EXHIBIT 10.12
XXXX PRODUCTS DIVISION
CANS SUPPLY AGREEMENT
This CANS SUPPLY AGREEMENT ("Agreement") is made as of March 1, 1998, between
PACKAGING RESOURCES INCORPORATED, a Delaware corporation ("PRI"), and XXXX
PRODUCTS DIVISION of XXXXXX LABORATORIES, an Illinois corporation ("XXXX").
WITNESSETH:
WHEREAS, PRI desires to sell to XXXX, and XXXX desires to purchase from PRI,
barrier plastic CANS for use in XXXX' production of its product.
WHEREAS, PRI and XXXX are willing to enter into such an arrangement on the
terms and subject to the conditions set forth in this Agreement:
NOW, THEREFORE, in consideration of the promises and the mutual agreements
set forth herein, and for other good and valuable consideration the receipt
and adequacy of which is hereby acknowledged, the parties agree as follows:
1. PURCHASE AND SALE OF CANS.
(a) Pursuant to the provisions and conditions of this Agreement,
PRI shall sell barrier plastic CANS, as more particularly described in
EXHIBIT A hereto ("CANS"), to XXXX, and XXXX shall purchase [*] of their
requirements for CANS and take delivery of CANS from PRI. XXXX agrees to make
a good faith effort to purchase a total of [*] CANS per year; however, such
quantities shall only apply so long as CANS are employed in the sale of XXXX
product lines including, but not limited to, product lines commonly known as
Pediatric and Nutritional products. If XXXX' total purchases of CANS exceed
[*] for any contract year, PRI agrees to reduce the price per thousand on the
sale of all CANS in excess of the [*] by [*] of the current selling price.
(b) Notwithstanding the foregoing, the quantity of CANS, PRI
shall be obligated to sell XXXX, in any one month, shall not exceed [*] CANS.
In the event that XXXX' orders exceed this amount, PRI will make a reasonable
effort to fill all orders for quantities exceeding such amount.
(c) Purchases and sales of CANS hereunder shall be made pursuant
to XXXX' written purchase orders, on forms mutually agreed to by the
parties, received by PRI. Each such purchase order
shall be governed by the provisions and conditions of this Agreement and, to
the extent consistent with this Agreement, the terms of the applicable
purchase order.
(d) XXXX shall explore expanded use of the CANS and shall not
convert to metal cans any product currently packaged in CANS unless the CANS
fail to perform or XXXX' business interests require that the CAN volume be
moved to a XXXX manufacturing facility that utilizes only the metal can.
(e) PRI will perform and bear the cost of all routine maintenance
on XXXX' tools to include routine inspection, periodic cleaning and
polishing, and recalibration of all tooling main assemblies (mold bases and
trim shoe assemblies) and major overhauls, at a minimum of every two (2)
years, of the main mold base and trimming assemblies to include seals,
shafts, die pins and bushings. Routine maintenance, as referred to above,
shall not include, and XXXX shall be responsible for, the replacement of the
"Tool Parts" related to the production of the CAN ("Tool Parts" to be defined
herein as only the following parts of the Tool: Mold Cavities, Flange
Squeezers, Mold Plugs, Trim Punches and Trim Die Plates). When and if these
Tool Parts cannot be used to maintain the dimensional specifications of the
CANS, they will be replaced by PRI and XXXX will be invoiced, according to
the payment terms in Paragraph 2 (c), for such worn tool parts. The XXXX
costs for these tool parts are not to include PRI labor. (i.e. PRI pays /
absorbs PRI labor). XXXX shall not be responsible for any costs of such
replacement of these tooling parts arising out of the negligence of PRI. The
costs for replacement tool parts to XXXX will not exceed in any agreement
year an amount equal to [*] per thousand CANS produced in that same agreement
year. Replaced tool parts will be made available to XXXX at XXXX' request.
2. PURCHASE PRICE.
(a) The delivered price of CANS through February 28, 1999, shall
be as described in EXHIBIT B hereto - the "Pricing Schedules. The price
effective as of March 1, 1999, will be reduced by [*] per one thousand CANS.
