Common use of Pay or Take Clause in Contracts

Pay or Take. 5.3.1 If for any Calendar Year, Seller fails for any reason other than Force Majeure to make available to Buyer Actual Designated Tracts for any Harvesting Year that would allow Buyer to harvest at least ninety percent (90%) of each of the Products comprising the designated Annual Purchase Amount for such Calendar Year, Seller will pay Buyer at a rate of $10.00 per ton for Hardwood Pulpwood, $15.00 per ton for Softwood Pulpwood and $30 per ton for Hardwood Stringers, respectively, multiplied by the difference between (x) ninety percent (90%) of the number of tons of the applicable Product comprising the Annual Purchase Amount for the applicable Calendar Year minus (y) the actual number of tons of the applicable Product made available by Seller for harvesting by Buyer during such Calendar Year, as liquidated damages and not as a penalty, and Buyer shall have no further claim for damages on account of such shortfall in the delivery of such Product comprising the Annual Purchase Amount. Payment shall be made by Seller to Buyer on demand no later than fifteen (15) days from Buyer’s written request for such payment. 5.3.2 If for any Calendar Year, Buyer fails for any reason other than Force Majeure to harvest at least ninety percent (90%) of each Product comprising the Annual Purchase Amount (other than by virtue of a failure of Seller to make available the full amount of Tracts for harvesting such Product in the applicable Calendar Year), then Buyer shall pay Seller for the shortage at a rate of $10.00 per ton for Hardwood Pulpwood, $15.00 per ton for Softwood Pulpwood and $30 per ton for Hardwood Stringers, respectively, multiplied by the difference between (x) ninety percent (90%) of the number of tons of the applicable Product comprising the Annual Product Amount for the applicable Calendar Year minus (y) the volume of the applicable Product comprising the Annual Product Amount actually harvested by Buyer hereunder during such Calendar Year, as liquidated damages and not as a penalty, and Seller shall have no further claim for damages on account of Buyer’s failure to harvest the Annual Product Amount. Payment shall be made by Buyer to Seller on demand no later than fifteen (15) days from Seller’s written request for such payment.

Pay or Take. 5.3.1 (a) Seller agrees to sell and deliver, subject to Force Majeure and Section 3.3, and Buyer agrees to purchase, subject to Force Majeure and Section 3.3, the Annual Volumes of Products to be produced under the direction of Seller during each Calendar Year as determined in Article II. If for any Calendar Year, Seller fails for any reason other than Force Majeure to make available tender to Buyer Actual Designated Tracts for any Harvesting Year that would allow Buyer to harvest at least ninety percent (90%) of each of the Products comprising the designated Annual Purchase Amount for such Calendar YearVolumes of Products, Seller will pay Buyer at a rate of $10.00 per ton for Hardwood Pulpwood, $15.00 per ton for Softwood Pulpwood and $30 per ton for Hardwood Stringers, respectively, multiplied by the difference between (x) ninety percent (90%) of the number Annual Volumes of tons of the applicable Product comprising the Annual Purchase Amount Products for the applicable Calendar Year minus (y) the actual number volume of tons of the applicable Product made available Products actually tendered by Seller for harvesting by Buyer during such Calendar Year, as liquidated damages and not as a penalty, and Buyer shall have no further claim for damages on account of such shortfall in the delivery of such Product comprising the Annual Purchase AmountVolumes. Payment shall be made by Seller to Buyer on demand no later than fifteen (15) days from Buyer’s written request for such payment. Notwithstanding the foregoing: (i) if adverse weather conditions during the last ninety (90) days of any Calendar Year prevent Seller from delivering the Annual Volumes of Natural Hardwood or Pine Pulpwood for said Calendar Year, the payments provided for in this Section 4.2(a) shall not apply unless and to the extent said volumes (together with any volumes required with respect to the first quarter of the following Calendar Year) are not delivered on or before March 31 of the following Calendar Year, and (ii) if adverse weather conditions during any Calendar Year prevent Seller from delivering the Annual Volumes of Plantation Hardwood for said Calendar Year, the payments provided for in this Section 4.2(a) shall not apply unless and to the extent said volumes (together with any volumes required with respect to the following Calendar Year) are not delivered on or before December 31 of the following Calendar Year. Seller shall keep Buyer advised of any such adverse weather conditions and Seller’s need for additional time to deliver said volumes. 