Document:

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                                                                   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 825 E. Wisconsin
       Avenue, P.O. Box 359, Appleton, WI 54912-0359 ("Buyer") and APPLETON
       COATED LLC, a Delaware limited liability company with offices at 540
       Prospect Street, Combined Locks, WI 54113 ("Seller").

         1.   VOLUME: Buyer shall be obligated to purchase from Seller, and
              ------
              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
              -------------------------
              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
              ----------
              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
              --------------
              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
              --------
              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
              -------------------
              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
              --------
              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
              ---------------
              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
              -----
              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
              --------
              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
              --------------------------------
              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
              --------
              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
              -----------
              Overall Service Issues will be coordinated by Buyer's - HQ
              Procurement Specialist (currently Ed Hammond) and Seller's
              Logistics Director (currently Dan Regal). Issues related to Volume
              Projections, Order Entry, and Inventory Control Levels will be
              coordinated by Buyer's HQ MP&L Mgr(s). (currently Jim
              Splittgerber/Jodie Altobelli) and Seller's Logistics Director
              (currently Dan Regal). Quality conformance and rejection process,
              including Supplier Report Card Process will be handled by the
              Buyer's Plant Quality Dept. (currently Bill Werner) and the
              Seller's Director of Papermaking Operations (currently Mike Rask)
              and Seller's Technical Process Engineer (currently Paul Trelc).
              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
          -------------------
          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
          -------------
          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
          ---------------
          Confidentiality Agreement in Schedule 5.

     17.  EXECUTION: Both the Buyer and Seller cause this Agreement in its
          ---------
          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
          -----------------------
          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
          ----------------------
          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
          -------------------
          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
          -------
          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
          -------
          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
          540 Prospect Street                   825 E. Wisconsin Avenue
          Combined Locks, WI 54113              P.O. Box 359
                                                Appleton, WI  54912-0359
          FAX: 920-687-3475                     FAX: 920-991-7256

          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
          --------------
          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
          ------------
          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
          ----------
          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
          ------
          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
          ----------------
          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
          --------
          expiration or earlier termination of this Agreement.

     29.  RELATIONSHIPS: The parties are, and only shall represent themselves to
          -------------
          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
          -------------------------
          party to the other shall be granted or implied by this Agreement.

                   APPLETON PAPERS INC.                  APPLETON COATED LLC

     SIGNATURE:    /s/ Ann M. Whalen                     /s/ Michael J. 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)
    -------                                   -------

    31.1# WH THERMAL FAX BASE                    7
    43.3# WHITE LABEL BASE                       7

    TABLE II:
    --------

    26.2# WH ST BASE                            5&6
    26.2# WH RST BASE                           5&6
    26.2# CN ST BASE                            5&6
    30.9# WH ST BASE                            5&6
    33# WH ST BASE                              5&6
    39.5# WH ST BASE                            5&6
    26.25# WH HBT HSTRG BASE                     7
    26.8# CN & PK 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# WH OBA CTG BASE                          7
    46.5# WH OBA BASE                            7
    61.1# WH OBA BASE                            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
       ---       -----           ---------        ---------       ---------

       [*]          [*]             [*]              [*]             [*]

Confidential                           Page 14

<PAGE>

                                   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

Confidential                           Page 15

<PAGE>

                                   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
  -------    -----   ------    -----     ----    ------------     -------------

    [*]       [*]     [*]       [*]      [*]         [*]               [*]

Confidential                            Page 17

<PAGE>

                                   SCHEDULE 5

                            Confidentiality Agreement

         This Agreement, effective as of April 15, 2001, between Appleton Papers
Inc., a corporation having its principal offices at 825 East Wisconsin Avenue,
Appleton, Wisconsin 54911 (hereinafter referred to as "APPLETON"), and Appleton
Coated LLC, having an office at 569 Carter Court, Kimberly, Wisconsin 54136
(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

<PAGE>

         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/ Rick J. Fantini                            By  /s/ Michael Van Eyck
  ---------------------------------                   --------------------------
   (Authorized Representative)                       (Authorized Representative)

Title  Vice President, Procurement                 Title  CEO
     ------------------------------                      -----------------------

Date  May 24, 2001                                 Date   May 24, 2001
    -------------------------------                      -----------------------

Confidential                            Page 19

<PAGE>

                                   SCHEDULE 6

                                                           825 E. Wisconsin Ave.
[LOGO]                                                     P.O. Box 359
                                                           Appleton, Wisconsin
                                                           54912-0359
[OBJECT OMITTED]

Date:   May 8, 2001
From:   Rick Fantini/Ann Whalen
To:     Mike Van Eyck

RE:     Process Change and Development Costs - (AC/API 2002-03 Agreement
        Clarification)

Mike,

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

<PAGE>

                                   SCHEDULE 7

Confidential                               Page 21

<PAGE>

                                 APPLETON PAPERS
                                    BASESTOCK
                            FINISHING SPECIFICATIONS
                            ------------------------

                                     [LOGO]

                              REVISED JUNE 22, 2000

                                       [*]

Confidential                                Page 22<PAGE>

Exhibit 10.23

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.

                                SUPPLY AGREEMENT

                                  By and Among

                        ESCO COMPANY LIMITED PARTNERSHIP,

                         MITSUI TOATSU CHEMICALS, INC.,

                            YAMAMOTO CHEMICALS, INC.

                                       and

                              APPLETON PAPERS INC.

                            dated as of July 1, 1997

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             Page
                                                                                                             ----
<S>                                                                                                          <C>
ARTICLE I - DEFINITIONS .................................................................................      2
         1.01.    Definitions ...........................................................................      2

ARTICLE II - PURCHASE AND SALE OF PRODUCTS ..............................................................      6
         2.01.    General ...............................................................................      6
         2.02.    Quantities ............................................................................      6
         2.03.    Purchase Orders .......................................................................      7
         2.04.    Price .................................................................................     11
         2.05.    Price Adjustments .....................................................................     13
         2.06.    Effect of Imports .....................................................................     14

ARTICLE III - PERMITTED PURCHASES .......................................................................     14
         3.01.    Permitted Purchases ...................................................................     14
         3.02.    License ...............................................................................     16
         3.03.    Representation by API .................................................................     18
         3.04.    Right of First Negotiation ............................................................     18

ARTICLE IV - PRODUCT WARRANTIES .........................................................................     19
         4.01.    Product Warranties ....................................................................     19
         4.02.    No Other Warranties ...................................................................     20
         4.03.    Warranty Claims .......................................................................     20

ARTICLE V - DELIVERY AND INSPECTION .....................................................................     20
         5.01.    Transportation ........................................................................     20
         5.02.    Title .................................................................................     20
         5.03.    Inspection ............................................................................     20
         5.04.    Production Methods ....................................................................     21

ARTICLE VI - PAYMENT TERMS ..............................................................................     21
         6.01.    Time of Payment .......................................................................     21
         6.02.    Taxes .................................................................................     22

ARTICLE VII - THE SUPPLIER'S REMEDIES ...................................................................     22
         7.01.    Remedies ..............................................................................     22
         7.02.    Remedies Non-Exclusive ................................................................     26

ARTICLE VIII - API'S REMEDIES ...........................................................................     27
         8.01.    Remedies ..............................................................................     27
         8.02.    Remedies Non-Exclusive ................................................................     28

ARTICLE IX - CREDIT SUPPORT .............................................................................     29
         9.01.    Guarantees by MTC and YK ..............................................................     29
         9.02.    Letter of Credit ......................................................................     29
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                              <C>
ARTICLE X - TERMINATION ......................................................................   30
         10.01.   Term .......................................................................   30
         10.02.   Termination of the Supplier ................................................   30
         10.03.   Termination by API .........................................................   31
         10.04.   Cure Period ................................................................   32
         10.05.   Effect of Termination ......................................................   32

ARTICLE XI - MISCELLANEOUS ...................................................................   33
         11.01.   Arbitration ................................................................   33
         11.02.   Complete Agreement .........................................................   33
         11.03.   Waiver, Discharge, etc. ....................................................   33
         11.04.   Notices ....................................................................   34
         11.05.   Governing Law; Jurisdiction ................................................   35
         11.06.   Successors .................................................................   35
         11.07.   Counterparts ...............................................................   36
         11.08.   Headings ...................................................................   36
         11.09.   Third Parties ..............................................................   36
         11.10.   Rules of Construction ......................................................   36
         11.11.   Force Majeure ..............................................................   37
         11.12.   Confidentiality ............................................................   37
</TABLE>

                                       ii

<PAGE>

                                SUPPLY AGREEMENT
                                ----------------

         THIS SUPPLY AGREEMENT ("Agreement") dated as of July 1, 1997, by and
                                 ---------
among Appleton Papers Inc., a Delaware corporation ("API"), ESCO Company Limited
Partnership, a limited partnership organized under the laws of Michigan (the
"Supplier"), Yamamoto Chemicals, Inc., a corporation organized under the laws of
 --------
Japan ("YK"), and Mitsui Toatsu Chemicals, Inc. (the successor by merger to
Mitsui Toatsu Chemicals, Inc.), a corporation organized under the laws of Japan
("MTC").

                                   WITNESSETH:
                                   -----------

         WHEREAS, API and its direct and indirect wholly owned subsidiaries WTA,
Inc., a Delaware corporation, and East Shore Chemical Co., Inc., a Michigan
corporation ("ESCO"), have entered into an Asset Purchase Agreement, dated as of
April 24, 1991 (the "Purchase Agreement"), with the Supplier, YK and MTC
                     ------------------
relating to the transfer to the Supplier of substantially all of the assets of
ESCO and certain related assets of API;

         WHEREAS, it was a condition to the closing under the Purchase Agreement
that API agree to buy and the Supplier agree to sell Products (as defined in
Section 1.01 hereof) for a period of 10 years from and after the closing of the
Purchase Agreement upon the terms and subject to the conditions provided for in
the Supply Agreement between the parties, dated June 13, 1991 (the "Prior Supply
Agreement"), which is being replaced by this Agreement;

         WHEREAS, it is acknowledged by the parties; that, prior to giving
effect to the closing under the Purchase Agreement, (a) Black Colorformers (as
defined in Section 1.01 hereof) were a key raw material used by API in its
business, (b) API was the sole purchaser of Black Colorformers sold by ESCO, (c)
the Supplier had no other customers (i.e., other than API

<PAGE>

pursuant to the Prior Agreement), (d) it was anticipated that, following the
Closing, the Supplier would need to expand its production capacity and incur the
costs related thereto in order to satisfy its obligations to supply the quantity
of Products required by the Prior Supply Agreement if it were to do so with
Products produced in Muskegon, Michigan, and (e) API intended to purchase a
substantial portion of its requirements for Black Colorformers from the Supplier
or YK; and

         WHEREAS, the parties desire to replace the Prior Supply Agreement with
this Agreement in order to reflect new terms and conditions of the supply
arrangement which have been agreed upon by the parties.