(b) Price changes for increases in "Resin" costs shall be
implemented only when incurred by PRI and then only in accordance with the
current resin escalator figures included in the attached Pricing Schedules.
All resin price increases shall be implemented only after thirty (30) days
written notice to XXXX. No price changes shall result from non-resin cost
increases incurred by PRI during the term of this Agreement.
(c) Within thirty (30) days after the later of (i) XXXX' receipt
of PRI's invoice, or (ii) delivery of the CANS subject to such invoice, XXXX
shall pay the applicable invoice in full. If payments are transferred to PRI
within five (5) days after the later of (i) and (ii) above with regard to
CANS shipped to Columbus or eight (8) days for CANS shipped to Casa Grande,
PRI shall allow XXXX to deduct one (1)
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percent of the total invoice amount. All payments shall be sent to PRI at the
address specified by PRI from time to time.
(d) In the event XXXX fails to pay any invoice hereunder as
scheduled, PRI shall be entitled to exercise any right it may have at law or
in equity in connection therewith.
3. SHIPMENTS AND FORCE MAJEURE.
(a) PRI shall ship CANS sold pursuant to this Agreement F.O.B.
PRI's facility(s) ("The Facility"). Title and risk of loss for any CANS sold
hereunder shall pass from PRI to XXXX upon delivery to XXXX at The Facility.
(b) All CANS shall be subject to inspection upon delivery by PRI
to XXXX. Any CANS which do not comply with specifications in EXHIBIT A, as it
may be modified from time to time, and with standards established pursuant to
Section 7 hereof may be rejected by XXXX. XXXX shall give written notice to
PRI of any such rejection within thirty (30) days from the date of delivery.
To the extent the CANS supplied thereunder do not meet the specifications and
standards agreed to by the parties pursuant to Section 7 hereof and XXXX
gives PRI written notice of such failure within thirty (30) days of delivery,
XXXX' sole remedy hereunder shall be to have the defective CANS returned to
PRI at PRI's expense and PRI shall, within thirty (30) days of its receipt of
such defective CANS, replace such CANS (FOB XXXX' facility) or refund (or
credit) the entire amount paid for such CANS, as elected by XXXX. The
preceding sentence shall not be construed to limit the exercise of XXXX'
rights arising under section 9.
(c) Failure of either party to perform its obligations under this
Agreement shall not subject such party to any liability to the other if such
failure is caused by acts such as but not limited to acts of God, fire,
explosion, flood, drought, war, riot, sabotage, embargo, strikes or other
labor trouble, or compliance with any order or regulation of any government
entity acting with color of right. During any period of force majeure in
which PRI is unable to fulfill XXXX' orders for CANS, XXXX may purchase CANS
from other sources and, if such period exceeds six (6) months, XXXX shall
have the right to terminate this Agreement upon written notice to PRI.
4. INCREMENTAL OPPORTUNITIES.
XXXX agrees to explore in good faith the following incremental
opportunities. The decision to act on these opportunities is solely at XXXX'
discretion:
(a) Explore with PRI the possibility of converting Jevity product
from the current metal can to CANS in Casa Grande.
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(a) Explore with PRI the possibility of converting Jevity product
from the current metal can to CANS in Casa Grande.
(b) Provide PRI first right of refusal for the 1 lb. and/or 2 lb.
plastic powder cans should they become commercial during the Term.
(c) Provide PRI the opportunity to become a qualified supplier
for the ReadiCup Barrier Sheet project in Altavista.
(d) Explore with PRI the possibility to supply CANS to replace
4 oz. Pediatric Powder Cans currently packed in 8 oz. metal cans.
(e) Allow PRI to quote on current or new plastic parts as they
are reviewed and/or developed, such as the current ReadiCup Sheet, nipple
rings, Human Milk Fortifier Sheet, and Volufeed projects.
5. TERM AND TERMINATION.
(a) The term of this Agreement shall be from March 1, 1998, for a
period of three (3) years hereof to February 28, 2001.
