letters of Credit, the Applicable Margin shall be
                  the margin referred to in the column "BA DRAWING FEE AND
                  LETTER OF CREDIT FEE", subject, with respect to Letters of
                  Credit, to the fee payable to the Issuing Lender as
                  contemplated by Section 5.01, (iii) Libor Advances, the
                  Applicable Margin shall be the margin referred to in the
                  column "LIBOR", and (iv) US Prime Rate Advances, the
                  Applicable Margin shall be the margin referred to in the
                  column "US$ Prime Rate Advances". On the Closing Date, each
                  Applicable Margin in respect of Facility A shall be deemed to
                  be that set out in Tier II of the relevant table in Schedule
                  4, and thereafter, shall be adjusted on the date the
                  Administrative Agent receives the relevant Compliance
                  Certificate calculating the Leverage Ratio. If at any time any
                  Compliance Certificate is not delivered on the applicable due
                  date, without prejudice o the rights of the Lenders in respect
                  of such Default, the Applicable Margin shall be that set out
                  in Tier I of the relevant table in Schedule 4 form the date
                  such Compliance Certificate was due until the date on which it
                  is delivered.

                  If at the time of change in the BA Drawing Fee, there exist
                  any outstanding Drawings of the Borrower under Facility A, the
                  Borrower shall pay to the Administrative Agent, for the
                  rateable benefit of the Facility A Lenders (in the case of an
                  increase in the BA Drawing Fee) or receive repayment or credit
                  from the Lenders (in the case of a decrease in the BA Drawing
                  Fee) for, an amount in respect of each such Drawing equal to
                  the product obtained by multiplying (i) the product obtained
                  by multiplying (w) the difference between the BA Drawing Fee
                  in effect prior to such change and the BA Drawing Fee in
                  effect immediately after such change, by (x) the aggregate
                  face amount of such Drawing, by (ii) the quotient obtained by
                  dividing (y) the number of days to maturity remaining in
                  respect of such Drawing, by (z) 365 days. Any payment as a
                  result of a change in the Applicable Margin shall be made, in
                  respect of Drawings, on the next maturity date thereof in
                  accordance with Article 4.

                  Any change in the Applicable Margin for Term Facility B
                  arising due to a change in the senior, secured credit rating
                  of the Borrower as set forth in Schedule 4 shall become
                  effective as follows: (i) for an improved rating, on the date
                  the Borrower has given to the Administrative Agent notice
                  thereof, which notice shall include a copy of any document
                  issued by Moody's in relation thereto, and (ii) for any
                  subsequent deterioration of such rating, including the
                  issuance by Moody's of any negative outlook in relation
                  thereto, on the earlier of the date the Administrative Agent
                  becomes aware thereof or the date the Borrower provides a
                  notice of such deterioration to the Administrative Agent,
                  which notice shall be given by the Borrower within ten (10)
                  days of its knowledge thereof.";

                                       3
<PAGE>

         1.2 by deleting from the text to the definition of "Consolidated
         EBITDA" the following words, viz. "less any income received in
         connection with Back-to-Back Securities, and" and by adding thereto,
         after the word "GAAP", the following text, viz. "; for greater
         certainty, there shall be excluded from the calculation of Consolidated
         EBITDA, to the extent included in such calculation, the amount of any
         income or expense relating to Back-to-Back Securities". Consequently,
         the definition of "Consolidated EBITDA" now reads as follows:

                  ""CONSOLIDATED EBITDA" means, for any Person, for any period
                  and without duplication, earnings of such Person on a
                  consolidated basis before non-controlling interests,
                  extraordinary items, Consolidated Interest Charges, foreign
                  exchange translation gains or losses not involving the payment
                  of cash, amortization of deferred financing costs and other
                  non-cash financial charges, taxes, depreciation and
                  amortization, without taking into account any goodwill
                  adjustments, calculated on a consolidated basis, and otherwise
                  calculated in accordance with GAAP; for greater certainty,
                  there shall be excluded from the calculation of Consolidated
                  EBITDA, to the extent included in such calculation, the amount
                  of any income or expense relating to Back-to-Back
                  Securities.";

         1.3 by adding, at the end of the text of the definition of "Credit
         Documents" the following text, viz. ",the whole as amended, amended and
         restated or replaced from time to time". Consequently, the definition
         of "Credit Documents" now read as follows:

                  ""CREDIT DOCUMENTS" means this Agreement, the BA Instruments,
                  the Letters of Credit, the Security Documents, the Hedging
                  Agreements, the subordination agreements in respect of
                  Back-to-Back Securities and all other documents (including
                  guarantees) to be executed and delivered to the Administrative
                  Agent, the Issuing Lender or the Lenders or their Affiliates,
                  or all of them, by the Borrower or the Guarantors in
                  connection with the Credit Facilities, as well as all
                  documents to be executed and delivered in connection with the
                  Overdraft Facility, the whole as amended, amended and restated
                  or replaced from time to time.";

         1.4 by adding, to the text of the definition of "Permitted Investment",
         after the words "in an Aggregate amount of up to $50,000,000" the words
         "plus the Net Proceeds of any Disposal of Assets permitted hereunder".
         Consequently, the definition of "permitted Investment" now reads as
         follows:

                  "PERMITTED INVESTMENT" means (A) any Investment in
                  Back-to-Back Securities or Existing Back-to-Back Securities or
                  in connection with Tax Benefit Transactions and (B)(i) any
                  Investment made out of the portion of Excess Cash Flow
                  available to the Borrower to make a Permitted Distribution
                  that is not used to make a Permitted Distribution; and (ii)
                  any other Investments (including any Acquisitions) in an
                  aggregate amount of up to $50,000,000 plus the Net Proceeds of
                  any Disposal of Assets permitted hereunder during the entire
                  Term of the later to expire of Facility A or Term Facility B
                  (a "PERMITTED ACQUISITION") provided that

                                       4
<PAGE>

                  after giving effect to such Investment or Acquisition and any
                  Accommodation made under the Credit Facilities to fund all or
                  any part of the purchase price of such Acquisition, no Default
                  shall have occurred and be continuing, and no Event of Default
                  shall have occurred and not been waived, and, for greater
                  certainty, the Borrower will be in compliance with the
                  financial covenants set forth in Section 8.03.";

2. Schedule 4 of the Credit Agreement is hereby amended by changing the margin
applicable to Libor Advances under Term Facility B from 2.50% to 2.25% and the
margin applicable to U.S. Prime Rate Advances under Term Facility B from 1.50%
to 1.25%, it being understood and agreed by the parties hereto that during any
period in which the Borrower has obtained and maintained a senior, secured
credit rating from Moody's of at least Ba1 (with a stable outlook), such margins
shall be further reduced to 2.00% with respect to Libor Advances and 1.00% in
respect of U.S. Prime Rate Advances under Term Facility B.

III.              MISCELLANEOUS

1. The Borrower hereby represents and warrants to each Lender that no Default
has occurred which is continuing, no Event of Default has occurred which has not
been waived an that it will be in compliance with the financial covenants set
forth in section 8.03 of the Credit Agreement.

2. All of the provisions of the Credit Agreement which are not amended hereby
remain in full force and effect.

3. The Borrower shall pay upon demand all reasonable professional fees and
disbursements incurred from time to time by the Administrative Agent in
connection with the negotiation, preparation and delivery of this First Amending
Agreement and all other documents accessory hereto as well as any amendments to
be made to any of the foregoing at any time and from time to time.

4. The present First Amending Agreement replaces and supersedes all other verbal
or written agreements among the Administrative Agent, the Lenders or anyone
thereof and the Borrower relating to the amendments to the Credit Agreement
contemplated herein or any other issues accessory to the transactions
contemplated by this First Amending Agreement.

5. The parties acknowledge that they have required that they present agreement,
as well as all documents, notices and legal proceedings entered into, given or
instituted pursuant hereto or relating directly or indirectly hereto be drawn up
in English. Les parties reconnaissent avoir exige la redaction en anglais de la
presente convention ainsi que de tous documents executes,

                                       5
<PAGE>

avis donnes et procedures judiciaires intentees, directement ou indirectement,
relativement ou a la suite de la presente convention.

IN WITNESS WHEREOF THE PARTIES HERETO HAVE SIGNED THIS AGREEMENT ON THE DATE AND
AT THE PLACE FIRST HEREINABOVE MENTIONED.

SUN MEDIA CORPORATION                       BANK OF AMERICA, N.A., as
Administrative Agent

Per:   [SIGNATURE ILLEGIBLE]                Per:   [SIGNATURE ILLEGIBLE]
       ------------------------------              -----------------------------
         Authorized Signing Officer                Authorized Signing Officer

Per:   [SIGNATURE ILLEGIBLE]
       ------------------------------
         Authorized Signing Officer

                                       6

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