Exhibit
10.1
AMENDED
AND RESTATED CRUDE TALL OIL AND BLACK LIQUOR SOAP SKIMMINGS AGREEMENT
THIS
AMENDED AND RESTATED CRUDE TALL OIL AND BLACK LIQUOR SOAP SKIMMINGS AGREEMENT (this “Agreement”) is made and entered
into on March 20, 2023, (“Effective Date”), by and between WestRock Shared Services, LLC and WestRock MWV, LLC, on
behalf of the affiliates of WestRock Company (“Seller”), and Ingevity Corporation, a Delaware corporation (“Buyer”).
Buyer and Seller may each be referred to as a “Party” and collectively as the “Parties.”
WHEREAS,
Seller produces black liquor soap skimmings (“BLSS”) and crude tall oil (“CTO”, together with BLSS,
each as further described on Exhibit A, the “Products”) at certain of its mills; and
WHEREAS,
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, Seller’s entire production of the Products at such
mills;
WHEREAS,
Seller and Buyer previously entered into that certain Crude Tall Oil and Black Liquor Soap Skimmings Agreement, dated as of January 1,
2016, as amended by the Amendment No.1 to Crude Tall Oil And Black Liquor Soap Skimmings Agreement dated March 1, 2017 and Amendment
No.2 to Crude Tall Oil And Black Liquor Soap Skimmings Agreement dated November 3, 2020, and effective as of May 1, 2020 (the “Existing
Agreement”) and desire to amend and restate the Existing Agreement in its entirety.
NOW,
THEREFORE, in consideration of the covenants and agreements herein contained, and other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, and subject to terms, provisions and conditions set forth herein, the Parties hereto
agree as follows:
Seller
agrees to sell to Buyer, and Buyer agrees to purchase and receive from Seller, except as otherwise set forth herein, one hundred percent
(100%) of the output of BLSS and CTO produced and originating at Seller’s Mills (as defined in Section 1(B)), upon the terms and
conditions set forth herein:
| A. | Quantity:
(i) Notwithstanding anything in this Agreement to the contrary, in no event shall any provision
in this Agreement require Seller to produce any minimum quantities of CTO or BLSS at any
of the Mills (whether individually or aggregate) and the Parties agree that the volume of
output of the Products will be subject to change in Seller’s sole discretion, including
but not limited to, any reduction in volume that may arise as a result of any closure of
or modification of any such Mill(s) or their operating processes or the volumes and types
of pulp and paper products produced therein. For the purpose of this Agreement one CTO equivalent
ton is defined as one short ton (2,000 pounds) of CTO or two short tons (4,000 pounds) of
BLSS (each, a “CTO Equivalent Ton” and collectively, the “CTO
Equivalent Tons”). |
(ii)
Buyer shall use commercially reasonable efforts to assist Seller to identify areas to maintain and/or improve the recovery and quality
of the Products produced at the Mills in order to assist Seller in its efforts to produce the Products. Buyer’s duties relative
to technical service efforts with respect to Product recovery and quality shall include, but not be limited to: (a) regular visits to
Mill sites to perform analysis of current state of quality and recovery, (b) sample collection and subsequent testing of physical properties
of the Products, (c) the preparation of quality reports to be distributed to each Mill at a minimum of once per calendar quarter, and
(d) other activities that the Parties may mutually deem to be reasonably necessary to support the ongoing production and quality of the
Products.
| B. | Mill
locations: Seller’s and its affiliates’ mills whose Products are included
in this Agreement are located at Fernandina Beach, FL; Hodge, LA; West Point, VA; Florence,
SC; Hopewell, VA; Demopolis, AL; Evadale TX, and any New Mills whose Products are added by
Seller pursuant to Section 6A below (each, a “Mill” and collectively,
the “Mills”). In the event Seller sells or otherwise transfers any Mill
or ceases production of Products at any Mill, or removes any Mill from this Agreement as
set forth herein, the remaining above-named Mills and any New Mills shall be deemed the Mills
for purposes of this Agreement. |
| C. | Quality:
CTO and BLSS sold hereunder is not guaranteed to meet any specifications; however, Buyer
and Seller will determine whether CTO and BLSS sold hereunder: (i) meets or exceeds the minimum
weighted-average quarterly (“WQA”) specifications for each Mill included
in Exhibit B and (ii) meets or is less than the maximum WQA specifications for each
Mill included in Exhibit B (collectively, the “Specifications”
and each a “Specification”). The WQA for each Specification for each Mill
will be monitored, sampled, and reported per Exhibit B at the end of each calendar
quarter. If CTO or BLSS quality falls below any Specification, Seller will determine, in
its sole discretion, which actions, if any, it will take to improve quality. It is understood
that Seller shall have no obligation to deliver CTO or BLSS that meets or exceeds either
the minimum or maximum Specifications set forth in Exhibit B. |
i. Quality
parameters are set on an individual Mill basis. References below to “Moisture Content,” “Acid Number,” “Hexane
Insolubles,” “Soap Number,” “Anthraquinone,” “Fiber in Soap,” and “Black Liquor,”
are references to such terms associated with various Specifications as further described in Exhibit B. In the event that the WQA
CTO or BLSS quality of any particular Mill (i) does not meet or exceed the minimum Specifications set forth on Exhibit B, or (ii)
exceeds any of the maximum Specifications set forth on Exhibit B, as applicable, for particular shipments or tonnage of Products
(“Below Standard Products”) then Seller will provide a credit memo to Buyer for use within thirty (30) days against
applicable invoices from Seller (or, if this Agreement has terminated, will reimburse Buyer), as follows:
a. Moisture
Content of CTO. Seller will provide a credit for excess moisture included with CTO sold to Buyer during such calendar quarter as
follows: The credit shall be based on the amount that the WQA is above the Specification maximum limit for each specific Mill. For example,
if a specific Mill sells 1,000 tons that had a CTO Moisture Content WQA of thirteen percent (13%) and a moisture Specification of two
percent (2%), then Seller will provide a Below Standard Product credit equal to (13% - 2%) * 1000 = 110 tons multiplied by the then-current
Purchase Price of CTO as described in Exhibits C and E hereto.
b. Acid
Number for CTO and BLSS. Seller will provide a credit for the tons of Below Standard Products sold to Buyer during such calendar
quarter based on the amount that the Mill specific WQA is below the applicable Acid Number minimum Specification on Exhibit B.