(b) Either party shall have the right to terminate this Agreement
following sixty (60) days' written notice to the other party of a material
breach of this Agreement by such other party if such breach has not been
remedied within such sixty (60) days.
(c) This Agreement shall terminate at the option of either party
hereto in the event, and at any time, that either party shall (i) become
insolvent within the meaning of any bankruptcy or insolvency laws, (ii) have
a receiver or trustee appointed, or (iii) made an assignment for the benefit
of creditors.
(d) In the event PRI terminates this Agreement pursuant to
Section 5(b), XXXX shall be obligated to pay to PRI an amount equal to the
monthly amortization amount for each piece of equipment listed on EXHIBIT C
from the date of the termination (pro-rated for the first month) through the
remainder of the Term. Monthly payments are due within thirty (30) days
following the end of the month amortized. PRI shall use its best effort to
mitigate such payments by using such equipment in other manufacturing
activities, and payments received by PRI from third parties relating to the
use of such equipment shall offset and be credited against amounts due from
XXXX hereunder. Notwithstanding the foregoing, title to all equipment listed
on EXHIBIT C remains with PRI and XXXX shall have no further liability with
respect to the equipment listed on EXHIBIT C upon expiration of the Term. The
parties further agree that EXHIBIT C hereto may be amended only upon mutual
consent of the parties from time
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(f) Failure to terminate under any of the foregoing grounds or to
exercise any right or remedy hereunder shall not constitute a waiver of the
right to terminate on that or other grounds or to exercise such other right
or remedy in the future.
6. FORECASTS. At the beginning of each calendar month during the term
of this Agreement, XXXX shall provide PRI a three (3) month forecast of XXXX'
non-binding estimated requirements of CANS.
7. QUALITY CONTROL. PRI shall comply with all approved Product
Specifications including FDA good manufacturing practices. Changes to Product
Specifications shall be subject to written agreement between XXXX and PRI.
With regard to its activity under this Agreement, each party shall comply
with all applicable laws, rules and regulations.
8. WARRANTIES AND LIMITATIONS OF DAMAGE.
(a) PRI warrants that all the CANS sold and delivered pursuant to
this Agreement shall conform to specifications agreed to by the parties in
EXHIBIT A, and will be free from defects in workmanship and material when
delivered.
(b) PRI hereby disclaims any and all implied warranties of
mechantability and fitness for a particular purpose.
(c) PRI and XXXX agree that neither XXXX nor PRI shall be
responsible for consequential or incidental damages arising under this
Agreement.
9. INDEMNIFICATION.
(a) XXXX shall indemnify, defend and hold PRI, and its officers,
directors, partners and shareholders, and each of them, harmless from and
against all claims, lawsuits, charges, actions, causes of action,
liabilities, judgments, losses, damages, expenses (including actual
reasonable attorneys' fees and costs) arising from or in connection with
XXXX' handling, transportation or use of the CANS, or the products to be sold
within the CANS, except to the extent arising from PRI's negligence or
willful misconduct or breach of this Agreement.
(b) PRI shall indemnify, defend and hold XXXX, its affiliates,
and their respective officers, directors, partners and shareholders and each
of them, harmless from and against all claims, lawsuits, charges, actions,
causes of action, liabilities, judgments, losses, damages, expenses
(including actual reasonable attorneys' fees and costs) arising from or in
connection with PRI's manufacture of the
5
CANS or breach of this Agreement, except to the extent arising from XXXX'
negligence or willful misconduct or breach of this Agreement.
(c) If the indemnified party expects to seek indemnification
under this Article, it shall promptly give notice to the indemnifying party
of the basis for such claim of indemnification. If indemnification is sought
as a result of any third party claim or suit, such notice to the indemnifying
party shall be within fifteen (15) days after receipt by the indemnified
party of such claim or suit (Xxxxxx Laboratories, Xxx Xxxxxx Xxxx Xxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000-0000, Attention Risk Management, D-317). Each
party shall cooperate fully with the other party in the defense of all such
claims or suits, and no settlement or compromise shall be binding on a party
hereto without its prior written consent.
