Exhibit 10.22
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Note: The information designated by a bracketed asterisk [*] has been
omitted pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission.
BASESTOCK SUPPLY AGREEMENT
This agreement is entered into June 27, 2001 between APPLETON PAPERS
INC., a Delaware Corporation with business offices at 000 X. Xxxxxxxxx
Xxxxxx, X.X. Xxx 000, Xxxxxxxx, XX 00000-0000 ("Buyer") and APPLETON
COATED LLC, a Delaware limited liability company with offices at 000
Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxxx, XX 00000 ("Seller").
1. VOLUME: Buyer shall be obligated to purchase from Seller, and
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Seller shall be obligated to sell to Buyer, not less than 67,500
tons (2,000 lbs/ton) in 2002 and 27,000 tons in 2003.
Buyer has the ability to purchase up to 10% additional volume per
calendar quarter from Seller, given a 3-month notice to Seller.
Seller will provide any additional tonnage at the same terms as
stated in this agreement.
Additionally, Buyer agrees to purchase product (on or before March
31 of the Agreement year in question), per section 7 below,
required to bring the consignment inventory down to a maximum of
6,750 tons in 2002 and 2,700 tons in 2003. Any reduction in
consignment inventory below these levels is included in Buyer's
annual purchase commitment.
Buyer will purchase the obligatory volume utilizing a level load
order pattern of equal monthly volumes unless mutually agreed to
by Buyer and Seller otherwise.
2. VOLUME PER PAPER MACHINE: Buyer and Seller agree that the products
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shall be produced only on paper machines on which they are
currently qualified (per current specifications), unless mutually
agreed upon by both Buyer and Seller. Buyer and Seller agree that
grades currently on PM6 can be developed to be produced on PM7 at
Seller's expense related to Seller's costs and Buyer's costs
associated with this development (See May 8, 2001, Process Change
and Development Costs memo attached as Schedule 6), in order to
provide additional flexibility for Seller.
3. GRADE MIX: Buyer and Seller agree that Buyer will provide the
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estimated Agreement year grade mix by October 1, of the prior
year. For production planning purposes, Buyer will publish, once
per month, a three (3) month rolling forecast to indicate
approximate grade mix by paper machine. All grades
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represented in Schedule 2 are considered qualified grades for purposes
of meeting the minimum and maximum volume requirements under this
Agreement.
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4. PAYMENT TERMS: Terms are 2% discount within 3 Days via Electronic
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Fund Transfer to Seller's Financial Institution (if capable), or
if not capable, 1% discount within 20 days from date of invoice,
net 30 days. Except as provided in Section 7 hereof, title
transfers at time of shipment if direct, or at time of release
from consignment inventory.
5. FREIGHT: Prices as stated in Schedule 2, are on a delivered basis
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and include freight as described below:
1. Seller will pay freight cost to deliver basestock to the
Buyer's Facility, in the Fox Valley, or designated
warehouse/distribution center in the Fox Valley area as
designated at time of shipment from the Seller's
facility.
2. Buyer will provide partial transportation service, as
available, to Seller utilizing Buyer's trucking fleet.
Seller will provide a freight allowance of $2.35 per ton
to Buyer, for all loads transferred by Buyer, to Buyer's
Facility or designated warehouse / distribution center
in the Fox Valley area. Title and Risk of loss will
transfer at time of shipment if direct, or if under
consignment at time of release from consignment.
Notification to Buyer of load availability, will be via
email or other mutually agreed process, from Seller to
Buyer. Buyer's trailers will be made available for
staging at Seller's mill. Loads not picked up on time (2
hour window from the time of load availability
notification) will be sent "best way".
6. TERM AND EXTENSION: Except as otherwise provided in this
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Agreement, this Agreement is effective as of December 30, 2001 and
extends for two years until December 29, 2003. After the initial
term and by mutual agreement by both Buyer and Seller, this
agreement may be extended for additional succeeding one (1) year
terms. For any additional term, volume, grade mix, and pricing
requirements will be established and agreed to in writing by both
Buyer and Seller, no later than October 1 of the preceding year.