The following calculation will apply: (Mill WQA Acid Number - Mill Acid Number Specification) divided by the Mill Acid Number Specification
multiplied by the then-current CTO or BLSS Purchase Price, as applicable, multiplied by the tons delivered during the calendar quarter
from the Mill = allowed $ credit. For example, if the Hopewell, VA Mill sells 1,000 tons of CTO at a Purchase Price of $300 with a WQA
Acid Number of 160, the credit would be ((165-160)/165)* $300 * 1,000 = $9,091.
c. Hexane
Insolubles in CTO or BLSS. Seller will provide a credit equal to eight percent (8%) of the Purchase Price for the tons of Below Standard
Product sold to Buyer during such calendar quarter by the specific Mill if the WQA of Hexane Insolubles exceeds the Specification for
such Mill. Such credit, if payable, shall be limited to a maximum of thirty dollars ($30.00) per ton during the January 1, 2016 to December
31, 2020 period. For each five (5) year period beginning on January 1, 2021, Buyer will calculate a new maximum per ton credit based
on the average maximum credit for Hexane Insolubles agreed to by Buyer with its third-party vendors in advance of such applicable time
period. If no such market average credit can be established based on Buyer’s third-party vendors, then the maximum credit will
be eight percent (8%) of the Purchase Price for the tons of Product sold to Buyer during such calendar quarter by the specific Mill.
d. Soap
Number of CTO - Seller will provide a credit equal to eight percent (8%) of the Purchase Price for the tons of Below Standard Product
sold to Buyer during such calendar quarter by the specific Mill if the WQA of the Soap Number exceeds the Specification for that Mill.
Such credit, if payable, shall be limited to a maximum of thirty dollars ($30.00) per ton during the January 1, 2016 to December 31,
2020 period. For each five (5) year period beginning on January 1, 2021, Buyer will calculate a new maximum per ton credit based on the
average maximum credit for Soap Number of CTO agreed to by Buyer with its third-party vendors in advance of such applicable time period.
If no such market average credit can be established based on Buyer’s third-party vendors, then the maximum credit will be eight
percent (8%) of the Purchase Price for the tons of Below Standard Product sold to Buyer during such calendar quarter by the specific
Mill.
e. Black
Liquor in BLSS. Seller will provide a credit for excess black liquor included in the tons of Below Standard Product sold to Buyer
during such calendar quarter based on the amount that the WQA of Black Liquor is above the Specification maximum limit. For example,
if 1000 tons of BLSS is sold that had a WQA of Black Liquor of sixteen percent (16%), then the allowed credit would be (16% - 10%) *
1000 = 60 tons multiplied by the then-current Purchase Price of BLSS.
ii.
Anthraquinone content. Seller shall not ship Products to Buyer with Anthraquinone levels
exceeding 500 ppm. Buyer shall have the right to reject delivery of any load of Products that exceeds such Anthraquinone level. Upon
such rejection, the Products shall, at Seller’s expense, either be returned to Seller in accordance with Seller’s reasonable
instructions or disposed of by Buyer in a manner authorized in advance by Seller.
iii. Fiber
in Soap. See Exhibit B.
iv.
In the event that Seller provides an individual load or loads of Products with one or more
Negative Impacts (as defined below), Seller in its discretion shall do one of the following: (a) take back such load(s) with Seller reimbursing
Buyer for its freight costs and third party demurrage charges incurred; (b) instruct Buyer to dispose of such loads with Seller reimbursing
Buyer for its actual costs incurred for such disposal; or (c) if Buyer provides in writing the actual and reasonable costs it would incur
to accept and process such load(s), then Seller may, in its sole discretion, agree to cover such costs and then allow Buyer to proceed
with processing such load(s). In the event Seller elects in its sole discretion to pursue either of the foregoing options (a) or (b),
Buyer shall have no responsibility for payment to Seller for such load(s). For purposes of this section, a “Negative Impact”
refers to (a) a Product varying so significantly from a Specification that it would require substantial pre-processing or other extraordinary
corrective measures prior to using such Product in Buyer’s typical production processes, or (b) a Product adversely affected by
a temporary process change at Seller’s Mill or Mills, such as adding a pulping agent, which would result in abnormal plugging,
fouling, or buildup in Buyer’s production system so as to interfere with Buyer’s standard production process.
v. Each
Mill has the right to do its own testing to validate Buyer’s testing accuracy. In the event of a discrepancy, a mutually acceptable
third-party laboratory will be used to settle the discrepancy. Each Party agrees to: (a) accept the values provided by the third-party
laboratory and (b) pay half of such laboratory’s charge for such testing.
vi. Each
claim for credits outlined in this Section 1 must be made in writing within sixty (60) days after close of the calendar quarter in which
the applicable Products were Delivered, or such claim shall be deemed to have been waived.
| D. | Process
Change: If Seller implements an ongoing process change at a Mill different from current
operations that results in ongoing Negative Impacts, then Buyer shall have the right to discontinue
such purchases of such Product from such Mill, and Seller shall have the right to sell such
Product to a third party until such time as the Negative Impacts are no longer occurring,
with no liability to Buyer under this Agreement or at law or in equity in connection with
such process change. |
i. Buyer
is responsible for determining the mode of transportation and for providing suitable tank trucks, rail cars or barges for shipments of
one hundred percent (100%) of the Products from the Mills. All freight charges, insurance, demurrage and all other expenses incident
thereto are for Buyer’s account; provided that, if demurrage charges are due to Seller’s delay, then Seller shall pay, or
reimburse Buyer, for such charges. Buyer will give Seller five (5) credit days towards demurrage per rail car received from Buyer during
the month. Seller’s Mills will invoice Buyer for the demurrage owed for such credit days on a monthly basis at the then-current
Norfolk Southern rate per day and will attach the rail carrier’s demurrage invoice as supporting documentation.