         NOW, THEREFORE, in consideration of the premises stated above and the
mutual promises and covenants contained herein, the parties hereto hereby agree
as follows:

                                    ARTICLE I

                                   DEFINITIONS

         1.01. Definitions. As used herein, the following terms shall have the
               -----------
following definitions:

         "Agreement" shall have the meaning given to that term in the recitals.
          ---------

         "API" shall have the meaning given to that term in the recitals.
          ---

         "API Company" shall have the meaning given to that term in Section
          -----------
3.01.

         "API Termination Breach" shall have the meaning given to that term in
          ----------------------
Section 7.01(d).

         "API's Use" shall mean the use of API and its wholly owned subsidiaries
          ---------
which have their headquarters in North America and are or shall be engaged in
the production of paper products.

                                       2

<PAGE>

         "Authorized Designee" shall mean any of the following designated from
          -------------------
time to time by the Supplier: MTC, YK or any affiliate of MTC or YK that is
controlled by MTC or YK.

         "Bankruptcy Law" shall have the meaning given to that term in Section
          --------------
10.02(c).

         "Basic Products" shall mean the Black Colorformers known to the parties
          --------------
as [*], [*] and [*].

         "Black Colorformers" shall mean single black colorforming chromogens
          ------------------
(specifically including any single chromogen which when co-reacted results in a
neutral or black marking) used alone or in combination with other single black
colorforming chromogens in the manufacture of carbonless paper and thermal
paper, including without limitation the Products.

         "[*] Guaranteed Quantity" shall have the meaning given to that term in
          -----------------------
Section 2.02(b).

         "Closing Date" shall have the meaning given to that term in the
          ------------
Purchase Agreement.

         "Contract Month" shall mean any and each of the one-month periods
          --------------
during the term hereof commencing on the first day of the first calendar month
beginning after the date hereof.

         "Contract Quarters" shall mean the successive three-month periods
          -----------------
during the term hereof commencing on the first day of the first calendar month
beginning after the date hereof.

         "Contract Year" shall mean the one-year periods during the term hereof
          -------------
commencing on the first day of the first calendar month beginning after the date
hereof and on each anniversary of such date.

         "Current Purchase Breach" shall have the meaning given to that term in
          -----------------------
Section 7.01(c).

         "ESCO" shall have the meaning given to that term in the recitals.
          ----

         "Equivalents" shall mean all Black Colorformers determined by agreement
          -----------
between API and the Supplier to be a substitute for Basic Products or
then-existing Equivalents for the purpose of satisfying API's obligation to
purchase the Guaranteed Quantity hereunder.

                                       3

<PAGE>

         "Equivalent Guaranteed Quantity" shall have the meaning given to that
          ------------------------------
term in Section 2.02(b).

         "Excess Quantities" shall have the meaning given to that term in
          -----------------
Section 2.02(b).

         "Future Products" shall have the meaning given to that term in Section
          ---------------
7.01(d).

         "Guaranteed Quantities" shall have the meaning given to that term in
          ---------------------
Section 2.02(a).

         "Identified Products" shall have the meaning given to that term in
          -------------------
Section 7.01(a).

         "Level Profit Margin" shall have the meaning given to that term in
          -------------------
Section 2.04(b).

         "License Agreement" shall have the meaning given to that term in
          -----------------
Section 3.02.

         "MTC" shall have the meaning given to that term in the recitals.
          ---

         "[*] Guaranteed Quantity" shall have the meaning given to that term in
          -----------------------
Section 2.02(b).

         "New Products" shall have the meaning given to that term in Section
          ------------
3.04.

         "[*] Guaranteed Quantity" shall have the meaning given to that term in
          -----------------------
Section 2.02(b).

         "Other Damages" shall mean, under the circumstances, all other damages
          -------------
which a party shall be determined to be entitled to recover, pursuant and
subject to applicable law.

         "Parent" shall have the meaning given to that term in Section 3.01(d).
          ------

         "Parent Breach" shall have the meaning given to that term in Section
          -------------
7.01(a).

         "Permitted Purchases" shall have the meaning given to that term in
          -------------------
Section 3.01.

         "Prime Rate" shall mean the rate from time to time publicly announced
          ----------
by Citibank N.A., as its prime rate of interest applicable to loans in United
States Dollars.

         "Products" shall mean all products sold under this Agreement, which
          --------
shall consist of the Basic Products, the Equivalents and any other Black
Colorformers purchased by API pursuant to this Agreement.

         "Proposed Equivalent" shall have the meaning given to that term in
          -------------------
Section 2.03(g).

                                       4

<PAGE>

         "Purchase Agreement" shall have the meaning given to that term in the
          ------------------
recitals.

         "Purchase Notice" shall have the meaning given to that term in Section
          ---------------
2.03(c).

         "Receiver" shall have the meaning given to that term in Section
          -------
10.02(e).

         "Related Technology" shall have the meaning given to that term in
          ------------------
Section 3.04.

         "Restricted Black Colorformer" shall mean any existing Black
          ----------------------------
Colorformer as to which information (whether or not in API's possession) is
protected against disclosure to the Supplier by bona fide confidentiality
                                                ---- ----
restrictions benefiting third parties relating to the manufacturing process
therefor or any existing Black Colorformer which the Supplier is unable to
manufacture or sell without infringing, inducing any infringement of or
contributing to any infringement of, any present law, or any United States or
foreign patent owned by or licensed to any third party.

         "Supplier" shall have the meaning given to that term in the recitals.
          --------

         "Third Purchase Notice" shall have the meaning given to that term in
          ---------------------
Section 2.03(d).

         "Transferred Technologies" shall mean the patents, patent applications,
          ------------------------
know-how and trade secrets which were transferred to the Supplier pursuant to
the Purchase Agreement.

         "YK" shall have the meaning given to that term in the recitals.
          --

                                   ARTICLE II

                          PURCHASE AND SALE OF PRODUCTS

         2.01. General. Upon the terms and subject to the conditions stated
               -------
herein, API shall purchase from the Supplier solely for API's Use, and the
Supplier shall sell or cause to be sold to API, the Products.

         2.02. Quantities.
               ----------

               (a) Guaranteed Quantities. Subject to Section 3.01(b) hereof, for
                   ---------------------
each Contract Year during the term of this Agreement, API shall be required to
purchase and the

                                       5

<PAGE>

Supplier or YK shall be required to supply not less than the quantities of
Products set forth in Exhibit A hereto (the "Guaranteed Quantities").
                                             ---------------------

           (b) Annual Estimate. At least 90 days prior to the commencement of
               ---------------
each Contract Year beginning with the second Contract Year hereunder, API shall
deliver to the Supplier (or its Authorized Designee) a notice setting forth (i)
the respective quantities of [*] (the "[*] Guaranteed Quantity"), of [*] (the
                                       -----------------------
"[*] Guaranteed Quantity"), of [*] (the "[*] Guaranteed Quantity") and of any
 -----------------------                 -----------------------
Equivalents (the "Equivalent Guaranteed Quantity") included within the
                  ------------------------------
Guaranteed Quantity for the next succeeding Contract Year and (ii), to the
extent then foreseeable by API, the estimated amounts and identities of any
Black Colorformers in excess of the Guaranteed Quantities (the "Excess
                                                                ------
Quantities") that API estimates it will purchase hereunder during such Contract
----------
Year.

           (c) Quarterly Estimate. At least 60 days prior to the commencement of
               ------------------
each Contract Quarter beginning with the second Contract Quarter, API shall
deliver to the Supplier (or its Authorized Designee) a notice setting forth (i)
the respective portions of the [*] Guaranteed Quantity, the [*] Guaranteed
Quantity, and any Equivalent Guaranteed Quantity and (ii) the amounts and
identities of any Excess Quantities, in each case that API estimates it will
purchase hereunder during each Contract Month in such next succeeding Contract
Quarter. API shall use its reasonable efforts to purchase within each Contract
Quarter the Products set forth in the notice delivered with respect thereto
pursuant to this clause (c), and the parties shall discuss in good faith from
time to time an appropriate schedule for, and the amount of, deliveries of
Products within each such Contract Quarter and Contract Month.

         2.03. Purchase Orders.
               ---------------

                                       6

<PAGE>

           (a) Contents. Not later than 30 days before each required delivery
               --------
date, API shall submit to the Supplier (or its Authorized Designee) a purchase
order setting forth (i) the amount and type of Products that API shall purchase
pursuant thereto; and (ii) the requested date or dates of delivery and ship-to
locations of such Products. The parties shall discuss in good faith from time to
time the minimum quantity of each shipment and the maximum number of shipments
per month. Attached hereto as Schedule 2.03 is a sample purchase order.

           (b) Distribution of Purchases. Unless otherwise from time to time
               -------------------------
agreed, (i) the aggregate quantity with respect to the total Products ordered
for each Contract Quarter shall be not less than 80% nor more than 120% of the
quantity ordered with respect to each of the [*] Guaranteed Quantity, the [*]
Guaranteed Quantity, the [*] Guaranteed Quantity and any Equivalent Guaranteed
Quantity for the relevant Contract Year multiplied by one-quarter (0.25) and
(ii) the quantity of [*], [*] and Equivalents ordered for delivery in each
Contract Month shall be not less than 80% nor more than 120% of the quantity of
each of the [*], [*] and Equivalents estimated to be purchased during such
Contract Month in the estimate delivered by API pursuant to Section 2.02(c). API
shall use reasonable efforts to distribute its requirement of Products for each
Contract Quarter evenly throughout the Contract Months therein.