7. SERVICE: Seller agrees to maintain a consignment inventory of
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product. Seller will maintain as Seller's inventory a maximum of
6,750 tons in 2002 and 2,700 tons in 2003. Buyer/Seller agree,
that as a result of year to year volume changes, the consignment
inventory maximum will be either increased or decreased in volume
by March 31, of the Agreement year. The purchased volume
commitment made by Buyer is in addition to the change related to
maintaining consignment inventory. Reduction of the consignment
inventory below the maximum is included in the annual volume
commitment and not in addition to it. Seller agrees to utilize
Buyer's leased warehouse space on Radio Road or other mutually
agreed upon site. Seller also agrees to be responsible for the
monthly
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warehouse rent for the space utilized to manage this consignment
inventory process at a cost not to exceed Buyer's leased space
rate. Product within this inventory will be purchased by and title
transferred to Buyer, either when used, or, if not used, upon
reaching 90 days in the consignment inventory.
8. ORDER MINIMUMS: Buyer and Seller agree to 24 hour minimum run
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sizes for those products listed in Table I, in the attached
Schedule 1. Buyer and Seller agree to 12-hour minimum run sizes
for those products listed in Table II, in the attached Schedule 1.
These minimums are applicable on orders placed by Buyer, but
Seller can over/under produce by 5% of the ordered quantity. Any
additional over production will be carried in Seller's inventory
and will not be included in the consignment inventory, unless
mutually agreed upon by Buyer.
9. TRIM: Trim cost adjustments will be completed annually. A trim
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penalty/ credit will apply if the average trim width for a given
grade on a given paper machine is less than (penalty) or greater
than (credit) the prior year. The trim cost penalty/credit will
apply to all tons for the affected grade(s). Seller will notify in
writing to Buyer, the prior year average trims by March 1, of the
Agreement year. Seller will send quarterly year-to-date trim
updates by grade and paper machine to Buyer. Seller will notify in
writing to Buyer, the Agreement year actual average trims and
associated penalty or credit to Buyer by January 31, of the
subsequent year. Buyer/Seller agree to review and make
penalty/credit payment to Seller/Buyer by March 1, of the
subsequent year. The trim penalty/credit will be calculated by
grade and by paper machine using the following formula:
$/ton/inch Trim Penalty/Credit =
(1 / Agreement yr. ave. trim) X $/lb. PM Burden rate) + ((1-$/lb.
Winder yield) X (1/Agreement yr. ave. trim) X ($/lb. Scrap + $/lb.
Material)) X 2000 lb./ton
Trim Penalty / Credit = ((Prior yr. ave. trim - Agreement yr. ave,
trim) X $/ton/inch penalty/credit X (Agreement yr. tons / 2000))
Disagreements will be submitted to an independent auditor, the
cost of which will be mutually shared.
10. PRICING: Pricing is per the agreed Schedule 2 attachment. All
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prices are delivered and firm for 2002. For 2003, prices will be
subject to adjustment as follows, based upon the Resource
Information System, Inc. (RISI) average transaction price for
Northern Bleached Softwood Kraft Pulp (NBSK) delivered to the
United States as published in the RISI World Pulp Monthly Report:
A. INCREASE: If the RISI average transaction price for Northern
Bleached Softwood Kraft Pulp (NBSK) delivered to the United
States as published in the RISI World Pulp Monthly Report,
exceeds $630 per metric tonne for the most recent previous
calendar quarter, then the price of basestock set forth in
Schedule 2 for the ensuing quarter will be adjusted upwards by
50% of the
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difference between the previous calendar quarter average RISI
NBSK price per tonne and $630.
. Example: Quarter 4 2002 average RISI NBSK price equals $600,
then there is no price increase, as this is below $630.