For
example:
If
Seller’s mill receives 10 empty rail cars from Buyer in the month of August, the mill will invoice Buyer for 50 demurrage days
at the Norfolk Southern rate of $60.00 per day the following month.
ii. Buyer
shall use best efforts to ensure that all tank trucks and rail cars are filled to at least 95% of the volume capacity rating for each
such vehicle for all deliveries of CTO and BLSS made to Buyer pursuant to this Agreement.
iii. [RESERVED]
iv. [RESERVED]
v. [RESERVED]
| F. | Notwithstanding
the foregoing, Seller shall have no responsibility to issue credits under this Section 1
or any other compensation or reimbursement to Buyer to the extent that any failure to meet
the quality requirements set forth in Exhibit B is due to quality issues with BLSS
provided by Buyer to Seller for Toll Acidulation (as defined in Section 5A). |
| G. | EXCEPT
FOR SECTION 1(C)(IV), IN NO EVENT WILL THE TOTAL OF CREDITS AVAILABLE UNDER THIS SECTION
1 FOR BELOW STANDARD PRODUCTS EXCEED THE PURCHASE PRICE DESCRIBED IN SECTION 3 FOR THE APPLICABLE
TONNAGE OF SUCH BELOW STANDARD PRODUCTS. THE REMEDIES SET FORTH IN THIS SECTION 1 ARE THE
SOLE AND EXCLUSIVE REMEDIES TO COMPENSATE FOR, OR CORRECT THE CONDITION OF, DEFECTIVE OR
NON-CONFORMING PRODUCTS, AND NO OTHER REMEDIES CONNECTED WITH THIS AGREEMENT, AT LAW, OR
IN EQUITY SHALL APPLY TO SUCH MATTERS. |
| A. | This
Agreement shall be effective for an initial period commencing on the Effective Date until
terminated as provided herein (the “Term”). |
| B. | Notwithstanding
Section 1 or any other provision of this Agreement to the contrary, beginning on the Effective
Date through December 31, 2025, Buyer may give a written notice to the Seller, designating
one (1) Mill (and the volume of Products it produces) that Buyer elects to remove from the
Mills that are subject to the terms, conditions, and requirements of this Agreement for the
remainder of the Term (a “Mill Removal Notice”). |
| C. | Beginning
January 1, 2030 and at any time thereafter, either Party may give written notice to the other
Party that this Agreement will terminate five (5) years from the date of such notice (the
“Agreement Termination Date”). In that event, the quantity of Products
subject to this Agreement will be gradually reduced during a four (4) year period beginning
one (1) year after the termination notice date and ending on the Agreement Termination Date
(the “Transition Period”). The Parties shall meet at least six (6) months
prior to each of the second, third, fourth and fifth year of the Transition Period to discuss
the commercial needs of each Party in regards to this Agreement, and may mutually agree to
the Mills and the quantity of Products that are released from the purchase and sale obligations
set forth in this Agreement in the following year(s). In the event that the Parties do not
reach such a mutual agreement, then, without limiting the first sentence of Section 1A(i)
above, the following schedule of Products volumes shall be automatically released from any
purchase and sale obligations set forth in this Agreement during the Transition Period, subject
to adjustments for opting Product volumes or mills out of this Agreement as provided in Section
2B and Exhibits C and D: |
i.
During the first year (“Year One”) of the Transition Period, Seller shall be obligated to supply, and Buyer shall
be obligated to purchase, one hundred percent (100%) of the output of BLSS and CTO produced at Mills (such total amount of Products sold
by Seller to Buyer during such year to be known as the “Year One Volume”);
ii.
During the second year of the Transition Period, fifteen percent (15%) of the Year One Volume shall be released from the purchase and
sale obligations set forth in this Agreement. The amount of Products released from this Agreement during such year shall be known as
the “Year Two Released Volume”;
iii.
During the third year (“Year Three”) of the Transition Period, the Year Two Released Volume plus an additional fifteen
percent (15%) of the Year One Volume shall be released from the purchase and sale obligations in this Agreement. The total amount of
Products released from this Agreement during such year shall be known as the “Year Three Released Volume”;
iv.
During the fourth year (“Year Four”) of the Transition Period, the Year Three Released Volume plus an additional fifteen
percent (15%) of the Year One Volume shall be released from the purchase and sale obligations in this Agreement. The total amount of
Products released from this Agreement during such year shall be known as the “Year Four Released Volume”; and
v.
During the fifth and final year of the Transition Period, the Year Four Released Volume plus an additional fifteen (15%) of the Year
One Volume shall be released from the purchase and sale obligations in this Agreement.
Seller
shall be free to sell any volumes of released Products to any third parties. Seller shall have the right to designate in writing at least
sixty (60) days prior to each year of the Transition Period the specific U.S. domestic Mill or Mills to be utilized to comprise the volume
of Product released from this Agreement pursuant to this Section 2; provided that, Seller will utilize good faith efforts to match the
released Product volume from an entire Mill or Mills and provided that the designation right is Seller’s decision based on its
operational and economic concerns.
| D. | If
Buyer determines to permanently shut down any CTO refinery, has not acquired or been provided
the use of another CTO refinery by merger, acquisition or otherwise during the period beginning
January 1, 2016 through the Term, and does not intend to replace such shut down refinery
with another CTO refinery or refineries during the Term, then Buyer shall give at least six
(6) months prior written notice to Seller describing the facility and date of such shut down
(a “Shut Down Notice”). Seller shall, within ninety (90) days of receipt
of a Shut Down Notice, give written notice to Buyer that Seller in its sole discretion elects
to (a) remove the volume of CTO handled by the applicable refinery upon shut down and sell
it to third parties, or (b) require Buyer to continue to fulfill its obligations to purchase
one hundred percent (100%) of Seller’s Products under the terms of this Agreement for
up to two (2) years after shut down of any such refinery and allow Buyer to distribute the
volume of CTO handled by such refinery (the “Impacted Volume”) to third
parties (the “Distributor Period”). Seller may terminate the Distributor
Period earlier, and sell such volume of CTO to third parties, upon at least (30) days’
prior written notice to Buyer. If Seller does not terminate the Distributor Period early,
then after such Distributor Period, and with at least six (6) months prior written notice
to Seller, Buyer may do the following: |
i.