           (c) Excess Quantities; Notice. Except with respect to purchases
               -------------------------
permitted by Section 3.01(c) or (d) hereof, in the event that API wishes to
purchase Excess Quantities, prior to contacting (except for the purpose of
getting information about market price) any other potential supplier with
respect thereto, API shall deliver to the Supplier or its Authorized Designee an
offer to purchase such Excess Quantities (a "Purchase Notice") identifying (i)
                                             ---------------
the amount and specifications (including, with respect to any Black Colorformers
not developed by the Supplier, information in API's possession, which is not
protected against disclosure by bona fide

                                       7

<PAGE>

confidentiality restrictions benefiting third parties, relating to the
manufacturing process therefor sufficient to enable the Supplier or its
Authorized Designee to determine its ability to supply such Black Colorformers)
of the Excess Quantities which API wishes to purchase, (ii) the purchase price
proposed by API for the Products and (iii) the delivery terms therefor (which
shall provide for delivery in not less than (x) 30 days with respect to Basic
Products and Equivalents theretofore produced by the Supplier, and (y) 60 days
with respect to all other Products. The Supplier shall, by itself or through its
Authorized Designee, advise API whether and to what extent it accepts the
Purchase Notice within 20 days after its receipt thereof with respect to
Products previously supplied by the Supplier, and 30 days with respect to all
other Products.

           (d) Purchase from Others. Following a rejection, in whole or in part,
               --------------------
by the Supplier of a Purchase Notice, API shall, subject to the provisions of
Section 3.01 hereof, be permitted to contact other potential suppliers and to
purchase from them any or all (but no more than) the Black Colorformers
identified in the rejected portion of the Purchase Notice, on terms and
conditions (including price, quantities and delivery dates, but excluding
remedies) not less favorable to API than those contained in the Purchase Notice;
provided, however, that API may not enter into any understanding or contract of
--------  -------
more than (i) six months (twelve months duration if entered into during Contract
Year 5 through Contract Year 10) duration to purchase Black Colorformers from a
third party (other than YK) which has previously supplied such Black
Colorformers or (ii) twelve months duration to purchase Black Colorformers from
a third party (other than YK) which has not previously supplied such Black
Colorformers unless, at the time of the rejection by the Supplier of the
relevant Purchase Notice, the Supplier is unable to provide reasonable
assurances that it will have the capacity or ability to fill Purchase Notices
for the Excess Quantities identified in the relevant Purchase Notice. In the
event that API purchases any

                                       8

<PAGE>

such Black Colorformers from a third party, API shall, on or before the date of
such purchase, deliver to the Supplier (or its authorized designee) a notice
(the "Third Party Purchase Notice") describing the terms and conditions of such
      ---------------------------
third party's agreement to sell such Black Colorformers to API and shall provide
reasonable evidence to the Supplier that such agreement is for the purchase of
no more than the Black Colorformers identified in the rejected portion of the
Purchase Notice on the terms and conditions (including price, quantities and
delivery dates) of such rejected portion of such Purchase Notice.

           (e) Conflicting Terms. If and to the extent that the terms and
               -----------------
conditions of this Agreement conflict with the terms and conditions of any
purchase orders or Purchase Notices submitted by API to the Supplier under this
Section 2.03, the terms and conditions of this Agreement shall control.

           (f) Substitute Products. In the event the Supplier develops a Black
               -------------------
Colorformer that it proposes be substituted for [*] or [*] or any then-existing
Equivalent hereunder in respect of API's obligation to purchase the Guaranteed
Quantities, it shall send to API a test sample of such Black Colorformer and
provide to API information about the properties and characteristics of the
proposed substitute, but excluding information relating to manufacturing
processes. If API agrees that the Black Colorformer is an acceptable substitute,
then such Black Colorformer shall be so substituted as an Equivalent to the
extent that API and the Supplier agree, except that the price shall be
determined according to Section 2.04(b).

           (g) Proposed Equivalents. In the event API or any third party
               --------------------
develops a Black Colorformer that API proposes be substituted for [*] or [*] or
any then-existing Equivalent hereunder in respect of API's obligation to
purchase the Guaranteed Quantities, API shall provide the Supplier and/or YK
with specifications and such know-how and other technical

                                       9

<PAGE>

information in API's possession, which is not protected against disclosure by
bona fide confidentiality restrictions benefiting third parties, as the Supplier
or YK may reasonably request within 15 days after receipt of API's proposal in
order to determine whether such Black Colorformer (a "Proposed Equivalent") can
                                                      -------------------
be an Equivalent hereunder. If the Supplier agrees to manufacture such Proposed
Equivalent, (i) API shall license or sublicense the Supplier and/or YK to
manufacture and supply the same solely for API's Use and (ii) the Proposed
Equivalent shall be deemed to be an Equivalent hereunder to the extent agreed by
API and the Supplier, except that the price shall be determined according to
Section 2.04(b). In no event shall API initiate, continue or conduct any
discussions with any third party (other than MTC or YK) regarding the possible
purchase by API or its subsidiaries of any Proposed Equivalents prior to the
expiration of 60 days from the date that API complies in all material respects
with the first sentence of this Section 2.03(g).

           2.04. Price.
                 -----

                 (a) Basic Products. The price for the Basic Products included
                     --------------
in the Guaranteed Quantities shall be as set forth (i) in Exhibit A hereto for
the first four Contract Years and (ii) in the next paragraph for Contract Years
five through ten, subject to such adjustment as may be agreed pursuant to
Section 2.05 hereof.

                 The price for the Basic Products included in the Guaranteed
Quantities for each of the fifth through the tenth Contract Years shall be the
Current Market Price (defined below) plus [*].

The price for the Basic Products included in the Excess Quantities for each of
the fifth through tenth Contract Years shall be the Current Market Price.

                                       10

<PAGE>

     The "Current Market Price", as that term is used in this Section 2.04(a),
means the price which is to be established pursuant to a meeting (the "Annual
Meeting") to be held annually between representatives of API, Supplier and YK.
The Annual Meeting shall be held during the last Calendar Quarter of the
Contract Year immediately preceding each Contract Year for which the Current
Market Price is to be established (such preceding Contract Year being referred
to as the "Current Contract Year" and such following Contract Year for which the
Current Market Price is to be established being referred to as the "Following
Contract year"), but not later than thirty (30) days prior to the end of such
Calendar Quarter. At each Annual Meeting, Supplier's or YKs representative shall
inform API of (i) [*] and (ii) [*]. The lowest of such prices shall be
established as the Current Market Price for the Following Contract Year unless
API notifies Supplier, not later than at the Annual Meeting, that API is aware
of a lower price that was charged on a regular basis by Supplier, YK or any
other significant supplier of Basic Products, or was offered by Supplier or YK
to be charged on a regular basis on new business, during such Current Contract
Year up to the date of the Annual Meeting, in which case the Current Market
Price shall be such lower price if API provides Supplier with information
evidencing such lower price or if Supplier, in attempting in good faith to
determine the validity any such claim, determines the validity of such claim.

     If the parties disagree regarding the amount of the "Current Market Price"
for the Following Contract Year, such price shall be deemed to be the "Current
Market Price" for the Current Contract Year. Once the "Current Market Price" is
determined, it shall be applied retroactively to the beginning of the Following
Contract Year and the party owing an additional amount or a refund, as the case
may be, shall pay the amount thereof promptly plus interest at eighteen percent
(18%) per annum from the date each payment for Products was due to Supplier.

                                       11

<PAGE>

     The term "regular basis", as used in this Section, shall mean on a regular,
recurring basis and not (A) on a "spot" basis, (B) as a special price in
consideration of past business done or services provided or (C) as some other
special promotion or price not constituting the normal price to be charged to a
non-affiliated customer. The term "significant supplier", as used in this
Section, shall mean an entity which is a recognized specialty chemical
manufacturer of the Products which has the resources and capacity to supply
Basic Products to meet API's quoted requirements on a continuing basis.

           (b) Equivalents. The price for any Equivalent included in the
               -----------
Guaranteed Quantities shall initially be a price to be agreed upon by API and
the Supplier, which shall equal the amount necessary to permit the Supplier to
achieve substantially the same profit margin with respect to the Equivalent as
it expected to achieve with respect to the Guaranteed Quantity for which the
Equivalent is a substitute ("Level Profit Margin"). Until the marginal
                             -------------------
manufacturing cost of an Equivalent stabilizes, its price may be adjusted from
time to time by agreement between API and the Supplier, which adjustment shall
be made in order to maintain a Level Profit Margin. After the parties agree that
the manufacturing cost for an Equivalent has stabilized, the price for such
Equivalent shall be increased at a rate of [*]% per annum from a date agreed
upon by the parties. The price for Equivalents shall be subject to such
adjustment as may be agreed pursuant to Section 2.05 hereof.

     2.05. Price Adjustments. From time to time during the term of this
           -----------------
Agreement, in the event that either API or the Supplier believes that the
Supplier has experienced a significant change in manufacturing costs of the
Products as a result of drastic changes in external economic conditions, such
party shall have the right to give notice to the other party of such event and
to request that the other party discuss with it whether there should be an
adjustment, either up or

                                       12

<PAGE>

down, in the price of one or more of the Products. Promptly after any such
notice is given, the parties shall discuss, in good faith, whether and on what
terms there should be a price adjustment. The party requesting a price
adjustment shall provide reasonable information to the other party to support
its belief that the Supplier has experienced such a significant change. In
discussing whether there should be a price adjustment, the parties shall
consider all relevant factors, including, without limitation, changes in the
costs of labor, materials, freight, taxes and compliance with environmental laws
and regulations. The foregoing agreement of the parties to discuss in good faith
whether to adjust the price of any Product shall in no way constitute a binding
obligation on the part of either party to agree to any request for a price
adjustment or relieve either party of its obligations to perform under this
Agreement.