. Example: Quarter 1 2003 average RISI price equals
$660/tonne, then there will be a $15/tonne ($13.64/ton)
price increase on all tonnes purchased in the second quarter
of 2003. If Quarter 2 2003 average RISI price were to then
rise to $670/tonne, then there would be an additional
$5/tonne price increase on all tonnes purchased in the third
quarter of 2003 ($20/tonne total price increase as compared
to Schedule 2 pricing).
B. DECREASE: If the RISI average transaction price for Northern
Bleached Softwood Kraft Pulp (NBSK) delivered to the United
States as published in the RISI World Pulp Monthly Report is
less than $570 per metric tonne for the most recent previous
calendar quarter, then the price of basestock set forth in
Schedule 2 for the ensuing quarter will be decreased by 50% of
the difference between $570 and the RISI average transaction
price for the previous calendar quarter.
. Example: The average price of NBSK for Q1 2003 is $540. A
price reduction applied to basestock purchases in the second
quarter would be equal to $15 per tonne ($13.64 per ton). If
the average price of NBSK for Q2 2003 were to fall to $530,
there would be an additional $5/tonne price decrease for the
third quarter ($20/tonne total price increase as compared to
Schedule 2 pricing).
C. NO CHANGE: If the average transaction price for NBSK is between
$630 and $570, there is no change to the selling price of
basestock for that ensuing quarter.
Price adjustments will be made quarterly for the period December
30, 2002 through December 29, 2003.
Notwithstanding the price adjustment formula described above,
under no circumstances shall 2003 prices result in an increase or
decrease of 2002 prices of more than [*]% as set forth in Schedule
3.
Because the RISI data for the previous quarter may not be
available at the beginning of the respective quarter of price
adjustment, retroactive adjustment to amounts invoiced or paid
during the adjustment period until the data is available will be
made.
11. CONTINUOUS COST REDUCTION (CCR): Buyer and Seller mutually agree
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that continuous cost reduction is important. Buyer and Seller
agree to enter into a trial program as described below, for a
6-month period, (July1, 2001 through December 31, 2001), wherein
data will be gathered and understood with no actual penalties or
bonuses incurred. Following the 6 months of this
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trial/monitoring period, Buyer and Seller will mutually agree to
targets and parameters of a CCR (continuous cost reduction)
program to be put in place for the duration of the agreement. A
key cost factor for Buyer, which is subject, in part, to product
quality, is coater runnability as measured by web breaks per one
hundred rolls run. Buyer records and maintains Seller Related
Coater Web Breaks per Hundred (BPH) historical and current records
by grade and coater. An increase or decrease in the BPH, directly
relates to financial losses or gains by the Buyer. As a means to
emphasize the need for the Seller and Buyer to jointly focus on
the reduction of lost time and profitability to the Buyer, a CCR
gain/loss-sharing program is described in the attached Schedule 4.
The CCR shall be used only on grades with basis weights below 40#
that are listed in Table 1 of Schedule 1. For each successive year
the BPH targets are adjusted to provide year on year improvements
and are based on the average vendor BPH for all suppliers of that
basis weight range. CCR penalties and/or bonuses to Seller would
be calculated annually by Buyer per Schedule 4 Tables and a
written notification of penalty / bonus amount will be provided to
Seller by January 31, of the subsequent year. Buyer/Seller would
agree to make bonus/penalty payment to Seller/Buyer by March 1, of
the subsequent year.
12. QUALITY: All products shall meet or exceed the quality
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specifications as described in Buyer's basestock/CF specification,
including the basestock finishing specifications in effect on the
date first above written, as set forth in Schedule 7. Buyer will
continue to have the sole option to reject any product that does
not meet the agreed specifications in any material respect. Seller
will remove any products that fail to conform to the
specifications (rejected products), at Seller's own expense,
within 14 days of receiving notice of the alleged problem and a
description, in reasonable detail, of Buyer's efforts to rectify
same. Seller will work with Buyer to promptly replace rejected
products, or if such products cannot be replaced promptly, Seller
shall provide a fair credit allowance for any nonconforming
product. Any and all major process changes contemplated by Seller
must be communicated in writing and discussed with Buyer prior to
implementation of the process change. All trial expenses related
to Seller initiated process changes will be borne by Seller. All
rejection costs related to Seller initiated process changes will
be borne by Seller.