[RESERVED]
ii.
If one of Buyer’s North American CTO refineries was shut down, then Buyer may remove from this Agreement the then-current annual
Impacted Volume, after Buyer first ceases to purchase: (a) the same volume of CTO Equivalent Tons from all other suppliers in
the aggregate, or (b) all Products from all other suppliers.
iii.
If all of Buyer’s North American CTO refineries were shut down, then Buyer may remove from this Agreement all of Seller’s
CTO Equivalent Tons.
| A. | The
prices for each of the Products (each a “Purchase Price”) shall be established
quarterly in accordance with this Section 3. All Purchase Prices are exclusive of any applicable
sales, use, VAT or similar transaction taxes, fees or impositions based on Buyer’s
purchases of Products under this Agreement. Buyer shall be solely responsible for all applicable
taxes in connection with its purchases of the Products, except for any taxes on income, franchise,
or similar taxes on imposed on Seller’s revenues. |
| B. | For
CTO sold by Seller from its North American Mills, the Purchase Price shall be established
in accordance with Exhibit C. |
| C. | For
BLSS sold by Seller from its North American Mills, the Purchase Price shall be established
in accordance with Exhibit D. |
| 4. | TERMINATION
OF EXISTING AGREEMENT |
This
Agreement supersedes the Existing Agreement in its entirety.
| A. | Upon
mutual written agreement by the Parties, Buyer may deliver to Seller BLSS from Buyer or Buyer’s
vendors on behalf of Buyer for acidulation into CTO (“Toll Acidulation”).
Buyer and Seller are not obligated to present or accept any minimum volumes for tolling but
each will make commercially reasonable efforts to accommodate volume requests from the other
Party when possible. From time to time, the Parties may enter into specific agreements which
include volume expectations as opportunities arise. |
| | | |
| B. | Buyer
shall be responsible for the costs of delivering the BLSS to the Mills for Toll Acidulation. |
| C. | For
Toll Acidulation, the price shall be established on a quoted basis. |
| D. | Seller
shall have the right to refuse to sell BLSS to Buyer from Mills with limited or no acidulation
capacity, to transfer BLSS produced by Seller to alternative Mills for acidulation into CTO
(“Internally Acidulated BLSS”), and to sell the resulting CTO to Buyer
in accordance with the terms of this Agreement, including without limitation the pricing
for CTO as set forth herein. Seller shall be responsible for handling and shipping among
Seller’s facilities such Internally Acidulated BLSS in connection with Seller’s
acidulation efforts. Seller shall give Buyer written notice at least sixty (60) days prior
to beginning such internal acidulation efforts. Once Buyer has begun purchasing CTO from
such Internally Acidulated BLSS from Seller, Seller shall give Buyer written notice at least
one (1) year prior to terminating such supply of CTO, which termination shall be in Seller’s
sole discretion. Such termination shall thereby obligate Buyer to resume the purchase of
BLSS from the original producing Mill. |
| 6. | NEW
MILL OPTION; SALE OF MILL; SALE OF BUYER; THIRD PARTY PRODUCTS |
| A. | During
the Term, in the event Seller or its affiliates enable the new production of BLSS or CTO
at existing mills or acquire, construct or otherwise begin to operate additional mills which
produce BLSS or CTO (each, a “New Mill”), Seller may in its discretion
provide Buyer the option of adding to this Agreement the CTO or BLSS production of each New
Mill, subject to any time limits as Seller may determine (the “New Mill Option”).
If Seller elects to provide such option, Seller shall provide notice of availability to Buyer
one hundred and eighty (180) days, or such other time as Seller may determine, prior to the
date of first availability of Products from such New Mill. If Seller and Buyer elect to add
a New Mill to this Agreement, then for a term mutually agreed upon in writing by the Parties:
(1) Buyer shall purchase one hundred percent (100%) of the output of Products produced at
the New Mill; (2) the New Mill shall be added to the list of Seller’s Mills set forth
in Section 1A; and (3) quality Specifications will be added to this Agreement by a mutually
agreed upon written amendment, which Specifications will be based in part on the most recent
six (6) months’ production from the New Mill; provided, that with respect to Seller’s
Covington, VA; Tacoma, WA and La Tuque, Quebec mills, such quality Specifications are set
forth on Exhibit B. |
| B. | In
the event that Seller or its affiliates sells or transfers its ownership interest in any
Mill during the Term, Seller or its affiliates, as the case may be, may, subject to Section
17 below, assign this Agreement in part to the entity acquiring such Mill or may cause such
entity to enter into a written agreement, pursuant to which such entity will assume all of
Seller’s or its affiliates’ rights and obligations under this Agreement with
respect to such Mill, except that such entity acquiring such Mill shall not be subject to
Section 6A. Upon such assignment and assumption, Seller and its affiliates, as applicable,
shall have no further obligations under this Agreement with respect to such Mill. |
| C. | During
the Term, and subject to Section 17 below, in the event that Buyer or its affiliates sells
or transfers all or substantially all of its business to which this Agreement relates, then
Buyer or its affiliate will cause the acquirer to enter into a written agreement, on and
as of the consummation of that sale or transfer, pursuant to which that entity will assume
all of Buyer’s rights and obligations under this Agreement. Upon such assignment and
assumption, Buyer and its affiliates, as applicable, shall have no further obligations under
this Agreement; provided that such acquirer meets Seller’s reasonable and standard
credit requirements. If Buyer closes a facility or ceases production at such facility for
any period or reason, Buyer shall give Seller first priority to continue to sell its Products
to Buyer, and Buyer shall terminate or reduce supplies from its other vendors prior to reducing
the amount of any supply of Products purchased from Seller under this Agreement. |
| D. | For
the avoidance of doubt, the parties hereby acknowledge and agree that, during the Term, Seller
and its affiliates may directly or indirectly purchase, utilize, process or sell CTO or BLSS
from any third party unaffiliated with Seller (“Third-Party Products”),
including utilizing acidulation capacity at the Mills. Such Third-Party Products shall not
be part of this Agreement, such Products shall not be sold to Buyer under this Agreement
and Seller may sell the Third-Party Products to one or more third parties. |
| 8. | ROSIN
AVAILABILITY FOR THE PRODUCTION OF ROSIN BASED SIZE |
Seller
acknowledges that Buyer is and intends to be a party to a marketing alliance agreement with one or more third parties that sell rosin
based size. Buyer agrees to make available to its marketing alliance partner(s) tall oil rosin for the manufacture of rosin size required
by Seller at competitive market prices in quantities no less than the Rosin Supply Available for Seller (as defined below). Seller acknowledges