         2.06. Effect of Imports. If API notifies Supplier that the quantity of
               -----------------
either carbonless or thermal paper sold in the United States during any
particular Contract Year by suppliers based in other countries was in excess of
[*] percent ([*]%) of the total quantity thereof sold in the United States
during such Contract Year, and provides documentation to Supplier establishing
that such is the case, then Supplier and API shall discuss the prices paid by
such foreign-based suppliers for colorformer and shall negotiate in good faith
in an attempt to address the impact of such colorformer prices on API's ability
to compete in the United States with foreign-based suppliers of such carbonless
or thermal paper.

                                   ARTICLE III

                               PERMITTED PURCHASES

         3.01. Permitted Purchases.  API shall not, and shall not permit any of
               -------------------
its wholly owned subsidiaries (each an "API Company") to, purchase any Black
                                        -----------
Colorformers from any suppliers other than the Supplier except as follows
("Permitted Purchases"):
  -------------------

                                       13

<PAGE>

            (a)    Rejected Purchase Notice. In any Contract Year, API and the
                   ------------------------
API Companies shall be entitled to purchase solely for API's Use Black
Colorformers, as to which a Purchase Notice has been rejected by the Supplier,
from suppliers other than the Supplier in accordance with Section 2.03(d).

            (b)    Failure to Supply; Nonconforming Product. Except as otherwise
                   ----------------------------------------
provided herein, API and the API Companies shall be entitled to purchase Black
Colorformers solely for API's Use from suppliers other than the Supplier if and
to the extent that, (i) the Supplier shall fail to fill properly submitted
purchase orders therefor or Purchase Notices that the Supplier has accepted or
(ii) the Supplier shall fail, within 30 days (for Products supplied from Japan)
or within 15 days (for Products supplied domestically) of its receipt from API
of timely notice with respect thereto, to replace any Product supplied hereunder
which does not conform to the warranties set forth in Section 4.01 hereof.

            (c)    [*] Pounds. API and the API Companies shall be entitled to
                   ----------
purchase solely for API's Use up to an aggregate of [*] pounds per Contract Year
of Black Colorformers from suppliers other than the Supplier or YK; provided,
however, that (i) up to, but not more than, [*] pounds per Contract Year may be
comprised of Basic Products and Equivalents, and (ii) up to, but not more than,
[*] pounds per Contract Year may be comprised of Restricted Black Colorformers,
including [*].

            (d)    Custom Coating.  API shall be entitled to purchase,
                   --------------
from third parties, [*] or other Black Colorformers (other than the Basic
Products or Equivalents) specified by Wiggins Teape Appleton plc or its
subsidiaries that do not have their headquarters in North America (the "Parent")
                                                                        ------
for use in paper products produced by API for sale to the Parent and which are,
in turn, intended for resale to third party customers outside of North America.
API shall, at no cost to it,

                                       14

<PAGE>

provide reasonable assistance, subject to confidentiality obligations to third
parties, in any efforts by the Supplier to become an approved supplier of Black
Colorformers so specified by the Parent.

                (e)   Obligations Not Impaired. Notwithstanding anything herein
                      ------------------------
to the contrary, nothing contained in this Section 3.01 shall be construed or
interpreted to impair in any way API's obligation to purchase the Guaranteed
Quantities or to submit Purchase Notices for Excess Quantities pursuant to
Section 2.03 or to purchase Black Colorformer from YK pursuant to Section 3.04.

         3.02.  License. If requested by API, the Supplier shall grant the
                -------
suppliers of the Permitted Purchases under Section 3.01(a), (b) and (c) a
royalty-free, nonexclusive license to use the Transferred Technologies and to
make and sell Products for API's Use for the limited and express purpose of
supplying such Permitted Purchases subject to the prior execution by any such
suppliers of a license agreement (a "License Agreement") substantially in the
                                     -----------------
form attached as Exhibit B hereto; provided, however, that if the supplier of
the Permitted Purchase is Hilton-Davis Company, the license shall relate only to
the patents and patent applications included in the Transferred Technology and
such know-how and trade secrets of which Hilton-Davis has as of the date of this
Agreement. In the event that API proposes to make a Permitted Purchase from a
third party supplier and has requested that the Supplier grant such a license,
API shall provide to the Supplier a License Agreement executed by the third
party supplier with all blanks filled in and a written statement describing the
proposed Permitted Purchase; if, within 15 days of the Supplier's receipt of
such License Agreement, the Supplier has neither (i) executed and returned such
License Agreement to API, nor (ii) given API a written notice stating that the
proposed Permitted Purchase fails to comply with the provisions of Section 3.01,
and specifying the

                                       15

<PAGE>

grounds for such objection, then in such event API shall be entitled to execute
and deliver to the third party supplier such License Agreement in the name of
the Supplier as the Supplier's attorney-in-fact attached hereto as Exhibit D.
If, within 10 days after API's receipt of the Supplier's objections, API and the
Supplier shall fail to resolve any disputes they may have as respects compliance
with Section 3.01, then API may execute and deliver such License Agreement as
the Supplier's attorney-in-fact; provided, however, that API shall pay to the
                                 --------  -------
Supplier an amount equal to 8% of the purchase price for each pound of Product
supplied by the other supplier pursuant to such License Agreement, if it should
be finally determined, in an arbitration or legal proceeding relating thereto,
that the said proposed Permitted Purchase did not comply with Section 3.01 for
reasons substantially similar to those specified by the Supplier in its written
notice. The existence of the remedy provided in the immediately preceding
sentence shall not preclude the Supplier from pursuing other legal or equitable
remedies, whether provided by this Agreement or otherwise. The limited
power-of-attorney granted hereunder shall (i) be solely for the purpose of
executing and delivering a License Agreement and not for any other purpose
(including, without limitation, amending or modifying a License Agreement), (ii)
be irrevocable during the term of this Agreement and shall be revoked upon the
termination hereof and (iii) shall be in a form substantially similar to Exhibit
D attached hereto and shall be executed and delivered by the Supplier to API
along with the execution and delivery of this Agreement. As between API and the
Supplier, API shall be responsible for any failures by such suppliers to comply
with any License Agreement granted in connection with Permitted Purchases
pursuant to Section 3.01(c), and the Supplier shall be responsible for any
failures by such suppliers to comply with any License Agreement granted in
connection with Permitted Purchases pursuant to Section 3.01(a) and (b).

                                       16

<PAGE>

         3.03.  Representation by API. API represents and warrants that neither
                ---------------------
it nor any API Company is required or bound to purchase Black Colorformers from
any other party [except pursuant to that certain agreement dated 1981 between
API and Hilton-Davis Company].

         3.04.  Right of First Negotiation. During the term hereof, if API
                --------------------------
(including for this purpose its affiliates which are headquartered in North
America and its subsidiaries) develops any new Black Colorformers or new
technology related to the manufacture of the same (any of the foregoing, "New
                                                                          ---
Products") that API commercializes for use in carbonless or thermal paper, API
--------
shall not license any third party (other than MTC or YK) to make, use and/or
sell such New Products and shall not discuss any such license with any third
party (other than MTC or YK) except in accordance with the following procedures:
(a) API shall deliver to the Supplier, MTC and YK a notice describing the New
Products in sufficient detail to permit the Supplier, MTC and YK to determine
whether the New Products are commercially practicable for manufacture by the
Supplier, MTC or YK; (b) the Supplier, MTC and YK shall have 30 days from the
receipt of such notice to advise API whether the Supplier, MTC and/or YK are
interested in negotiating the terms of a license with respect to the New
Products; (c) if the Supplier, MTC and/or YK gives notice to API that the
Supplier, MTC and/or YK, as the case may be, are interested in negotiating the
terms of such a license, then API and the Supplier, MTC and/or YK, as the case
may be, shall negotiate in good faith the terms of an exclusive license to make,
use and/or sell, but not have made, the New Products for API's sole benefit
unless otherwise agreed; and (d) if (i) none of the Supplier, MTC or YK, within
said 30-day period, shall have advised API that it is interested in negotiating
the terms of an exclusive license with respect to the New Products or (ii) API
and the Supplier, MTC and/or YK negotiate in good faith for a period of 60 days
from the receipt by API of notice that the Supplier, MTC and/or YK is interested
in negotiating the terms

                                       17

<PAGE>

of an exclusive license with respect to the New Product but are unable to reach
agreement on the terms for such a license, then API shall be permitted to
contact third parties regarding the New Products and to enter into license
agreements with such third parties. In the event API enters into any such
license agreement with any third party, API shall, upon request, grant to the
Supplier, MTC and/or YK a nonexclusive license with respect to the New Products
on terms no less favorable to the Supplier, MTC and/or YK than those contained
in the license granted to any third party; provided, however, that nothing
                                           --------  -------
herein shall require API to grant the Supplier, MTC and/or YK a license with
respect to New Products on terms as favorable as those granted to API's
affiliates. If during the term hereof, API (including for this purpose its
subsidiaries which are headquartered in North America) develops any new
commercial uses for any existing Black Colorformers or any new technology
related to the manufacture of Black Colorformers (any of the foregoing, "Related
                                                                         -------
Technology") that API commercializes for use in record or imaging systems (other
----------
than carbonless or thermal paper), API shall discuss in good faith with the
Supplier, MTC and YK the possibility of licensing the Related Technology to the
Supplier, MTC and/or YK; provided, however, that API shall have no obligation to
                         --------  -------
grant any such license to the Supplier, MTC and/or YK.

                                   ARTICLE IV

                               PRODUCT WARRANTIES

            4.01. Product Warranties. The Supplier represents and warrants to
                  ------------------
API that (a) the Basic Products sold hereunder shall conform to the
specifications set forth on Exhibit C hereto as now in effect and as from time
to time amended by mutual agreement and (b) the Equivalents

18

<PAGE>

and other Black Colorformers sold hereunder shall conform to such specifications
as the Supplier and API agree upon in writing at or prior to the time of sale
thereof.

           4.02.  No Other Warranties. API ACKNOWLEDGES AND AGREES THAT THE
                  -------------------
PRODUCTS ARE SOLD WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES (INCLUDING
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE) EXCEPT FOR
THOSE CONTAINED IN SECTION 4.01 HEREOF.