(d) Section 9 shall survive expiration or termination of this
Agreement.
10. ENTIRE AGREEMENT. This Agreement memorializes and constitutes the
final expression and the complete and exclusive statement between the parties
with respect to the subject matter hereof (except Purchasing Orders for XXXX
tooling when not inconsistent with this Agreement). There are no writings,
conversations, representations, warranties or agreements that the parties
intend to be a part hereof except as expressly set forth in this Agreement.
This Agreement represents the entire agreement between the parties and
supersedes all previous written or oral agreements or discussions between the
parties and any other person or legal entity concerning the transactions
contemplated herein.
11. AMENDMENTS AND WAIVERS. No change in, amendment to, or waiver of
this Agreement, or any part hereof, shall be valid unless in writing and
signed by both parties thereby obligated.
12. NO THIRD PARTY BENEFIT. The parties acknowledge and agree that the
provisions of this Agreement are for the sole benefit of the parties hereto,
and are not for the benefit, directly or indirectly, of any other person or
entity, except for Xxxxxx Laboratories.
13. GOVERNING LAW AND VENUE. The validity of this Agreement and any of
its provisions and conditions, as well as the rights and duties of the
parties, shall be interpreted and construed pursuant to and in accordance
with the internal laws, and not the law of conflicts, of the State of
Illinois. The parties irrevocably submit to the jurisdiction of any Illinois
or United States Federal court sitting in the Northern District of Illinois
for any action filed to enforce, construe or interpret this Agreement. The
parties further waive any objection to venue in such State on the basis of
forum non conveniens.
14. HEADINGS. Section headings have been inserted in this Agreement as a
matter of convenience only; such section headings are not a part of this
Agreement and shall not be used in the interpretation of this Agreement.
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15. SEVERABILITY. If any one or more of the provisions of this Agreement
are held to be invalid, illegal or unenforceable in any respect for any
reason, the validity, legality, and enforceability of any such provision or
provisions in every other respect and of the remaining provisions of this
Agreement shall not be in any way impaired.
16. TIME OF THE ESSENCE. Time is hereby expressly made of the essence
with respect to the performance and satisfaction of each of the provisions
and conditions of this Agreement.
17. GENDER AND NUMBER. Wherever the context so requires, all words used
in the singular shall be construed to include the plural, and vice versa, and
words of any gender shall include any other gender, or any entity.
18. NO ASSIGNMENT. This Agreement shall not be assigned, in whole or in
part, without the express written consent of the parties hereto, provided,
however, that XXXX may assign this Agreement without the consent of PRI to
any wholly owned subsidiary of Xxxxxx Laboratories.
19. NOTICES. No notices, request, demand, instruction or other documents
to be given hereunder to any party shall be effective or any purpose unless
telecopies (with answer back) or personally delivered to the person at the
appropriate address set forth below (in which event, such notice shall be
deemed effective only upon such delivery) or when delivered by mail, sent by
registered or certified mail, return receipt requested or recognized private
mail carrier, as follows:
If to PRI: Packaging Resources Incorporated
One Xxxxxx Park
000 Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxx 00000
ATTN: Xxxxxxx X. Xxxxxx
If to XXXX: XXXX Products Division
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
ATTN: Xxxxx Xxxxxxxxxxxx
And a copy to: Xxxxx Xxxxxx, Division Counsel
XXXX Products Division
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Notice given by mail shall be deemed to have been given ninety-six (96) hours
after deposit of same in any United States Post Office box, postage prepaid,
addressed as set forth above. Notice given via overnight courier shall be
deemed to have been given upon verified delivery by such courier. The
addresses and
7
addressees for the purpose of this section may be changed by giving written
notice of such change in the manner herein provided for giving notice.
20. NON-DISCLOSURE. PRI and XXXX agree not to disclose the existence of
this Agreement or use the name of the other in any publicity or advertising
without the other party's written consent.
21. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided, this
Agreement, and each of its provisions, covenants, and conditions, shall apply
to, bind, and inure to the benefit of the parties and their respective
successors-in-interest, and permitted assigns. No party shall assign this
Agreement in whole or part or subcontract or delegate any of its obligations
hereunder, to any third party without the prior written consent of the other
party: provided however that XXXX shall have the right to assign this
Agreement to a XXXX affiliate without the need for such consent.
22. FURTHER ASSURANCES. Each party shall perform or cause to be
performed any further acts and execute and deliver any documents that may be
reasonably necessary or advisable to carry out the provisions of this
Agreement.
23. EXHIBITS INCORPORATED. All EXHIBITS referred to in this Agreement
are hereby incorporated and made a part of this Agreement except that if
there is any inconsistency between this Agreement and the provisions of any
EXHIBIT, the provisions of this Agreement shall control.
24. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one original document.
25. ALTERNATIVE DISPUTE RESOLUTION. Any controversy or dispute that
arises in connection with this Agreement shall first be presented for
resolution to the respective presidents of the XXXX and PRI. If no resolution
is reached within thirty (30) days thereafter, then such controversy or
dispute shall be resolved by binding Alternative Dispute Resolution in the
manner described in EXHIBIT E, which shall be the sole mechanism and forum
for resolution of such controversy or dispute.
26. YEAR 2000 COMPLIANCE. XXXX expects that all of its suppliers will
be Year 2000 compliant. As such, PRI warrants that all hardware and software
used by it in the manufacture and supply of materials and/or provision of
services hereunder, and in its business relationship with XXXX, shall
(I) have no lesser functionality with respect to records containing dates
before or after January 1, 2000, than previously with respect to dates prior
to January 1, 2000.
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PACKAGING RESOURCES INCORPORATED
a Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Title: V.P. Sales 7/27/98
------------------------------------
XXXX PRODUCTS DIVISION LABORATORIES
XXXXXX LABORATORIES
an Illinois Corporation
By: /s/ Xxxxx Xxxxxxxxxxxx
----------------------------------------
Title: 7/30/98
------------------------------------
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EXHIBIT A-1
[*]
EXHIBIT A-2
---------
PACKAGING
---------
RESOURCES
---------
XXXX SHIPPING SPECIFICATION
REVISION I 106499PA
January 18, 1996
PALLET: 44.0 in. x 56.0 in. Hardwood Xxxxxxxx Pallet (per
specification).
SLIP SHEET: 44.0 in. x 56.0 in. 50 mil (50 point) Chipbaord
slip sheets with rounded or cut corners (per
specification).
PALLET CAP: 44.125 in. x 56.125 in. Plastic Cap. Frame:
(TOP FRAME) (1.0 in. x 3.375 in.) (per specification).
TOP SHROUD: 2 x 275 lb. C-Flute Corrugated - 72.0 in. x 42.0
in. 4 Panel Shroud.
LARGE SIDE PADS: 2 x 275 lb. C-Flute Corrugated - 15.0 in. x 56.0
in. Pad
SMALL SIDE PADS: 2 x 275 lb. C-Flute Corrugated - 15.0 in. x 44.0
in. Pad
STRETCH WRAP: 60 ga. x 20 inch. wide Sigma +4 Grade
BANDING: 0.4375 in. x 0.025 in. Gerrard Machine Grade Black
Polypropylene Strapping (Break strength 500 lbs.)
LABELING: 1 Label must be shown on each of the four sides of
the pallet, plus 1 additional label will be placed
on the top of the pallet (5 total labels per pallet).
Line 5 - White Labels, Line 6 - Blue Label, Line 7 -
Yellow labels.
DESCRIPTION
The cans are automatically palletized onto slip sheets in a staggered/nested
pattern: 358 parts per layer, 27 layers per pallet. Every layer will be on a
slip sheet, with one additional slip sheet placed on the top (27th) layer.