that the terms of sale of the rosin size to Seller from such third parties will be negotiated by Seller and any third parties. For purposes
of this Agreement the “Rosin Supply Available for Seller” shall mean for each calendar quarter, an amount equal to
the sum of: (a) 100,000 pounds and (b) the average quarterly volume of rosin required to manufacture rosin size manufactured by Buyer
for Seller’s benefit during the preceding two calendar quarters. Subject to availability, Buyer will use commercially reasonable
efforts to supply its marketing alliance partner(s) with Seller’s additional rosin size requirements in excess of Seller’s
committed rosin supply. Notwithstanding the foregoing, neither this section nor any other provision of this Agreement shall be deemed
to require or commit Seller to purchase the Rosin Supply Available for Seller or any other volume of rosin size from any third party,
including without limitation any third parties with whom Buyer has or intends to have a marketing alliance. This Agreement is not intended
to and does not create any third party beneficiaries, and Seller may or may not decide to purchase rosin size from such third parties
in Seller’s sole discretion and without liability for any expenses or costs of Buyer or any third parties in connection with such
decisions.
| B. | Once
per year during the Term: (i) Seller shall have the right to audit Buyer’s compliance
with Sections 1C and 3 (including Exhibits C and D) of this Agreement during the most recent
twelve (12) month period and (ii) Buyer shall have the right to audit Seller’s compliance
with Sections 1 (first paragraph), 2B, 3 (including Exhibits C and D), and Exhibit H
of this Agreement during the most recent twelve (12) month period. |
| i. | Such
audit shall be conducted by means of a nationally recognized, independent accounting firm
(the “Auditor”) approved by both Parties (such approval shall not be unreasonably
withheld, conditioned or delayed) who shall inspect and examine the relevant books and records,
including all underlying contracts, amendments, and pricing letters, of the audited Party,
in order to verify compliance with the applicable Section of or Exhibit to this Agreement. |
| ii. | The
requesting Party shall notify the other Party in writing of its intent to exercise its audit
rights hereunder. The Parties shall in good faith make reasonable efforts to mutually agree
upon a joint letter of instruction for the Auditor which shall describe the format and procedures
the Auditor shall undertake and the documents it will examine in the course of its audit.
If the Parties are unable to agree on the terms of the letter of instruction, the Auditor
shall make its examination and determination in accordance with written instructions provided
by the requesting Party; provided that, such instructions shall request the examination to
be conducted in accordance with this Section 10B. A copy of such written instruction shall
be provided to the other Party no later than thirty (30) days prior to the Auditor commencing
its audit; provided that, prior to commencing such audit, the Auditor shall have agreed to
hold in confidence and not disclose to the requesting Party any of the audited Party’s
information. No later than ten (10) days before the audit, the Auditor shall provide the
audited Party with a list of documents to be made available by the audited Party and audited
Party shall have the documents ready for inspection and review when the Auditor arrives to
conduct the audit. In addition, the audited Party is obligated to furnish and make available
to the Auditor such other information in the audited Party’s possession as is required
in the Auditor’s reasonable judgment to conduct the audit. The Auditor shall have the
right to discuss such information with the audited Party’s officers and employees as
is required in the Auditor’s reasonable opinion to conduct the audit. The Auditor shall
provide both Parties with a final written conclusion of compliance or non-compliance and
the amount of the discrepancy, if any. If a discrepancy is found by the Auditor, the Auditor’s
conclusion shall specify the amount owed by the applicable Party and a general statement
as to the basis for the discrepancy. |
| iii. | The
Auditor’s costs and expenses associated with each such audit shall be borne by the
auditing Party if such audit reveals that no refund or reimbursement is due from the audited
Party. If such audit reveals an error in payment of five percent (5%) or more in any item
subject to the audit, such that a refund or reimbursement is due from the audited Party,
then the audited Party shall pay the Auditor’s costs and expenses. |
| iv. | If
as a result of such audit it is determined that one Party owes money to the other Party,
such Party shall pay such money to the other Party within thirty (30) days of written request
by the other, together with interest thereon at the prevailing prime rate as published by
The Wall Street Journal newspaper currently entitled “Money Rates,” not to exceed
the maximum rate allowed by applicable law. Interest shall accrue from the date of the discrepancy
to the date of payment to the other Party.” |
| C. | Seller
reserves the right to install acidulation equipment and convert BLSS to CTO at any Mill at
any time. |
| D. | The
Parties shall comply with the Alkaline Brine procedures set forth on Exhibit H. |
| E. | The
Parties shall comply with the Black Liquor Return procedures set forth on Exhibit I. |
| F. | Seller
shall give at least twelve (12) months’ notice prior to ceasing acidulation of BLSS
into CTO for any period exceeding thirty (30) days at any Mill which formerly conducted such
acidulation, unless such cessation is due to a force majeure event described in Section 16
below. If such Mill is still producing BLSS despite ceasing acidulation, Buyer shall be obligated
to purchase BLSS from such Mill. If, pursuant to Exhibit H, a Party requires return
of Alkaline Brine generated from the resulting offsite acidulation of such BLSS, Buyer shall
arrange for return of the Alkaline Brine to such Mill, and Seller shall pay the transportation
costs for such return during the period of cessation or the remaining portion of the Term,
whichever is sooner. If such cessation of acidulation occurs without the required twelve
(12) months’ notice, then Seller shall have the option in its discretion to (i) internally
acidulate such BLSS at its other Mills pursuant to Section 5D above, (ii) sell such BLSS
to Buyer at a distressed price of fifty percent (50%) of the then-current Purchase Price
for BLSS under this Agreement, for each month that notice was delayed and less than the required
twelve (12) months’ notice (the “Delay Period”), or (iii) choose
to self-consume and burn such BLSS for a period of twelve (12) months, or any combination
of the foregoing. At the end of the Delay Period, Buyer shall be obligated to purchase BLSS
at the then-current Purchase Price for BLSS. |
| A. | If
requested by Buyer, Seller will inform Buyer of planned plant outages as well as its estimate
of the quantity of CTO and/or BLSS it may have available in any succeeding calendar quarter.