           4.03.  Warranty Claims. Any notice of breach of warranty must be made
                  ---------------
by API in writing to the Supplier within 90 days of API's receipt of the
Products at issue and no claim for breach of warranty may be made by API
thereafter.

                                    ARTICLE V

                             DELIVERY AND INSPECTION

           5.01.  Transportation. API shall pay the costs of transportation
                  --------------
from Muskegon, Michigan, except for Products shipped to Harrisburg,
Pennsylvania, for which the Supplier shall pay the costs of transportation. All
Products shall be delivered on a duty-paid basis.

           5.02.  Title. Title to and risk of loss of the Products sold
                  -----
hereunder shall pass to API upon the Supplier's tender of delivery of the
Products, at Harrisburg, as to the Products ordered to be delivered at
Harrisburg, and at Muskegon, as to all remaining Products.

           5.03.  Inspection. API shall promptly inspect Products sold hereunder
                  ----------
upon its receipt thereof and shall promptly, but in no event later than 90 days
after such receipt, notify the Supplier of any shortfalls in quantity or of any
claims of breach of warranty. If API makes any claim of breach of warranty, it
shall (a) hold the goods for a reasonable period for the Supplier's inspection
and provide reasonable access during normal business hours for the Supplier's

                                       19

<PAGE>

inspectors to conduct such inspection or (b), at the Supplier's request and
expense, ship all or part of the delivery back to the Supplier for testing. No
such request by the Supplier to API to return Products to the Supplier for
testing shall be deemed an admission that the Products are non-conforming.

           5.04.  Production Methods. The Supplier shall give 60 day's written
                  ------------------
notice to API prior to any material changes in the production methods used by
the Supplier relating to the Products and shall provide to API such samples and
information about the properties and characteristics of such samples (excluding
information relating to manufacturing processes) as may be reasonably requested
by API in order to permit API to analyze and conduct tests of the Products to be
produced by such new production methods; provided, however, that no such samples
                                         --------  -------
or information need be provided by the Supplier in the event it adopts the
production methods used as of the date of this Agreement by YK to make [*] for
API. API shall advise the Supplier of the results of such analyses and tests
within 30 days of its receipt of such samples. Notwithstanding anything herein
to the contrary, the Supplier shall determine in its sole discretion the
production methods to be employed in the Supplier's manufacturing facilities.

                                   ARTICLE VI

                                  PAYMENT TERMS

          6.01.   Time of Payment. The payment of the purchase price of the
                  ---------------
Products included in the Guaranteed Quantities shall be made to the Supplier or
a designee of the Supplier within 30 days following the tender of delivery
thereof in United States Dollars for the full amount of each sale and purchase
under this Agreement. The payment of the purchase price for such Products in the
United States shall be made by, at API's option, company check written on APIs
accounts or

                                       20

<PAGE>

wire transfer. API and the Supplier shall endeavor in good faith to establish an
appropriate payment mechanism as respects any payments to be made outside of the
United States.

         6.02. Taxes. If any additional United States federal or state sales,
               -----
value added or other similar tax or surcharge (except only for customs duties)
is imposed on the sale of the Products to API in such fashion that the Supplier
would be required by the relevant authority to account for the same, the full
amount for which the Supplier is so held accountable shall be charged to and
paid by API; provided, however, that API shall not be obligated to pay or
             --------  -------
discharge any Taxes applicable to the Supplier's, YK's or MTC's production
facilities or operations, income or profits; provided, further, that the
                                             --------  -------
Supplier shall afford reasonable assistance, in the form of supplying data and
information, to API in connection with any challenge or contest by API, as
respects the validity or amount of any tax or surcharge which API shall be
required to pay or discharge pursuant to this Section 6.02.

                                   ARTICLE VII

                             THE SUPPLIER'S REMEDIES

         7.01. Remedies. In the event of a breach of this Agreement by API, the
               --------
remedies of the Supplier shall be as follows:

               (a) Price. In the event that API (x) fails to pay the price
                   -----
provided for herein as it becomes due for any Products that have been produced
pursuant to this Agreement or a purchase order submitted or Purchase Notice
accepted hereunder and identified to this Agreement ("Identified Products") or
                                                      -------------------
(y) repudiates its obligation to pay for Identified Products or wrongfully
rejects or revokes acceptance of Identified Products (any such event, a "Payment
                                                                         -------
Breach"), and either (A) the Identified Products have not been resold to a third
------
party within 90

                                       21

<PAGE>

days of the Payment Breach after reasonable effort to resell, i.e., to acquire
orders for (but not necessarily deliver) them or (B) the circumstances
reasonably indicate that such effort will be unavailing, then and in that event
the Supplier shall be entitled to receive from API (i) the price provided for
herein of such Products, plus (ii) any Other Damages incurred by the Supplier
arising from or out of API's breach.

         (b) Supplier's Resale. In the event that API commits a Payment Breach
             -----------------
and the Supplier is able within 90 days of the date of the Payment Breach to
resell (but not necessarily deliver) any or all of the Identified Products to a
third party, then and in that event, in lieu of the remedy provided for in
Section 7.01(a) with respect to such Identified Products, the Supplier shall be
entitled to receive from API:

         (x) the price provided for herein of such Identified Products, plus (A)
             any other Damages incurred by the Supplier arising from or out of
             API's breach, minus (B) the net proceeds of resale of the
             Identified Products, and minus (C) any expenses saved in
             consequences of API's breach; provided, however, that if the remedy
                                           --------  -------
             provided for in this clause (x) is inadequate to put the Supplier
             in as good a position as the Supplier would have been in if API had
             not committed such Payment Breach, then the Supplier shall be
             entitled to receive from API:

         (y) the profit (including reasonable overhead) which the Supplier would
             have made from full performance by API of its obligations to pay
             for the Identified Products, plus (A) any Other Damages incurred by
             the Supplier arising from or out of API's breach, and minus (B) the
             net profit of resale of the Identified Products unless it shall be
             determined that the Supplier is a lost-volume seller at the time of
             such breach.

                                       22

<PAGE>

         (c) Repudiation of Current Obligation. in the event that API wrongfully
             ---------------------------------
fails to accept or repudiates its obligation to purchase Products as to which
API has submitted a purchase order or a Purchase Notice that has been accepted
("Current Purchase Breach"), and no remedy is available under Section 7.01(a) or
  -----------------------
(b) hereof, the Supplier shall be entitled to receive from API:

         (x) the excess of the price provided for herein for such Products over
             the market price, if any, for such Products determined as of the
             time and place of such breach, plus (A) any Other Damages incurred
             by the Supplier arising from or out of such breach, and minus (B)
             any expenses saved in consequence of API's breach; or

         (y) if the remedy provided for in clause (x) is inadequate to put the
             Supplier in as good a position as the Supplier would have been in
             if API had not committed such Current Purchase Breach, then the
             Supplier shall be entitled to receive from API the profit
             (including reasonable overhead) which the Supplier would have made
             from full performance by API of its obligations under this
             Agreement to purchase such Products together with any Other Damages
             incurred by the Supplier arising from or out of such breach.

         (d) Breach Giving Rise to Termination. In the event that API breaches
             ---------------------------------
or otherwise anticipatorily repudiates (in either event by reason of the
occurrence of any of the events entitling the Supplier to terminate this
Agreement) any other obligations hereunder with respect to the purchase of or
offer to purchase (i) all the Guaranteed Quantities and (ii) all Excess
Quantities, if any, as to which API has delivered a Purchase Notice that the
Supplier has previously accepted (the Products described in clauses (i) and (ii)
are referred to as "Future Products" and any such breach is referred to as an
                    ---------------
"API Termination Breach"), and no adequate remedy is available under Section
 ----------------------
7.01(a) or (b) hereof, the Supplier shall be entitled to terminate the Agreement
and receive from API:

         (x) the excess of the price provided for herein for such Future
             Products over the market price, if any, for such Future Products
             determined as of the time and place of such breach, plus (A) any
             Other Damages incurred by the Supplier arising from or out of such

                                       23

<PAGE>

             breach, and minus (B) any expenses saved in consequence of API's
             breach; or

         (y) if the remedy provided for in clause (x) is inadequate to put the
             Supplier in as good a position as the Supplier would have been in
             if API had not committed such API Termination Breach, then the
             Supplier shall be entitled to receive from API the profit
             (including reasonable overhead) which the Supplier would have made
             from full performance by API of its obligations under this
             Agreement to purchase Future Products together with any Other
             Damages incurred by the Supplier arising from or out of such
             breach.

     In calculating damages under this Section 7.01(d), the parties shall assume
that the ratio among the [*] Guaranteed Quantity, [*] Guaranteed Quantity and
Equivalent Guaranteed Quantity (and ratio of such Equivalents within the
Equivalent Guaranteed Quantity) continues to be the same during the remaining
term hereof as those reflected in the immediately preceding notice given under
Section 2.02(b).

         (e) Non-Permitted Purchases. In the event API purchases Black
             -----------------------
Colorformer from a third party in violation of Sections 2.03(c), 2.03(d),
2.03(g), or 3.01, the Supplier shall be entitled to liquidated damages in an
amount equal to 20% of the amount paid, directly or indirectly, by or on behalf
of API to such third party in respect of such Black Colorformer. The parties
specifically agree that the actual loss arising from such breach would be
difficult to prove and that such liquidated damages are reasonable in light of
the anticipated or actual harm.

         (f) Additional Costs and Interest. In the event of any breach the
             -----------------------------
remedy for which is governed by this Agreement, the Supplier's damages shall
also include the costs of enforcing this Agreement (including fees and expenses
of counsel) and interest at the Prime Rate plus 2% from the date of breach.

         (g) Unrecovered Expansion-Related Costs. In acknowledgment of the fact
             -----------------------------------
that the Supplier expanded its production capacity of its plant in Muskegon,
Michigan, and

                                       24

<PAGE>

incurred the costs related thereto in order to satisfy its obligations to supply
the quantity of Products required by the Prior Supply Agreement and expected to
be required by this Agreement, the parties understand that, as a consequence of
any breach hereunder by API, the Supplier may, in an appropriate case, be
entitled to recover as damages unrecovered costs (such as the costs of such
expansion or any additional expansion, costs incurred in connection with the
purchase or lease of additional properties and equipment, the hiring of
additional management and labor and the construction of additional facilities)
that the Supplier actually shall have incurred after the date of this Agreement
in order to satisfy its obligation to sell Products pursuant to the Prior Supply
Agreement and/or this Agreement, if and to the extent such costs are determined
to be appropriate damages under the circumstances; it being further agreed that
API reserves the right to challenge the Supplier's entitlement to such damages
as well as the amount thereof.