The corrugated shroud halves are tapped at the corners and placed on top of
the top slip sheet. Side pads are taped to the slip sheet above the fifth
layer above the pallet. The pallet cap is placed on top of the top shroud and
the five labels are placed on the sides and top of the pallet. The assembled
pallet is banded in 4 directions and stretch wrapped.
EXHIBIT A-3
---------
PACKAGING
---------
RESOURCES
---------
XXXX SHIPPING SPECIFICATION
REVISION I 106499PA
January 18, 1996
Page 2
XXXX OF MATERIALS
1 Pallet
28 Slip Sheets
2 Corrugated Top Shrouds
2 Large Corrugated Side Panels
2 Small Corrugated Side Panels
1 Pallet Cap/Top Frame
5 Labels
93ft Banding
75ft Stretch Wrap
PART TOTALS
358 Cans/Layer
27 Layers/Pallet
9666 Cans/Pallet
22 Pallets/Truck
212652 Cans/Truck Load
EXHIBIT A-4
[*]
---------
PACKAGING
---------
RESOURCES
---------
EXHIBIT B ISSUED: February 1, 1998
PACKAGING RESOURCES INCORPORATED
Pricing Schedule
EFFECTIVE MARCH 1, 1998
New Contract Pricing
Reflects [*] Price Reduction and New EDI Payment Terms
[*] no longer being deducted from Reserve Fund
SUPERSEDES PRICE CHANGE OF MARCH 13, 1997
XXXX LABORATORIES
-----------------
Ship to: Columbus, Ohio
Casa Grande, Arizona
(#107870)
Columbus $/M Casa Grande $/M
Part Description (Delivered) (Delivered)
POLYPROPYLENE - OPAQUE (C304IHC-OP) (C304IHG-OP)
211 x 8 oz.
Barrier Plastic Can
[*] [*] [*]
Title: FOB Packaging Resources Point of Manufacture
Freight: Packaging Resources Arranges for, Prepays and Absorbs
Terms: 1% Net 5 Days for Columbus and 1% Net 8 Days for Casa Grande
Sale Subject to Credit Approval
Current Resin Escalators/De-escalators
--------------------------------------
Price change for each $0.01/lb change in resin is as follows:
[*] for each $0.01/lb of Exxon 9122
[*] for each $0.01/lb of Exxon 7341
[*] for each $0.01/lb of Evalca 151B
[*] for each $0.01/lb of Evalca 100B
[*] for each $0.01/lb of Adhesive
[*] for each $0.01/lb of Stabilize
[*] for each $0.01/lb of Color Pricing effective only when
*APPROVED* stamp appears above
Tooling
Owned by Xxxx Laboratories. Routine maintenance performed by and paid for by
Packaging Resources. Part replacement after normal life is paid for by Xxxx
per agreement. Includes [*].
---------
PACKAGING
---------
RESOURCES
---------
EXHIBIT B ISSUED: February 1, 1998
PACKAGING RESOURCES INCORPORATED
Pricing Schedule
EFFECTIVE MARCH 1, 1998
New Contract Pricing
Reflect [*] Price Reduction and New EDI Payment Terms
[*] no longer being deducted from Reserve Fund
SUPERSEDES PRICE CHANGE OF MARCH 13, 1997
XXXX LABORATORIES
-----------------
Ship to: Columbus, Ohio
Casa Grande, Arizona
(#107870)
Columbus $/M Casa Grande $/M
Part Description (Delivered) (Delivered)
POLYPROPYLENE - TRANSLUCENT (C304IHC-TR) (C304IHG-TR)
211 x 8 oz.
Barrier Plastic Can
[*] [*] [*]
Title: FOB Packaging Resources Point of Manufacture
Freight: Packaging Resources Arranges for, Prepays and Absorbs
Terms: 1% Net 5 Days for Columbus and 1% Net 8 Days for Casa Grande
Sale Subject to Credit Approval
Current Resin Escalators/De-escalators
--------------------------------------
Price change for each $0.01/lb change in resin is as follows:
[*] for each $0.01/lb of Exxon 9122
[*] for each $0.01/lb of Exxon 7341
[*] for each $0.01/lb of Evalca 151B
[*] for each $0.01/lb of Evalca 100B
[*] for each $0.01/lb of Adhesive
[*] for each $0.01/lb of Stabilize
[*] for each $0.01/lb of Color Pricing effective only when
*APPROVED* stamp appears above
Tooling
Owned by Xxxx Laboratories. Routine maintenance performed by and paid for by
Packaging Resources. Part replacement after normal life is paid for by Xxxx
per agreement. Includes [*].