5.3.2 (b) If for any Calendar Year, Buyer fails for any reason other than Force Majeure to harvest purchase at least ninety percent (90%) of each Product comprising the Annual Purchase Amount (other than by virtue Volumes of a failure of Seller to make available the full amount of Tracts for harvesting such Product in the applicable Calendar Year)Products from Seller, then Buyer shall pay Seller for the shortage at a rate of $10.00 per ton for Hardwood Pulpwood, $15.00 per ton for Softwood Pulpwood and $30 per ton for Hardwood Stringers, respectively, multiplied by the difference between (x) ninety percent (90%) of the number Annual Volumes of tons of the applicable Product comprising the Annual Product Amount Products for the applicable Calendar Year minus (y) the volume of the applicable Product comprising the Annual Product Amount Products actually harvested purchased by Buyer hereunder during such Calendar Year, as liquidated damages and not as a penalty, and Seller shall have no further claim for damages on account of Buyer’s failure to harvest purchase the Annual Product AmountVolumes. Payment shall be made by Buyer to Seller on demand no later than fifteen (15) days from Seller’s written request for such payment. (c) Subject to the terms of Section 3.2 above, any payments made pursuant to this Section 4.2 shall be calculated separately for Pine Pulpwood and Hardwood Pulpwood. If this Agreement is in termination at a time other than the beginning or end of a Calendar Year, the Annual Volumes for purposes of calculating such shortage payment for either party will be prorated equitably.

Pay or Take. 5.3.1 (a) Supplier agrees to sell and deliver, subject to Force Majeure, and MeadWestvaco agrees to purchase, subject to Force Majeure, the Annual Volumes of Pulpwood and Sawtimber to be produced under the direction of Supplier during each Calendar Year as determined in Section 2.3(c). If for any Calendar Year, Seller Supplier fails for any reason other than Force Majeure to make available tender to Buyer Actual Designated Tracts for any Harvesting Year that would allow Buyer to harvest MeadWestvaco at least ninety percent (90%) % of each of the Products comprising the designated Annual Purchase Amount for such Calendar YearVolumes of Pulpwood and Sawtimber which comply with the Product Specifications, Seller State Best Management Practices (“BMPs”) and the forest certification standards, Supplier will pay Buyer MeadWestvaco (i) at a rate of $10.00 per ton for Hardwood Pulpwood, $15.00 per ton for Softwood Pulpwood and $30 per ton for Hardwood Stringers, respectively, multiplied by the difference between (x) ninety percent (90%) % of the number Annual Volumes of tons of the applicable Product comprising the Annual Purchase Amount Pulpwood for the applicable Calendar Year minus (y) the actual number volume of tons Pulpwood actually tendered by Supplier during such Calendar Year; (ii) at a rate of $35.00 per ton multiplied by the difference between (x) 90% of the Annual Volumes of Sawtimber for the applicable Product made available Calendar Year minus (y) the volume of Sawtimber actually tendered by Seller for harvesting by Buyer Supplier during such Calendar Year, and (iii) at a rate of $7.00 per ton multiplied by the difference between (x) 90% of the Annual Volume of pine chip Stumpage for the applicable Calendar Year minus (y) the volume of pine chip Stumpage actually tendered by Supplier during such Calendar Year, each of (i), (ii) and (iii) as liquidated damages and not as a penalty, and Buyer MeadWestvaco shall have no further claim for damages on account of such shortfall in the delivery of such Product comprising the Annual Purchase AmountVolumes. Payment shall be made by Seller Supplier to Buyer MeadWestvaco on demand no later than fifteen (15) days from BuyerMeadWestvaco’s written request for such payment. 