13. INTERFACES: Issues related to Pricing, Agreement Terms, and
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Overall Service Issues will be coordinated by Buyer's - HQ
Procurement Specialist (currently Xx Xxxxxxx) and Seller's
Logistics Director (currently Xxx Regal). Issues related to Volume
Projections, Order Entry, and Inventory Control Levels will be
coordinated by Buyer's HQ MP&L Mgr(s). (currently Xxx
Xxxxxxxxxxxx/Xxxxx Xxxxxxxxx) and Seller's Logistics Director
(currently Xxx Regal). Quality conformance and rejection process,
including Supplier Report Card Process will be handled by the
Buyer's Plant Quality Dept. (currently Xxxx Xxxxxx) and the
Seller's Director of Papermaking Operations (currently Xxxx Xxxx)
and Seller's Technical Process Engineer (currently Xxxx Xxxxx).
The Supplier Report
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Card process will continue and all parties will work effectively to
continuously improve Seller's Quality and Service performance.
14. PRODUCT DEVELOPMENT: If a qualified grade requires modifications or a
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new grade is required by Buyer to replace an existing grade under this
Agreement, Buyer will provide written product specifications and cost
expectations to Seller. Agreement on specifications and costs will be
mutually agreed to in writing prior to approval of the trial request
and manufacturing effort. For modifications to the finished product
specifications initiated by Seller, all requests will be made in
writing to Buyer. Approval is at Buyer's sole discretion and will be
given in writing. Seller will be given first priority to develop any
new products, which will potentially replace or obsolete any products,
which it currently manufactures. Seller will need to meet or exceed
competitive supplier offers for improved technology, which results in
a product design change, if presented in writing by Buyer to Seller.
Seller will have 30 days to respond to this request, in writing and
meet these competitive offers. If Seller wishes to meet the
competitive technology, Seller will have 90 days, after the written
response, in order to run trials and verify Seller's ability to meet
these requirements. During these 90 days, Buyer has the right to
purchase from competitors the improved technology product. If after
the 90 days, Seller is unable to meet the competitor's improved
technology; Seller will release this grade from the agreement and its
associated remaining volume commitment. If after the 90 days, Seller
is able to meet the competitor's improved technology, Buyer shall
remain obligated for its remaining volume commitment (reduced
accordingly for purchases from competitor during prior 90 days).
15. ASSIGNABILITY: This Agreement shall not be assigned by either party
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without the prior written consent of the other except that either
party may assign its rights and obligations hereunder to a successor
or affiliated corporation or to another party purchasing essentially
all of the business or assets of said party to which this Agreement
relates.
If during the term of this Agreement, either party is purchased in its
entirety by another party, the purchasing party must agree to maintain
this Agreement until completion of the current Agreement term.
16. CONFIDENTIALITY: Both parties agree to abide by the attached
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Confidentiality Agreement in Schedule 5.
17. EXECUTION: Both the Buyer and Seller cause this Agreement in its
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entirety, including Schedules 1 through 7, to be executed in duplicate
by their respective authorized representatives effective as of the
day, month, and year first herein written.
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18. WARRANTIES AND REMEDIES: Seller warrants that Products delivered
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hereunder will, in all material respects, conform to the quality
specifications set forth in Section 12 of the Agreement, and that it
shall deliver good and clear title to the Products.
EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE FOREGOING SHALL BE
SELLER'S SOLE WARRANTY WITH RESPECT TO THE PRODUCTS SUPPLIED
HEREUNDER. SELLER MAKES NO OTHER WARRANTY OF ANY KIND WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE.