         7.02. Remedies Non-Exclusive. Unless otherwise expressly provided in
               ----------------------
this Agreement, the remedies provided for herein in the event of a breach by API
shall be in addition to all other remedies available to the Supplier at law or
in equity, including, without limitation, remedies provided by the Uniform
Commercial Code as from time to time in effect in the State of New York, and by
the common and other statutory laws of the State of New York. To that end, in a
proper case, the Supplier's remedies may include, without limitation, injunctive
relief and replevin and the Supplier's other Damages may include, without
limitation, incidental and consequential damages. Except as otherwise expressly
provided herein, the remedies provided to the Supplier by law, equity or this
Agreement shall be liberally administered to the end that if the Supplier is
injured by a breach hereof the Supplier shall be put in as good a position (but
not unjustly enriched) as it would have been in if API had fully performed.

                                       25

<PAGE>

                                  ARTICLE VIII

                                 API'S REMEDIES

         8.01. Remedies. In the event of a breach of this Agreement by the
               --------
Supplier, the remedies of API shall be as follows:

               (a) Cover. If the Supplier fails to make, or fails to cause to be
                   -----
made, a timely delivery to API of the Products for which a proper purchase order
has been delivered or a Purchase Notice has been delivered and accepted, API
shall be entitled to receive as damages from the Supplier an amount equal to the
difference between (i) the purchase cost, if any, incurred by API in purchasing
from a third party the Products which the Supplier failed to deliver or cause to
be delivered and (ii) the price provided for such Products hereunder, plus (iii)
any Other Damages incurred by API arising from or out of the Supplier's breach,
minus (iv) any expenses saved in consequences of the Supplier's breach.

               (b) Repudiation of Current Obligation. In the event that the
                   ---------------------------------
Supplier wrongfully fails to deliver or repudiates its obligation to deliver
Products as to which API has submitted a purchase order or a Purchase Notice
that has been accepted, and no adequate remedy is available under Section
8.01(a), API shall be entitled to receive from the Supplier the excess of (i)
the market price for such Products determined as of the time and place of such
breach over (ii) the price provided for herein for such Products, plus, (A) any
Other Damages incurred by API arising from or out of the Supplier's breach,
minus (B) any expenses saved in consequence of the Supplier's breach.

               (c) Breach Giving Rise to Termination. In the event that the
                   ---------------------------------
Supplier breaches or anticipatorily repudiates (in either event by reason of the
occurrence of the events entitling API to terminate this Agreement) its
obligations hereunder with respect to the supply of

                                       26

<PAGE>

the Guaranteed Quantities and no adequate remedy is available under Section
8.01(a) or (b) hereof, API shall be entitled to terminate the Agreement and
receive as damages from the Supplier an amount equal to the excess of (i) the
market price for such Products determined as of the time and place of such
breach over (ii) the price provided for herein for such Guaranteed Quantities,
plus (iii) any Other Damages incurred by API arising from or out of the
Supplier's breach, minus (iv) any expenses saved in consequences of the
Supplier's breach. In such calculation, the parties shall assume that the ratio
among the [*] Guaranteed Quantity, [*] Guaranteed Quantity and Equivalent
Guaranteed Quantity (and ratio of such Equivalents within the Equivalent
Guaranteed Quantity) continues to be the same during the remaining term hereof
as those reflected in the immediately preceding purchase notice given under
Section 2.02(b).

         (d) Nonconforming Products. The Supplier's sole liability or obligation
             ----------------------
in the event of a breach by the Supplier of the warranties set forth in Section
4.01 hereof shall be to replace within the period of time specified in Section
3.01(b)(2) hereof the non-conforming Products, plus any costs of inspection,
receipt, transportation and care and custody directly related to the inspection
and replacement of the non-conforming Products.

         (e) Additional Costs and Interest. In the event of any breach the
             -----------------------------
remedy for which is governed by this Agreement, API's damages shall also include
the costs of enforcing this Agreement (including fees and expenses of counsel)
and interest at the Prime Rate plus 2% from the date of breach.

   8.02. Remedies Non-Exclusive. Unless otherwise expressly provided in this
         ----------------------
Agreement, the remedies provided for herein in the event of a breach by the
Supplier shall be in addition to all other remedies available to API at law or
in equity, including, without limitation, remedies provided by the Uniform
Commercial Code as from time to time in effect in the State

                                       27

<PAGE>

of New York, and by the common and other statutory laws of the State of New
York. To that end, in a proper case, API's remedies may include, without
limitation, injunctive relief and replevin and API's Other Damages may include,
without limitation, incidental and consequential damages such as, for purposes
of illustration only, losses arising from lost sales or lost business
opportunities; it being further agreed that the Supplier reserves the right to
challenge API's entitlement to such damages as well as the amount thereof.
Except as otherwise expressly provided herein, the remedies provided to API by
law, equity or this Agreement shall be liberally administered to the end that if
API is injured by a breach hereof API shall be put in as good a position (but
not unjustly enriched) as it would have been in if the Supplier had fully
performed.

                                   ARTICLE IX

                                 CREDIT SUPPORT

         9.01.  Guarantees by MTC and YK. MTC and YK Irrevocably guarantee the
                ------------------------

due and timely performance by the Supplier of all of the Supplier's obligations
under this Agreement.

         9.02.  Letter of Credit. If, during the term hereof, the combined net
                ----------------
worth of API and its wholly owned subsidiaries shall be less than $100,000,000,
and if said condition shall continue for 90 consecutive days, then, in that
event, API shall (within 10 days after the end of said period) procure, from
First Chicago National Bank, or another national bank with assets in excess of
$500,000,000, an irrevocable standby letter of credit, in the principal amount
of $11,700,000, with respect to the due and timely performance of all of API's
obligations under this Agreement, in form and substance reasonably satisfactory
to the Purchaser.

                                       28

<PAGE>

                                    ARTICLE X

                                   TERMINATION

         10.01. Term. Unless earlier terminated pursuant to Section 10.02, this
                ----
Agreement shall continue to be in force until June 30, 2007, at which time it
shall terminate without notice. If this Agreement has not been earlier
terminated, the parties hereto shall consult with each other in good faith
during the three months prior to the scheduled termination regarding a possible
extension of this Agreement upon such terms and conditions as the parties may
then agree. The foregoing agreement of the parties to consult with each other in
good faith whether to extend this Agreement shall in no way constitute a binding
obligation on the part of any party to agree to an extension.

         10.02. Termination of the Supplier. Subject to Section 10.04, the
                ---------------------------
Supplier may terminate this Agreement by giving written notice to API, if any of
the following events, each of which shall constitute an anticipatory repudiation
of this Agreement, shall have occurred:

                (a)   API shall have informed the Supplier that API will no
longer purchase any of the Guaranteed Quantities or shall have taken any action
inconsistent with the substantial performance of API's obligations to do so;

                (b)   API shall have committed a Payment Breach that continues
for 90 consecutive days;

                (c)   API shall have commenced a voluntary case in bankruptcy
under the United States Bankruptcy Code or any similar federal, state or foreign
law for the relief of debtors (a "Bankruptcy Law");
                                  --------------

                (d)   API shall have consented by answer or otherwise to the
commencement against it of an involuntary case under any Bankruptcy Law;

                                       29

<PAGE>

                (e)   API shall have sought or consented to the appointment of a
receiver, trustee, liquidator or similar official (a "Receiver") of it or for
                                                      --------
all or substantially all of its property;

                (f)   API shall have made a general assignment for the benefit
of creditors; or

                (g)   a court of competent jurisdiction shall have (i) entered
an order or decree under any Bankruptcy Law that is for relief against API in an
insolvency case, (ii) appointed a Receiver of API or for all or substantially
all of its property, (iii) ordered the liquidation of all of its property or
(iv) ordered the liquidation of API, and the order or decree shall have remained
unstayed and in effect for 60 days or any dismissal or stay shall have ceased to
remain in effect.

         10.03. Termination by API. Subject to Section 10.04, API may terminate
                -----------------
this Agreement, by giving written notice to the Supplier, if any of the
following events, each of which shall constitute an anticipatory repudiation of
this Agreement, shall have occurred:

                (a)   the Supplier shall have informed API that the Supplier
will no longer satisfy its obligations hereunder to produce and supply any of
the Guaranteed Quantities hereunder or shall have taken any action inconsistent
with the substantial performance of the Supplier's obligations to do so;

                (b)   the Supplier shall have failed to deliver or cause to be
delivered Products for which API submitted proper purchase orders or Purchase
Notices which have been accepted for 60 consecutive days;

                (c)   the Supplier, MTC or YK shall have commenced a voluntary
case in bankruptcy under any Bankruptcy Law; (d) the Supplier, MTC or YK shall
have consented by answer or otherwise to the commencement against it of an
involuntary case under any Bankruptcy Law;

                (d)  the Supplier, MTC or YK shall have consented by answer or
otherwise to the commencement against it of an involuntary case under Bankruptcy
Law;

<PAGE>

                (e)   the Supplier, MTC or YK shall have sought or consented to
the appointment of a Receiver of it or for all or substantially all of its
property;

                (f)   the Supplier, MTC or YK shall have made a general
assignment for the benefit of creditors; or

                (g)   a court of competent jurisdiction shall have (i) entered
an order or decree under any Bankruptcy Law that is for relief against the
Supplier, MTC or YK in an insolvency case, (ii) appointed a Receiver of the
Supplier or for all or substantially all of its property, (iii) ordered the
liquidation of all of its property or (iv) ordered the liquidation of the
Supplier, and the order or decree shall have remain unstayed and in effect for
60 days or any dismissal or stay shall have ceased to remain in effect.