Seller’s estimate shall not obligate Seller to provide any minimum quantity. |
| B. | Subject
to variances in volumes of Products supplied due to planned outages, seasonality in production,
changes in product grade mix, or other such general production factors, Seller shall not
purposely withhold volumes from month to month in order to deliver Products in bulk at unequal
intervals. |
| C. | Title
and risk of loss to all CTO and BLSS shall pass to Buyer at Seller’s Mill site when
loaded in tank trucks, rail cars or barges, as mutually agreed upon (“Delivery”). |
| A. | Seller
shall invoice Buyer upon Delivery of Products and Buyer shall pay each invoice within thirty
(30) days of the invoice date. Each Delivery of CTO and BLSS shall constitute a separate
and distinct sale, and any default by Buyer in ordering, accepting or paying for any Delivery
shall not affect Seller’s right to insist upon full performance of Buyer’s obligations
hereunder for the full Term. Likewise, any default by Seller in its performance hereunder
shall not affect Buyer’s right to insist upon full performance of Seller’s obligations
hereunder for the full Term. |
| B. | To
the extent that Buyer is more than thirty (30) days past due with payments, Buyer shall pay
interest on unpaid amounts at the rate equal to the lesser of (i) then-applicable “Prime
Rate” of interest per annum as published in the Wall Street Journal plus eight percent
(8%), and (ii) the maximum amount permitted by applicable law. To the extent that Buyer is
sixty (60) or more days past due with payments, Seller may demand a letter of credit for
past due amounts. Seller may cease to ship CTO and/or BLSS to Buyer if Buyer is more than
thirty (30) days past due with payments until it is provided a letter of credit covering
past due amounts or all past due payments are received, in addition to its other rights and
remedies in connection with this Agreement. |
| C. | (i)
Buyer may, but shall not be obligated to, obtain a credit rating by independent, third party,
credit-rating institutions. Without limiting Seller’s other rights and remedies, in
the event that Buyer obtains a credit rating and Buyer’s credit rating at any time
falls to or below a Moody’s Investor Services (“Moody’s”)
standard rating of “B1”, or a Standard & Poor’s Financial Services
LLC (“S&P”) standard rating of “B+” (each a “Minimum
Credit Level”), then Seller shall have the right, in its sole discretion, on thirty
(30) days’ notice to Buyer, to require Buyer either to (a) post a letter of credit
in an amount necessary to cover all outstanding accounts receivable due from Buyer to Seller
and all pending sales of Product by Seller to Buyer or (b) forward a cash amount equal to
one hundred twenty five percent (125%) of the highest accounts receivable balance of Seller’s
sales to Buyer over the previous six (6) months or one hundred twenty five percent (125%)
of the forecasted accounts receivable balance, whichever is higher. Any such cash amount
received by Seller from Buyer may be comingled with other funds of Seller and shall not bear
interest. At Seller’s sole discretion, any such cash amounts and the proceeds of any
draws under a letter of credit may be applied by Seller to outstanding accounts receivable
from Buyer or held as security for Buyer’s obligations under this Agreement. Upon application
of all or any portion of such cash amounts or proceeds of draws under a letter of credit
to outstanding accounts receivable from Buyer, Seller shall have the right, in its sole discretion,
to require Buyer to post additional letters of credit or additional cash in amounts sufficient
to continue to meet the requirements of clause (a) or (b) above, as applicable. To secure
Buyer’s obligations under this Agreement, Buyer hereby grants to Seller a security
interest in all letters of credit, letter of credit rights and proceeds thereof and all cash
amounts now or hereafter received by Seller pursuant to this Section 12C. Seller may suspend
production and defer or eliminate further Deliveries and sell its Products to other buyers,
in whole or in part, until such conditions are met, with a corresponding adjustment to any
volume requirements or credit calculations or incentive payments under this Agreement. When
both of Buyer’s credit ratings return to levels above the Minimum Credit Levels, the
original payment terms of this Agreement shall be reinstituted for so long as Buyer’s
credit levels remain above the Minimum Credit Levels. |
(ii)
In the event Buyer is unable to obtain or elects not to obtain the foregoing Moody’s or S&P credit ratings, Buyer shall provide
its annual audited financial statements and its quarterly company-prepared financial statements to Seller, and any other related information
reasonably requested by Seller, in order for Seller to make an informed and accurate assessment of whether Buyer meets the Seller’s
typical credit requirements and whether Buyer must post a letter of credit or cash amount as described above; provided, that if Buyer
does not provide such financial information, then Buyer acknowledges that Seller may, among its other rights, require Buyer to post the
letter of credit or forward the cash amount described above. Buyer’s posting of such letter of credit or forwarding of such cash
amount shall be absolute and necessary preconditions to Seller’s obligation to provide any Products to Buyer under this Agreement,
and any failure of Buyer to satisfy such conditions will result, in Seller’s sole discretion, in (a) reduction in any amount that
Seller deems appropriate to the volumes or percentage of Products sold to Buyer under this Agreement, (b) Seller having the right to
sell to third parties any portion of the volumes or percentage of Products not sold to Buyer, and (c) Seller having the right to declare
that Buyer’s failure is sufficient and conclusive evidence of Buyer’s insolvency and inability to pay its debts as they mature,
in which case Seller shall have the right to terminate this Agreement pursuant to Section 18A below.