SELLER'S SOLE LIABILITY AND BUYER'S SOLE REMEDY FOR NONCONFORMING
PRODUCT, WHETHER BASED UPON NEGLIGENCE, STRICT LIABILITY, BREACH OF
CONTRACT, OR ANY OTHER THEORY OF RECOVERY, SHALL BE LIMITED TO THE
REMEDIES PROVIDED IN SECTION 12 OF THE AGREEMENT. SELLER SHALL NOT, IN
ANY CASE, BE LIABLE FOR (i) SPECIAL, INDIRECT, OR CONSEQUENTIAL
DAMAGES, INCLUDING CLAIMS FOR LOST PROFITS OR LOST BUSINESS
OPPORTUNITIES, DOWNTIME OR CLAIMS BY BUYER'S CUSTOMERS OR (ii) DAMAGES
FOR BODILY INJURY OR PROPERTY DAMAGE. ANY REPRESENTATIONS OR
WARRANTIES MADE BY ANY PERSON, INCLUDING EMPLOYEES OR REPRESENTATIVES
OF SELLER, WHICH ARE INCONSISTENT HEREWITH, SHALL NOT BE BINDING UPON
SELLER.
19. MUTUAL INDEMNIFICATION: Except as otherwise provided in this
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Agreement, each party shall indemnify, defend and hold the other party
harmless from any and all actions, suits, claims, judgments,
penalties, damages, losses or other expenses (including reasonable
attorneys' fees and other professionals' fees) to the extent arising
from or relating to the negligence or willful misconduct of, or breach
of this Agreement by, the indemnifying party.
In the event of any claim for indemnification under this Agreement,
the party seeking indemnification (the "Claimant") shall promptly give
notice to the other party (the "Indemnifying Party") of its claim for
indemnification. In no event, however, shall any failure by the
Claimant to give such prompt notice relieve the Indemnifying Party of
its indemnification obligations unless the Indemnifying Party is
materially prejudiced by such failure.
The Indemnifying Party will have the right at any time, by notice to
the Claimant, to assume control of the defense of any third-party
claim with counsel of its choice, which counsel must be reasonably
acceptable to the Claimant. If the Indemnifying Party assumes control
of, and diligently proceeds with, the defense of any third-party
claim, the Claimant shall: (i) reasonably cooperate with the
Indemnifying Party; (ii) have the right to participate in the defense
at its own
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expense; (iii) not admit any liability with respect to, or settle,
compromise or discharge, the third-party claim without the
Indemnifying Party's prior written consent; and (iv) agree to any
settlement, compromise or discharge of the third-party claim which the
Indemnifying Party may recommend and which releases the Claimant
completely from such claim.
If the Indemnifying Party does not assume control of, or diligently
proceed with, the defense of the third-party claim, the Indemnifying
Party shall be bound by the results obtained by the Claimant with
respect to the claim.
20. DELAYED PERFORMANCE: Neither party shall be liable for a failure to
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perform under this Agreement for any cause beyond such party's
reasonable control, which may include acts of God, acts of a public
enemy, acts of Governments of any state or political subdivision or
any department or regulatory agency thereof or entity created thereby,
quotas, embargoes, acts of any person engaged in subversive activity
or sabotage, fires, floods, explosions, or other catastrophes,
epidemics, or quarantine restrictions, strikes or other labor
stoppages, slowdowns or disputes. Each party shall: (a) promptly
notify the other of any such event or threatened event; and (b) use
due diligence and all reasonable efforts to cure any such cause
preventing or threatening to prevent its performance and to resume
performance.
21. DEFAULT: In the event either party should be in default in the
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performance of any of its material duties or obligations under this
Agreement, the other party may give notice to the defaulting party
specifying the term or condition which is alleged as the basis of the
default. If the defaulting Party does not proceed with due diligence
to cure the default or does not correct or cure the noticed default
within twenty (20) days after such notice, then this Agreement may be
terminated by the non-defaulting party by giving written notice of
termination to the defaulting party; said termination to be without
prejudice to any rights or remedies, legal, equitable, or otherwise,
available to the terminating party including such rights and remedies
as shall from time-to-time be afforded by the Uniform Commercial Code.