         10.04. Cure Period. In the event a notice of termination is delivered
                -----------
pursuant to Section 10.02(a) or (b) or Section 10.03(a) or (b), API or the
Supplier, as the case may be, shall have ten days from the receipt of such
notice to cure the breach giving rise to said notice by fully performing all
outstanding obligations hereunder, expressly affirming its intention to honor
this Agreement and offering adequate assurance of due performance, in which
event such notice of termination shall be null and void.

         10.05. Effect of Termination.
                ---------------------

                (a)   No Prejudice. The termination of this Agreement for any
                      ------------
reason whatsoever shall be without prejudice to the rights of any party against
any other party hereto that shall have accrued prior to such termination.

                (b)   Return of Information. Upon termination of this Agreement,
                      ---------------------
the parties shall promptly return to each other party all confidential
information that has been provided by such other party in connection with this
Agreement and any and all renewals or extensions

                                       31

<PAGE>

hereof, provided, however, that nothing herein shall require the return of any
        --------  -------
of the Assets (as defined in the Purchase Agreement).

                                   ARTICLE XI

                                  MISCELLANEOUS

         11.01. Arbitration. Any dispute, claim or action arising out of, in
                -----------
connection with or relating in any way to this Agreement shall be resolved
exclusively by arbitration in New York, New York conducted in English in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association; provided, however, that the parties shall be entitled to seek
injunctive relief in any court of competent jurisdiction. Any arbitration award
rendered hereunder shall be final and binding upon the parties and may be
enforced by any court of competent jurisdiction.

         11.02. Complete Agreement. This Agreement, the Purchase Agreement and
                ------------------
the exhibits and schedules attached hereto and thereto and the documents
referred to herein and therein, shall constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and thereof and
shall supersede all previous negotiations, commitments and writings with respect
t6 such subject matter.

         11.03. Waiver, Discharge, etc. This Agreement may not be released,
                ----------------------
discharged, abandoned, waived, changed or modified in any manner, except by an
instrument in writing signed on behalf of each of the parties hereto by their
duly authorized representatives. The failure of any party hereto to enforce at
any time any of the provisions of this Agreement shall in no way be construed to
be a waiver of any such provision, nor in any way be construed to affect the
validity of this Agreement or any part thereof or the right of any party
thereafter to enforce

                                       32

<PAGE>

each and every such provision. No waiver of any breach of this Agreement shall
be held to be a waiver of any other or subsequent breach.

         11.04. Notices. All notices, requests and demands to or upon the
                -------
respective parties hereto to be effective shall be in writing, including by
telecopy, telegraph or telex, and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) if delivered by hand
(including by courier), when delivered, (b) in the case of mail sent and to be
delivered within the United States, three business days after deposit in United
States first class mail, postage prepaid, (c) in the case of mail to be
delivered to a country other than the country of origin, seven business days
after deposit in first class air mail, postage prepaid, (d) in the case of
telecopy notice, when transmitted to the telecopy number specified below and
receipt has been confirmed by the transmitting telecopy operator, (e) in the
case of telegraphic notice, when delivered to the telegraph company or (f) in
the case of telex notice, when sent, answerback received. In each case notice
shall be sent to the address of the party to be notified, as follows, or to such
other address as may be hereafter designated by the appropriate party hereto in
accordance with these notice provisions:

         If to the Supplier, MTC or YK, to:

                  Mitsui Toatsu Chemicals, Inc.
                  2-5, Kasumigaseki 3-chome
                  Chiyoda-ku, Tokyo 100
                  Japan
                  Telecopy:  011-8133-592-4253
                  Attention: General Manager, Fine Chemicals Division

                                       33

<PAGE>

         and to:

                  Yamamoto Chemicals, Inc.
                  1-43 Yugecho Minami
                  Osaka 581
                  Japan
                  Telecopy:   011-81-729-49-5479
                  Attention:  President

         If to API, to:

                  Appleton Papers, Inc., Law Department
                  P.O. Box 359
                  Appleton, Wisconsin 54912-0359
                  Courier Deliveries:  1400 N. Rankin St:
                  Appleton, Wisconsin 54912-0359
                  Telecopy:   (920) 991-8852
                  Attention:  Paul J. Karch, Esq.

         11.05. Governing Law; Jurisdiction. This Agreement shall be governed by
                ---------------------------
and construed in accordance with the laws of the State of New York, without
regard to the applicable principles of conflicts of law. Each of the parties
hereto submits to the jurisdiction of, and consents to venue in, any Federal or
state court located in the State of New York in connection with any dispute,
claim, motion, suit or action arising out of or in connection with this
Agreement and, except for disputes, claims or actions subject to arbitration
under Section 11.01, each irrevocably waives any claim that any such court would
be an inconvenient or improper forum for the resolution of such dispute, claim,
motion, suit or action.

         11.06.   Successors.  This Agreement and all of the provisions hereof
                  ----------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto except with the prior written consent of the other parties or
by operation of law, except that, without the consent of API, the Supplier may
assign its rights and/or delegate its responsibilities to YK and/or MTC. Each of
API, the Supplier, MTC and YK

                                       34

<PAGE>

covenants and agrees that it will not sell, convey, assign or transfer, in one
transaction or a series of transactions, all or substantially all of its assets
unless the transferee expressly agrees to assume all of its obligations
hereunder and to be substituted for it herein and executes and delivers to the
others an assignment and assumption agreement in form and substance reasonably
satisfactory to the other parties hereto. Notwithstanding anything to the
contrary contained in this Agreement, it is understood and agreed that (a) MTC
anticipates merging with Mitsui Petrochemicals Industries, Ltd. ("MPC"), which
is expected to be the surviving corporation in such merger and to be renamed
"Mitsui Chemicals, Inc.", and (b) the surviving entity of any such merger shall,
as and if renamed and upon effectiveness of such merger, automatically be deemed
to have assumed the rights and obligations of MTC, and be substituted for MTC in
all respects, under this Agreement without any consent by MCI or any of the
other parties to this Agreement or any further action by MCI or any of the other
parties to this Agreement.

     11.07. Counterparts. This Agreement may be executed in two or more
            ------------
counterparts all of which shall be considered one and the same instrument and
each of which shall be deemed an original.

     11.08. Headings. The descriptive headings of the several Articles and
            --------
Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

     11.09. Third Parties. Except as specifically set forth or referred to
            -------------
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person or entity, other than the parties hereto and
their successors and permitted assigns, any rights or remedies under or by
reason of this Agreement.

     11.10. Rules of Construction. Unless the context otherwise requires, (a)
            ---------------------
each term defined in this Agreement has the meaning assigned to it, (b) each
accounting term not otherwise

                                       35

<PAGE>

defined in this Agreement has the meaning assigned to it in accordance with
generally accepted accounting principles, (c) "or" is disjunctive but not
necessarily exclusive, (d) words in the singular include the plural and in the
plural include the singular and (e) words such as "herein", "hereof", hereby",
"hereto", "hereunder" and words of similar import refer to this Agreement as a
whole and not to any particular Section or Subsection of this Agreement. Each of
the parties acknowledges that it has been advised by counsel of its choice in
the negotiation of this Agreement and accordingly each party agrees that no
provision of this Agreement shall be construed in favor of, or against, any of
the parties hereto by reason of the extent to which any such party or its
counsel participated in its drafting.

     11.11. Force Majeure. In the event of war, fire, explosion, flood,
            -------------
accident, strike, riot, act of governmental authority, act of God or other
contingency beyond the reasonable control of any party to this Agreement, to the
extent, if any, such event prevents or interrupts the performance hereunder of
such party, the performance hereunder of such party shall be temporarily
suspended for the period of the disability, without liability, provided that the
party unable to carry out its obligations hereunder (a) shall have, promptly
after it has actual knowledge of the beginning of any such delay, notified the
other party of such delay and of the reason therefor and (b) shall, following
the cessation of the event causing such delay, perform as promptly as
practicable all of its obligations that were temporarily suspended in addition
to, and not in substitution for, its ongoing obligations.

     11.12. Confidentiality.
            ---------------

            (a)  Supplier Confidential Information.  During the term of this
                 ---------------------------------
Agreement and thereafter, API shall hold in strict confidence and shall not
disclose to any third party, nor use for any purpose other than the performance
of this Agreement, any business or technical information

                                       36

<PAGE>

of a proprietary nature, including without limitation specifications, standards
and know-how, obtained from the Supplier, MTC or YK in connection with this
Agreement or the YK Agreement.

          (b)  API Confidential Information. During the term of this Agreement
               ----------------------------
and thereafter, the Supplier, MTC and YK shall hold in strict confidence and
shall not disclose to any third party, nor use for any purpose other than the
performance of this Agreement, any business or technical information of a
proprietary nature, including without limitation specifications, standards and
know-how obtained from API in connection with this Agreement but excluding the
Transferred Technology (the "API Confidential Information"), except to the
                             ----------------------------
extent necessary for the performance of this Agreement and only after obtaining
a written undertaking from such third party to maintain the confidentiality
thereof. The Supplier, MTC and YK shall not use any API Confidential Information
for any purpose other than performance of this Agreement.

          (c)  Agreement Terms. During the term of this Agreement and
               ---------------
thereafter, except as contemplated herein, API, the Supplier, MTC and YK shall
hold in strict confidence and shall not disclose to any third party any of the
terms or provisions of this Agreement.

          (d)  Exceptions. This Section 11.12 shall not apply to any business or
               ----------
technical information which (i) at the time of disclosure thereof to the
receiving party, is in the public domain or subsequently becomes part of the
public domain through no breach by the receiving party of its obligations
hereunder, or (ii) at the time of disclosure thereof to the receiving party is
in the possession of the receiving party, or is subsequently acquired by the
receiving party from a third party who is, at the time of disclosure thereof to
the receiving party, under no secrecy obligation to the other party hereto.

                                       37

<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first above written.

                                         APPLETON PAPERS INC.