Seller
represents and warrants to Buyer that (a) Seller will convey good and marketable title to the Product free and clear of any liens and
encumbrances, and (b) Seller shall manufacture the Products in accordance with all applicable laws, rules and regulations. Seller MAKES
NO OTHER WARRANTIES, OF ANY KIND WHATSOEVER, WHETHER EXPRESS, IMPLIED, ORAL, WRITTEN, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
All
breach of warranty claims relating to any Delivery must be made in writing within thirty (30) days after close of the calendar quarter
in which the CTO or BLSS, as the case may be, is received, or it shall be deemed to have been waived.
Except
as set forth in this Agreement, Seller’s liability to Buyer or anyone claiming through or on behalf of Buyer with respect to any
claim or loss arising out of a breach of warranty or this Agreement shall be limited to an amount equal to (a) the applicable Purchase
Price of the volume of CTO or BLSS, associated with such liability, or (b) where mutually agreed to, replacement of the CTO or BLSS in
question. In no event shall EITHER party be liable for any PUNITIVE, incidental, consequential,
indirect or special losses or damages (including, without limitation, lost profits, lost revenues, loss of business AND DIMUNITION OF
VALUE), whether foreseeable or not AND whether OR NOT occasioned by any failure to perform or the breach of any representation, warranty,
covenant or other obligation under this Agreement for any cause whatsoever. Any warranty claim shall be brought within six (6)
months of the date of delivery of the relevant load(s) of Products from Seller to Buyer or thereafter be barred. For the avoidance of
doubt, any warranty claim shall apply only to those warranties expressly provided for in Section 13 above.
Seller
shall not be liable for any failure to deliver or for any delay in delivery, and Buyer shall not be liable for any failure to request
or take delivery or for any delay in requesting or taking delivery, when any such failure or delay shall be caused, directly or indirectly,
in each case beyond the reasonable control of the party whose performance is delayed, by fire, floods, accidents, explosions, machinery
breakdown, sabotage, strikes or other labor disturbances (regardless of the reasonableness of the demands of labor), civil commotions,
riots, invasions, wars (present or future), acts, restraints, requisitions, regulations or directions of any government in or of the
United States or Canada, voluntary or mandatory compliance by Buyer or Seller with any request of any federal, state, or local government
or any officer, department, agency or committee of such government for purposes of national defense or for materials represented to be
for purposes of (directly or indirectly) producing articles for national defense or completing national defense facilities, shortages
of labor, fuel, power or raw materials, inability to obtain supplies, failure of normal sources of supplies, inability to obtain or delays
of transportation facilities, any act of God or any cause (whether similar or dissimilar to the foregoing), beyond the reasonable control
of Buyer or Seller, as the case may be, affecting the production, Delivery, or consumption of any materials covered by this Agreement.
The affected Party shall promptly notify the other Party of the occurrence of any of the foregoing and use commercially reasonable efforts
to resolve such issue promptly.
This
Agreement may not be assigned (by operation of law or otherwise) in whole or in part by either Party without first obtaining the written
consent of the other Party thereto, which consent shall not be unreasonably delayed, conditioned, or withheld; provided, however, that
either Party may assign or otherwise transfer all of its rights and obligations under this Agreement to any entity controlling, controlled
by or under common control with such Party, upon prior written notice to the other Party. In each case of assignment the entity to which
the Agreement is assigned shall accept all the duties and obligations of the assigning Party hereunder.
| A. | Either
Party may terminate this Agreement, immediately, upon giving written notice to the other
Party, if the other Party liquidates or suspends all, or a substantial portion, of its business;
dissolves or terminates its existence; becomes insolvent or unable to pay its debts as they
mature; or commits any act of bankruptcy or makes any arrangement, composition or assignment
for the benefit or creditors and such bankruptcy or other insolvency proceedings are not
discharged within sixty (60) days of the occurrence thereof, all of which events shall be
considered a breach hereunder. Upon termination, the non-defaulting Party may seek such damages
to which it may be entitled at law or in equity. |
| B. | Except
as to defects in condition or nonconformance of Products, which are governed by the rights
remedies set forth in Section 1 above, or Buyer’s failure to provide assurance of financial
stability as set forth in Section 12C above, if either Party defaults in the performance
of any material provision of this Agreement, the other Party may give notice in writing of
such default and, if after thirty (30) days following the giving of such notice said default
has not been rectified, the other Party may terminate this Agreement by providing written
notice of termination. |
| C. | The
termination of this Agreement shall not release either Party from the obligation to pay any
sum that may be owing to the other Party (whether then or thereafter due to Seller) or operate
to discharge any liability that had been incurred by either Party prior to any such termination.
Furthermore, the provisions in Sections 1C, 12-15, 17, 19 and 21-22 shall survive the termination
or expiration of this Agreement. |
| 19. | INSURANCE
AND SAFETY POLICIES |
| A. | Each
Party shall obtain, pay for and keep in force during the Term the following insurance coverage
with at least the following minimum limits of coverage: (i) statutory workers’ compensation
in accordance with all state and local requirements; (ii) employer’s liability with
a limit of no less than $1,000,000 for one or more claims arising from each accident; (iii)
commercial general liability, including coverage for completed operations (for at least two
years after the performance of the Services) and contractually assumed obligations, with
liability limit of no less than $1,000,000 per occurrence and $2,000,000 general aggregate;
(iv) business automobile liability for all owned, non-owned and hired vehicles with bodily
injury limits of no less than $1,000,000 combined single limit; and (v) excess umbrella liability
coverage with a limit of no less than $5,000,000 per occurrence. Each Party shall cause its
insurers to (a) waive all rights of subrogation against the other Party, its officers, directors
and employees, (b) include the other Party and its affiliates as additional insureds for
the coverages set forth in clauses (iii), (iv) and (v) above and (c) furnish certificates
of insurance to the other Party in a form acceptable to the other Party evidencing that the
above insurance is in effect and otherwise complies with the requirements of this Section.