March 1, 1998
EXHIBIT C
XXXX LABORATORIES
CANS SUPPLY AGREEMENT
Unamortized Capital
Investment
-------------------
(As of 2/28/98)
Line 1 Complete Thermoforming Line [*]
Including:
Amortization
------------
Co-Extrusion Sheetline [*]
Thermoformer
Trim Press
Chillers
Monitoring System
Dryers
Granulator
Conveyer System
Vision System
Palletizer
Line 2 Complete Thermoforming Line [*]
Including:
Amortization
------------
Co-Extrusion Sheetline [*]
Thermoformer
Trim Press
Chillers
Monitoring System
Dryers
Granulator
Conveyer System
Vision System
Palletizer
Line 3 Complete Thermoforming Line [*]
Including:
Amortization
------------
Co-Extrusion Sheetline [*]
Thermoformer
Trim Press
Chillers
Monitoring System
Dryers
Granulator
Conveyer System
Vision System
Palletizer
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EXHIBIT E
ALTERNATIVE DISPUTE RESOLUTION
The parties recognize that a bona fide dispute as to certain matters may
arise from time to time during the term of this Agreement which relates to
either party's rights and/or obligations. To have such a dispute resolved by
this Alternative Dispute Resolution ("ADR") provision, a party first must
send written notice of the dispute to the other party for attempted
resolution by good faith negotiations between their respective presidents (or
their equivalents) of the affected subsidiaries, divisions, or business units
within twenty-eight (28) days after such notice is received (all references
to "days" is to calendar days).
Any negotiations regarding a dispute shall be treated as settlement
negotiations for purposes of the Federal Rules of Evidence and any similar
state rules of evidence. Such negotiations shall not be admissible in any
subsequent ADR hearing.
If the matter has not be resolved within twenty-eight (28) days of the notice
of dispute, or if the parties fail to meet within such twenty-eight (28)
days, either party may initiate an ADR proceeding as provided herein. The
parties shall have the right to be represented by counsel in such a
proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the
other party of the issues to be resolved by ADR. Within fourteen (14) days
after its receipt of such notice, the other party may, by written notice to
the party initiating the ADR, add additional issues to be resolved within the
same ADR.
2. Within twenty-one (21) days following receipt of the original ADR notice,
the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are unable
to agree on a mutually acceptable neutral within such period, the parties
shall request the President of the Center for Public Resources ("CPR"), 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 to select a neutral pursuant to the
following procedures:
(a) the CPR shall submit to the parties a list of not less than five (5)
candidates within fourteen (14) days after receipt of the request from the
parties, along with a CURRICULUM VITAE for each candidate. No candidate shall
be an employee, director, or shareholder of either party or any of their
subsidiaries or affiliates. Such list shall include a statement of disclosure
by each candidate of any circumstances likely to affect his or her
impartiality.
(b) Each party shall number the candidates in order of preference (with
the number one (1) signifying the greatest preference) and shall deliver the
list to the CPR within seven (7) days following receipt of the list of
candidates. If a party believes a conflict of interest exists regarding any
of the candidates, that party shall provide a written explanation of the
conflict to the CPR along with its list showing its order of preference for
the candidates. Any party failing to return a list of preferences on time
shall be deemed to have no order of preference.