Any provision of this Agreement to the contrary notwithstanding, if,
at any time during the term of this Agreement, Seller or Buyer is
adjudicated bankrupt; or a petition for voluntary or involuntary
bankruptcy is filed by or against Seller or Buyer; or Seller or Buyer
shall petition for relief from its creditors under the Bankruptcy Act,
or similar act, as from time to time amended; or Seller or Buyer shall
make a general assignment for the benefit of creditors or consent to
the appointment of a receiver for a substantial part of its property;
or if an order or decree is entered by any court of competent
jurisdiction appointing a receiver for Seller or Buyer or for a
substantial part of their property either with or without their
consent, and such receiver is not removed or discharged within sixty
(60) days from the date of said appointment; or if in any judicial
proceeding a substantial part of the property of Seller or Buyer shall
be attached or seized under
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any legal process and shall not be released or discharged therefrom by
the furnishing of security or otherwise within sixty (60) days
thereafter, then, upon the occurrence of any such events applicable to
Buyer, Seller may, at its option, declare Buyer to be in breach
hereof, terminate this Agreement, refuse to make any further
deliveries hereunder and declare the obligations of Buyer for all
Product theretofore furnished immediately due and payable; and upon
the occurrence of any such events applicable to Seller, Buyer may, at
its option, declare Seller to be in breach hereof, terminate this
Agreement, refuse to make any further purchases hereunder and
terminate all of Buyer's obligations to Seller. The exercise of the
rights provided in this Section 21 shall be without prejudice to any
legal rights or remedies otherwise available to the terminating party.
22. NOTICES: Notice required or given under the terms of this Agreement
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shall be deemed to have been duly given and received upon personal
delivery or three days following its deposit in the United States
mail, first class postage prepaid and duly addressed as follows:
To Seller: To Buyer:
Appleton Coated LLC Appleton Papers Inc
Attn: Chief Financial Officer Attn: Vice President Procurement
000 Xxxxxxxx Xxxxxx 000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000 X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
FAX: 000-000-0000 FAX: 000-000-0000
Provided, however, that in the case of mailing that a copy of such
notice shall, on the date of mailing, also be sent by facsimile
transmission to the facsimile number, if any, designated by the other
party. By written notice, either party may change the name, address or
facsimile number to which the other party is to send notices.
23. APPLICABLE LAW: This Agreement shall be governed by, and interpreted
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and enforced according to, the internal laws (without regard to
conflict of laws principles) of the State of Wisconsin.
24. SEVERABILITY: If any provision of this Agreement, or the application
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of it to any person or circumstance, shall be held to be invalid or
unenforceable, the remainder of this Agreement or the application of
such term, covenant, condition or provision to any other person or any
other circumstance (other than those as to which it shall be invalid
or unenforceable) shall not be affected, and each provision shall
remain valid and enforceable to the fullest extent permitted by law.
25. ASSURANCES: The parties agree to cooperate with each other and to
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execute and deliver such documents and to take such further actions as
may be reasonably necessary to carry out the intent of this Agreement.
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26. WAIVER: No delay or failure of any party to enforce any right, power
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or remedy under this Agreement shall operate as a waiver of such
right, power or remedy. Nor shall any single or partial exercise of
any right, power or remedy by a party preclude any other or further
exercise of the same or the exercise of any other right, power or
remedy. Any waiver of any provision of this Agreement must be in
writing and signed by the party against whom the waiver is sought to
be enforced.
27. ENTIRE AGREEMENT: This Agreement, including the attached Schedules 1
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through 7, contains the entire understanding between Seller and Buyer
with respect to the subject matter of this Agreement. This Agreement
supercedes all other prior agreements, oral and written, between the
parties with respect to the subject matter of this Agreement,
including that certain Memorandum of Agreement dated May 24, 2001.
This Agreement shall not be modified or amended except by a written
agreement executed by both parties.
28. SURVIVAL: The provisions of Sections 16, 18 and 19 shall survive the
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expiration or earlier termination of this Agreement.