Each Party shall give the other Party at least thirty (30) days written notice of any material
change or alteration in or the cancellation of any required policy of insurance. At all times
during the Term, all insurance must be issued by an entity authorized to do business in the
State(s) where business is transacted relating to the Products and must be rated “A-”
or better with a financial rating of VIII or better in the A.M. Best Rating Guide. The carrying
by each Party of the insurance required herein shall in no way be interpreted as relieving
such Party of any other obligations it may have under this Agreement. |
| B. | As
Buyer’s employees and representatives will be coming to the Mills on a recurring basis,
Buyer agrees that its employees and any of its authorized subcontractors at each Mill site
shall strictly abide by such Mill’s safety and security policies and procedures. |
Any
notice which a Party hereto is required to give or may desire to give in connection with this Agreement shall be in writing and shall
either be (a) delivered in person, (b) sent standard overnight courier or (c) mailed, registered or certified mail, return receipt requested,
postage prepaid and addressed to the attention of the Party intended as the recipient at the address listed below. The Party provided
such written notice shall also send a contemporaneous notice by email to the recipient’s email address provided below. All such
notices shall be deemed to have been received upon the date of delivery.
To
Seller:
WestRock
Company
1000
Abernathy Road NE
Atlanta,
GA 30328
Attn:
Chief Procurement Officer
With
a copy to:
WestRock
Company
Attn:
General Counsel
1000
Abernathy Road NE
Atlanta,
GA 30328
To
Buyer:
Ingevity
Corporation
Attn:
CTO Procurement Manager
4920
O’Hear Avenue
North
Charleston, SC 29405
Ingevity
Corporation
Attn:
General Counsel
4920
O’Hear Avenue, Suite 400
North
Charleston, SC 29405
Any
Party receiving Confidential Information (as defined below) from the other Party shall maintain the confidential and proprietary status
of such Confidential Information, keep such Confidential Information and each part thereof within its possession or under its control
sufficient to prevent any activity with respect to the Confidential Information that is not specifically authorized by this Agreement,
use commercially reasonable efforts, in each case, to prevent the disclosure of any Confidential Information to any other person or entity,
and use commercially reasonable efforts to ensure that such Confidential Information is used only for those purposes specifically authorized
herein; provided, however, that such restrictions shall not apply to any Confidential Information which is (a) independently developed
by, or already in possession of, the receiving Party, as demonstrated by its written records, (b) in the public domain at the time of
its receipt or thereafter becomes part of the public domain through no fault of the receiving Party, (c) received without an obligation
of confidentiality from a third party who, to the receiving party’s knowledge, has the right to disclose such information, (d)
released from the restrictions of this Section 21 by the express written consent of the other Party hereto, or (e) compelled to be disclosed
by law or pursuant to a court order (the disclosing Party shall, however, use commercially reasonable efforts to obtain confidential
treatment of any such disclosure). “Confidential Information” shall mean: (x) the terms and conditions of this Agreement
and (y) all information and records relating to the operation of each other’s business, including, without limitation, trade secrets,
technical information, development, production, sales, marketing, pricing and financial details related to the refining of CTO. Each
Party shall return or destroy all Confidential Information of the other Party within thirty (30) days following the termination of this
Agreement for any reason, except for one (1) copy that may be retained by the recipient’s legal department for archival, compliance
or enforcement purposes.
This
Agreement is to be governed by and interpreted in accordance with the internal substantive laws of the Commonwealth of Virginia. The
Parties consent to and agree that venue is proper with, and any and all disputes arising out of or relating in any way to the Agreement
shall be subject to, the exclusive jurisdiction of, the U.S. District Court for the Eastern District of Virginia (Richmond Division),
or the Circuit Court of the County of Henrico, Virginia. The Parties consent to the jurisdiction of such courts, agree to accept service
of process by mail and waive any jurisdictional or venue defenses otherwise available. The Parties expressly reject the applicability
to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.
Except
as otherwise expressly provided herein, the failure or delay by either Party to exercise any of its rights hereunder shall not be construed
to be a waiver of any of such rights. The provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in
part, only by a writing signed by both Parties. No waiver of any performance required under this Agreement shall be deemed a waiver of
future compliance with all of the terms hereof.
This
Agreement constitutes the entire agreement between the Parties hereto with respect to the sale and purchase of CTO and BLSS and there
are no understandings, representations or warranties of any kind whatsoever with respect to such sale and purchase except as expressly
herein set forth. All modifications to this Agreement shall be in writing and signed by Buyer and Seller. A failure to exercise any right
hereunder with respect to any breach shall not constitute a waiver of such right with respect to any subsequent breach. Any references
to “the Agreement” in the exhibits hereto are references to this Agreement.
| 25. | COUNTERPARTS;
FACSIMILE SIGNATURE |
This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument. A signature sent by telecopy or facsimile transmission shall be as valid and binding upon
the Party as an original signature of such Party.
Signatures
on Following Page.
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.
| INGEVITY
CORPORATION |
|
WESTROCK
SHARED SERVICES,
LLC |
| |
|
|
|
|
| By: |
/s/
John C. Fortson |
|
By: |
/s/
Peter W. Anderson |
| Name: |
John
C. Fortson |
|
Name: |
Peter
W. Anderson |
| Title: |
Chief Executive Officer |
|
Title: |
Chief
Supply Chain Officer |
| |
WESTROCK
MWV, LLC |
| |
|
|
| |
By: |
/s/
Peter W. Anderson |
| |
Name: |
Peter
W. Anderson |
| |
Title: |
Chief
Supply Chain Officer |