(c) If the parties collectively have identified fewer than three (3)
candidates deemed to have
conflicts, the CPR immediately shall designate as the neutral the
candidate for whom the parties collectively have indicated the greatest
preference. If a tie should result between two candidates, the CPR may designate
either candidate. If the parties collectively have identified three (3) or
more candidates deemed to have conflicts, the CPR shall review the
explanations regarding conflicts and, in its sole discretion, may either
(i) immediately designate as the neutral the candidate for whom the parties
collectively have indicated the greatest preference, or (ii) issue a new list
of not less than five (5) candidates, in which case the procedures set forth
in subparagraphs 2(a)-2(c) shall be repeated.
3. No earlier than twenty-eight (28) days or later than fifty-six (56) days
after selection, the neutral shall hold a hearing to resolve each of the
issues identified by the parties. The ADR proceeding shall take place at a
location agreed upon by the parties. If the parties cannot agree, the neutral
shall designate a location other than the principal place of business of
either party or any of their subsidiaries or affiliates.
4. At least seven (7) days prior to the hearing, each party shall submit the
following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely in any
oral or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the hearing,
and a short summary of the anticipated testimony of each witness;
(c) a proposed ruling on each issue to be resolved, together with a
request for a specific damage award or other remedy for each issue. The
proposed rulings and remedies shall not contain any recitation of the facts
or any legal arguments and shall not exceed one (1) page per issue.
(d) a brief support of such party's proposed rulings and remedies,
provided that the brief shall not exceed twenty (20) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
Except as expressly set forth in subparagraphs 4(a)-4(d), no discovery shall
be required or permitted by any means, including depositions,
interrogatories, requests for admissions, or production of documents.
5. The hearing shall be conducted on two (2) consecutive days and shall be
governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each party has had the
five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing statement.
Cross-examination of witnesses shall occur immediately after their direct
testimony, and cross-examination time shall be charged against the party
conducting the cross-examination.
(c) The party initiating the ADR shall begin the hearing and, if it
chooses to make an opening
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statement, shall address not only issues it raised but also any issues raised
by the responding party. The responding party, if it chooses to make an
opening statement, also shall address all issues raised in the ADR.
Thereafter, the presentation of regular and rebuttal testimony and documents,
other evidence, and closing arguments shall proceed in the same sequence.
Except when testifying, witnesses shall be excluded from the hearing until
closing arguments.
(d) Settlement negotiations shall not be admissible under any
circumstances. Affidavits prepared for purposes of the ADR hearing also
shall not be admissible. As to all other matters, the neutral shall have sole
discretion regarding the admissibility of any evidence.
6. Within seven (7) days following completion of the hearing, each party may
submit to the other party and the neural a post-hearing brief in support of
its proposed rulings and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed ten (10) pages. This
page limitation shall apply regardless of the number of issues raised in the
ADR proceeding.
7. The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its entirety
the proposed ruling and remedy of one of the parties on each disputed issue
but may adopt one party's proposed rulings and remedies on some issues and
the other party's proposed rulings and remedies on other issues. The neutral
shall not issue any written opinion or otherwise explain the basis of the
ruling.
8. The neutral shall be paid a reasonable free plus expenses. These fees
and expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the fees
and expenses of a court reporter, and any expenses for a hearing room, shall
be paid as follows:
(a) If the neutral rules in favor of one party on all disputed issues in
the ADR, the losing party shall pay one hundred percent (100%) of such fees
and expenses.
(b) If the neutral rules in favor of one party on some issues and the
other party on other issues, the neutral shall issue with the rulings a
written determination as to how such fees and expenses shall be allocated
between the parties. The neutral shall allocate fees and expenses in way
that bears a reasonable relationship to the outcome of the ADR, with the
party prevailing on more issues, or on issues of greater value or gravity,
recovering a relatively larger share of its legal fees and expenses.
9. The rulings of the neutral and allocation of fees and expenses shall be
binding, non-reviewable, and non-appealable, and may be entered as a final
judgment in any court having jurisdiction.
10. Except as provide in paragraph 9 or as required by law, the existence of
the dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings, and briefs), and the
rulings shall be deemed Confidential Information. The neutral shall have the
authority to impose sanctions for unauthorized disclosure of Confidential
Information.
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