29. RELATIONSHIPS: The parties are, and only shall represent themselves to
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be, independent contractors. Neither party has authority to create any
obligation on the part of the other party or to bind the other party.
30. PATENT RIGHTS OR LICENSES: No patent rights or licenses from either
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party to the other shall be granted or implied by this Agreement.
APPLETON PAPERS INC. APPLETON COATED LLC
SIGNATURE: /s/ Xxx X. Xxxxxx /s/ Xxxxxxx X. Van Eych
TITLE: VP-Logistics CEO
DATE: June 27, 2001 June 29, 2001
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SCHEDULE 1
2002-2003
API/AC BASESTOCK SUPPLY AGREEMENT
PRODUCT SERVICE TABLES
QUALIFIED
TABLE I: P.M.(s)
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31.1# WH THERMAL FAX BASE 7
43.3# WHITE LABEL BASE 7
TABLE II:
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26.2# WH ST BASE 5&6
26.2# WH RST BASE 5&6
26.2# XX XX XXXX 0&0
00.0# XX XX BASE 5&6
33# WH ST BASE 5&6
39.5# WH ST BASE 5&6
26.25# WH HBT XXXXX XXXX 0
00.0# XX & XX SUPERIOR BASE 6&7
27.8# WH SCCB BASE 7
28.3# WH ULTIMARK BASE 7
30.2# WH CN & PK PC PREM BASE 6&7
34# XX XXX CTG BASE 7
46.5# XX XXX XXXX 0
00.0# XX XXX XXXX 7
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SCHEDULE 2
2002
APPLETON COATED SUPPLIED BASESTOCK
PRICE LIST
(ALL PRICES INCLUDE FREIGHT TO DESTINATION IN THE FOX VALLEY
DESIGNATED AT TIME OF SHIPMENT)
MM# GRADE 2002 PRICE/TON
--- ----- --------------
[*] [*] [*]
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SCHEDULE 3
APPLETON COATED SUPPLIED BASESTOCK
2003 MINIMUM AND MAXIMUM PRICES
(ALL PRICES ARE DELIVERED AND INCLUDE FREIGHT TO FINAL DESTINATION IN THE
FOX VALLEY DESIGNATED AT TIME OF SHIPMENT)
2003 Minimum 2002 2003 Maximum
MM# GRADE PRICE/TON PRICE/TON PRICE/TON
--- ----- --------- --------- ---------
[*] [*] [*] [*] [*]
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SCHEDULE 4
CONTINUOUS COST REDUCTION TABLES - EXAMPLE
TABLE TARGET
GRADE USED SCHEDULE BPH
----- ---- -------- ---
31.1# FAX BS 30.0#-39.9# Therm 4A 1.25
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SCHEDULE 4A
BASESTOCK RUNNABILITY
CONTINUOUS COST IMPROVEMENT
CONTRACT PROPOSAL
[*]
BREAKS PER NO. OF TOTAL COST PER TOTAL ANNUAL ANNUAL
HUNDRED ROLLS BREAKS BREAK COST SAVINGS/LOSS BONUS/PENALTY
------- ----- ------ ----- ---- ------------ -------------
[*] [*] [*] [*] [*] [*] [*]
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SCHEDULE 5
Confidentiality Agreement
This Agreement, effective as of April 15, 2001, between Appleton Papers
Inc., a corporation having its principal offices at 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxx 00000 (hereinafter referred to as "APPLETON"), and Appleton
Coated LLC, having an office at 000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx 00000
(hereinafter referred to as "Vendor");
WHEREAS, APPLETON possesses trade secret information related to
processes, machines and formulations for the manufacture of coated papers,
including formulations for carbonless and thermally imaged papers;
WHEREAS, Vendor possesses trade secret information related to
processes, machines and formulations for the manufacture of coated papers,
including formulations for carbonless and thermally imaged papers;
WHEREAS, the parties are interested in exchanging certain of the above
information for the purpose of Vendor supplying basestock to Appleton, relating
to, or useful to Appleton in its business of paper coating (hereinafter referred
to as "Goods");
NOW, THEREFORE, in consideration of the disclosures to be made and
mutual covenants contained herein, each party agrees as follows:
Each party hereto shall keep confidential the information it receives
from the other and shall neither disclose to any third party nor use such
information for any purpose other than that contemplated under this Agreement.