5.3.2 (b) If for any Calendar Year, Buyer MeadWestvaco fails for any reason other than Force Majeure to harvest purchase at least ninety percent (90%) % of each Product comprising the Annual Purchase Amount (other than by virtue Volumes of a failure of Seller to make available the full amount of Tracts for harvesting such Product in the applicable Calendar Year)Pulpwood and Sawtimber from Supplier, then Buyer MeadWestvaco shall pay Seller Supplier for the shortage (i) at a rate of $10.00 per ton for Hardwood Pulpwood, $15.00 per ton for Softwood Pulpwood and $30 per ton for Hardwood Stringers, respectively, multiplied by the difference between (x) ninety percent (90%) % of the number Annual Volumes of tons of the applicable Product comprising the Annual Product Amount Pulpwood for the applicable Calendar Year minus (y) the sum of (1) the volume of the applicable Product comprising the Annual Product Amount Pulpwood actually harvested purchased by Buyer MeadWestvaco hereunder during such Calendar Year plus (2) if a Verification Failure (as defined below) has occurred with respect to that Calendar Year, the volume of Pulpwood deemed to be purchased by MeadWestvaco hereunder during such Calendar Year as provided below in this Section 4.2(b); (ii) at a rate of $35.00 per ton multiplied by the difference between (x) 90% of the Annual Volumes of Sawtimber for the applicable Calendar Year minus (y) the sum of (1) the volume of Sawtimber actually purchased by MeadWestvaco hereunder during such Calendar Year plus (2) if a Verification Failure (as defined below) has occurred with respect to that Calendar Year, the volume of Sawtimber deemed to be purchased by MeadWestvaco hereunder during such Calendar Year as provided below in this Section 4.2(b), and (iii) at a rate of $7.00 per ton multiplied by the difference between (x) 90% of the Annual Volumes of pine chips Stumpage for the applicable Calendar Year minus (y) the sum of (1) the volume of pine chips Stumpage actually purchased by MeadWestvaco hereunder during such Calendar Year plus (2) if a Verification Failure (as defined below) has occurred with respect to that Calendar Year, the volume of pine chips Stumpage deemed to be purchased by MeadWestvaco hereunder during such Calendar Year as provided below in this Section 4.2(b), each of (i), (ii) and (iii) as liquidated damages and not as a penalty, and Seller Supplier shall have no further claim for damages on account of BuyerMeadWestvaco’s failure to harvest purchase the Annual Product AmountVolumes. Payment shall be made by Buyer MeadWestvaco to Seller Supplier on demand no later than fifteen (15) days from SellerSupplier’s written request for such payment. For purposes of this Section 4.2(b) only, a Verification Failure shall mean the failure by Supplier to provide to MeadWestvaco third-party verification of Supplier’s compliance with Sustainable Forest Practice Standards with respect to the portion of the Timberlands from which Products are supplied to the ▇▇▇▇▇ Mill and Cottonton Mill during such Calendar Year. If a Verification Failure occurs with respect to a Calendar Year and, following 30 days’ prior written notice to Supplier of such occurrence, MeadWestvaco purchases from third parties for delivery to the ▇▇▇▇▇ Mill and Cottonton Mill during such Calendar Year Products which have been so verified, such purchases (to the extent not greater than the excess of 90% of the applicable Annual Volumes of Pulpwood over the volume of Pulpwood actually purchased by MeadWestvaco hereunder for the applicable Calendar Year) shall be deemed made from Supplier solely for the purposes of this Section 4.2(b) and shall not be deemed made from Supplier for purposes of Article III. (c) The payments, if any, shall be calculated separately for Pine Pulpwood, Hardwood Pulpwood, Chip-n-saw and Pine Sawlogs. If this Agreement is terminated at a time other than the beginning or end of a Calendar Year, the Annual Volumes for purposes of calculating such shortage payment for either party will be prorated equitably. The rates of $15.00 per ton and $35.00 per ton, as applicable, shall be adjusted on each January 1st pursuant to the mechanism set forth in Section 4.1(b) for adjusting Contract Prices. (d) This Section 4.2 will no longer apply to Sawtimber on the date that is six months after the date on which MeadWestvaco notified Supplier of the closing of Cottonton Mill.