These obligations shall only apply to information disclosed in writing and
designated confidential or, if disclosed orally, confirmed in writing and
designated confidential within thirty (30) days of such disclosure. These
obligations shall not apply to any information which:
a. is available to the public or becomes available to the public
through no fault of the receiving party;
b. is available to the receiving party at the time of disclosure, as
shown by prior written records;
c. is disclosed to the receiving party by a third party entitled to
disclose it; or
d. is developed by or for the receiving party independently of the
disclosure hereunder.
The parties will use the same degree of care with respect to their
obligations of nondisclosure as they employ with their own information of a
confidential nature, but in no event less than a reasonable standard of care.
Confidential Page 18
No right or license, express or implied, under any patent is created by
this Agreement or the disclosure of information under this Agreement.
This Agreement to receive information in confidence will terminate five
(5) years from the effective date of this Agreement; however, such termination
shall no relieve either party of any obligations with respect to confidential
information disclosed hereunder prior to termination, which shall continue until
10 years from the date of receipt of the confidential information.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized representative and to become effective as of the
date first above written.
ACCEPTED: ACCEPTED:
APPLETON PAPERS INC. APPLETON COATED LLC
By /s/ Xxxx X. Xxxxxxx By /s/ Xxxxxxx Xxx Xxxx
--------------------------------- --------------------------
(Authorized Representative) (Authorized Representative)
Title Vice President, Procurement Title CEO
------------------------------ -----------------------
Date May 24, 2001 Date May 24, 2001
------------------------------- -----------------------
Confidential Page 19
SCHEDULE 6
000 X. Xxxxxxxxx Xxx.
[LOGO] X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxx
00000-0000
[OBJECT OMITTED]
Date: May 8, 2001
From: Xxxx Xxxxxxx/Xxx Xxxxxx
To: Xxxx Xxx Xxxx
RE: Process Change and Development Costs - (AC/API 2002-03 Agreement
Clarification)
Xxxx,
In Section B of the proposed 2002-03 AC Basestock Supply Agreement, there is a
reference made to the ability of developing grades currently run on #6 P.M. on
#7 P.M. for increased flexibility. API has included in this statement the fact
that these development costs would be at AC's expense. This statement is based
upon these developments being requested by AC, in order to provide AC with this
added flexibility and not required by API. Product Development Expenses will be
incurred as follows:
AC REQUESTED PRODUCT DEVELOPMENT:
All major process changes and/or product development change requested by AC,
solely to the advantage of AC, which based upon API's knowledge of their
business needs, requires development and trial costs will be reviewed by API and
if approved by API, be carried out at AC's expense.
The developmental expenses involved with product, which is not deemed perfect
quality and saleable to an API customer, will include the costs of material and
direct expenses, incurred by API, related to the development costs at API and at
API's Customer evaluations. These costs will be incurred by AC.
The development expenses involved with product, sold to an API customer, will
include those costs in excess of standard production and distribution costs
related to the development costs at API and at API's Customer evaluations, not
to exceed $5,000 per developmental trial. These costs will be incurred by AC.
API REQUESTED PRODUCT DEVELOPMENT:
All major process changes, current product changes, or new product developments
requested by API, will be presented to AC and by mutual agreement approved. The
expenses of API requested process changes or product development changes will be
incurred by API, based o n product costs agreed upon by AC and API prior to the
trials.
Confidential Page 20
SCHEDULE 7
Confidential Page 21
APPLETON PAPERS
BASESTOCK
FINISHING SPECIFICATIONS
------------------------
[LOGO]
REVISED JUNE 22, 2000
[*]
Confidential Page 22