                                         By:    /s/ Richard Curwen
                                         Name:  Richard Curwen
                                         Title: CEO and President

                                         ESCO COMPANY LIMITED PARTNERSHIP

                                         By: YAMAMOTO CHEMICALS AMERICA, INC.,
                                             General Partner

                                         By:    /s/ Yutaka Izawa
                                         Name:  Yutaka Izawa
                                         Title: President

                                         By: MTC AMERICA, INC., General Partner

                                         By:    /s/ Shigeru Aoki
                                         Name:  Shigeru Aoki
                                         Title: President

                                         YAMAMOTO CHEMICALS, INC.

                                         By:    /s/ Norio Kamijo
                                                Name:  Norio Kamijo
                                                Title: President

                                       38

<PAGE>

                                     MITSUI TOATSU CHEMICALS, INC.

                                     By: /s/ Hiroshi Ozawa
                                         Name:  Hiroshi Ozawa
                                         Title: Executive Director, Specialty
                                                Products Group

                                       39

<PAGE>

                                                                       Exhibit A
                                                                       ---------

                              GUARANTEED QUANTITIES
                         (See Sections 2.02 and 2.04(a))

                                                            Price
                                             --------------------------------
                              Pounds               [*]
     Contract Year        (000's omitted)        or [*]                [*]
     -------------         -------------         ------                ---
         Year 1                 [*]                [*]                 [*]
         Year 2                 [*]                [*]                 [*]
         Year 3                 [*]                [*]                 [*]
         Year 4                 [*]                [*]                 [*]
         Year 5                 [*]                 *                   *
         Year 6                 [*]                 *                   *
         Year 7                 [*]                 *                   *
         Year 8                 [*]                 *                   *
         Year 9                 [*]                 *                   *
        Year 10                 [*]                 *                   *

*To be determined pursuant to Section 2.04(a) of this Agreement.

                               Exhibit A - Pg. 1

<PAGE>

                                                                       Exhibit B
                                                                       ---------

                                LICENSE AGREEMENT
                                -----------------

     THIS AGREEMENT (this "Agreement") made as of the ____ day of _____________,
among ___________________, a _____________ partnership ("Licensor"),
                                                         --------
___________________________, a __________________ corporation ("Licensee"), and
                                                                --------
APPLETON PAPERS INC., a Delaware corporation ("API").
                                               ---
                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, Licensor is the owner of certain patents relating to black
colorforming chromogens which are set forth on Schedule I hereto (the
"Patents");
 -------

     NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein and in the Supply Agreement among Licensor, API and
others dated as of December ____, 1997 (the "Supply Agreement"), the parties
                                             ----------------
hereby agree as follows:

     1.   Certain Definitions. As used herein, the following terms shall have
          -------------------
the following definitions:

     "API's Use" shall mean the use of API and its wholly owned subsidiaries
      ---------
which have their headquarters in North America and are or shall be engaged in
production of paper products.

     "Licensed Amount" shall mean _________________________.
      ---------------

     "Licensed Products" shall mean ________________________.
      -----------------

     "Licensed Territory" shall mean _________________________.
      ------------------

     "Term" shall mean from ________________ to __________________.
      ----

     2.   Grant of License. Licensor grants to Licensee and Licensee accepts
          ----------------
from Licensor, on the terms and conditions hereinafter stated, a nonassignable,
nonexclusive, royalty-free right and license under the Patents to manufacture
during the Term the Licensed Products in the Licensed Territory solely for the
sale of the Licensed Amount of the Licensed Products to API for API's Use to
make carbonless transfer or thermal paper. Licensee acknowledges that the
license granted herein does not extend to any proprietary know-how or technology
of the Licensor.*

     3.   Royalties. Licensor's sole consideration for this license shall be the
          ---------
benefit resulting from fulfillment by Licensee of certain obligations owed by
Licensor to API pursuant to the Supply Agreement.

_____________
* To be conformed to Section 3.02 of the Supply Agreement for any license
granted to Hilton-Davis Company.

                               Exhibit B - Pg. 1

<PAGE>

         4. Records. Licensee agrees that throughout the Term and for one year
            -------
thereafter, Licensee shall keep complete and accurate records in sufficient
detail to show the volume of manufacture and disposition of Licensed Products,
including the price and other terms on which the Licensed Products are sold to
API. Licensee further agrees that during the Term and the one-year period
thereafter, representatives of an independent accounting firm retained by
Licensor (which may be Ernst & Young) shall, upon reasonable advance notice,
have reasonable access during reasonable business hours to, and the right from
time to time to inspect, copy and make extracts from Licensee's records to the
extent reasonably necessary for the sole purpose of determining whether Licensee
is in compliance with the terms of this Agreement. Such accounting firm shall be
obligated to maintain the confidentiality of Licensee's records and facilities
and not to disclose any thereof or any information relating thereto, including
to Licensor, other than in connection with the enforcement of this Agreement.

         5. Product Markings. Licensee shall mark all Licensed Products sold by
            ----------------
Licensee under this Agreement or packages containing such Licensed Products with
the number of any Patent that is applicable thereto and under which Licensee is
hereby licensed.

         6. Infringement: Use or Disclosure of Licensed Technology. In the event
            ------------------------------------------------------
that any infringement of any of the Patents by or to any third party comes to
the attention of Licensee, Licensee shall promptly notify Licensor of such
infringement, use or disclosure. Thereupon, Licensor in its sole discretion
shall decide what means, if any, shall be employed to eliminate the infringement
of the Patents.

         7. Default.
            -------

            (a) If Licensee uses the license granted hereunder in any way other
         than as provided in Section 2 hereof, then Licensor may, at its option,
         terminate this Agreement forthwith. If this Agreement is terminated
         pursuant to this clause (a), Licensor shall thereafter give prompt
         notice to API of such termination.

            (b) If Licensee fails to keep records or to give access thereto to
         Licensor under the terms hereof for a period of ten days following
         notice from Licensor of such failure, or fails to remedy any other
         violation of this Agreement within ten days of receipt of written
         notice from Licensor of such failure, then Licensor may, at its option,
         terminate this Agreement forthwith. If this Agreement is terminated
         pursuant to this clause (b), Licensor shall thereafter give prompt
         notice to API of such termination.

            (c) If Licensee shall be adjudged bankrupt or become insolvent or
         make an assignment for the benefit of creditors, or be placed in the
         hands of a receiver or trustee in bankruptcy, or if proceedings in
         voluntary or involuntary bankruptcy be instituted on behalf of or
         against Licensee, then Licensor may forthwith terminate this Agreement
         on written notice to Licensee. Licensor shall provide a copy of a
         notice of termination under this clause (c) to API.

                                       2

<PAGE>

         8.  Indemnity; Disclaimers.
             ----------------------

             (a) Nothing in this Agreement shall be construed as (i) a
         representation or warranty by Licensor that the invention of the
         Patents or the manufacture, use or sale or other disposition of
         Licensed Products does not or will not infringe on the patents or other
         property rights of any third party or an assumption of any
         responsibility or liability by Licensor for any such infringement by
         Licensee, (ii) a representation or warranty by Licensor that any
         particular level of technical or commercial results can be obtained by
         the invention of the Patents or (iii) any other representation or
         warranty other than as expressly provided herein.

             (b) Licensee shall indemnify and hold harmless Licensor and its
         agents and employees, from and against any and all claims, actions,
         damages, liabilities, losses, costs and expenses (including fees and
         expenses of counsel) incurred by reason of any claim of third parties
         (including employees of Licensee) arising, directly or indirectly, out
         of the use of the Patents or out of the manufacture, use, sale or other
         disposition of Licensed Products.

         9.  Complete Agreement. This Agreement shall constitute the entire
             ------------------
agreement between Licensor and Licensee with respect to the subject matter
hereof.

         10. Waiver Discharge, etc. This Agreement may not be waived, amended,
             ---------------------
discharged, abandoned, changed or modified in any manner, except by an
instrument in writing signed on behalf of each of the parties hereto by their
duly authorized representative; provided, however, that for purposes of this
                                --------  -------
paragraph, no attorney-in-fact or person acting under a power of attorney shall
be deemed an authorized representative of Licensor.** The failure of any party
hereto to enforce at any time any of the provisions of this Agreement shall in
no way be considered to be a waiver of any such provision, nor in any way be
construed to affect the validity of this Agreement or any part thereof or the
right of any party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to be a waiver of any other
or subsequent breach.

         11. Notices. All notices, requests and demands to or upon the
             -------
respective parties hereto to be effective shall be in writing, including by
telecopy, telegraph or telex, and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) if delivered by hand
(including by courier), when delivered, (b) in the case of mail sent and to be
delivered within the United States, three business days after deposit in the
United States first class mail, postage prepaid, (c) in the case of mail to be
delivered to a country other than the country of origin, seven business days
after deposit in first class air mail, postage prepaid, (d) in the case of
telecopy notice, when transmitted to the telecopy number specified below and
receipt has been confirmed by the transmitting telecopy operator, (e) in the
case of telegraphic notice, when delivered to the telegraph company or (f) in
the case of telex notice, when sent, answerback received. In each case notice
shall be sent to the address of the party to be notified,

____________________
** Sentence to be included only if API executes the Agreement for Licensor under
a power of attorney.

                                       3

<PAGE>

as follows, or to such other address as may be hereafter designated by the
appropriate party hereto in accordance with these notice provisions:

                  If to Licensor, to:

                           _______________________________
                           _______________________________
                           _______________________________
                           Telecopy:
                           Attention:

                  If to Licensee, to:

                           _______________________________
                           _______________________________
                           _______________________________
                           Telecopy:
                           Attention:

                  If to API, to:

                           _______________________________
                           _______________________________
                           _______________________________
                           Telecopy:
                           Attention:

         12. Governing Law: Jurisdiction. This Agreement shall be governed by
             ---------------------------
the laws of the State of New York, without regard to the applicable principles
of conflicts of law. Licensee hereby submits to the non-exclusive jurisdiction
of, and consents to venue in, any Federal or state court located in the State of
New York in connection with any dispute, claim, motion, suit or action arising
out of or in connection with this Agreement and irrevocably waives any claim
that any such court would be an inconvenient forum for the resolution of such
dispute, claim, motion, suit or action.

         13. Severability. If any provision of this Agreement or the application
             ------------
of any such provision to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.

         14. Successors and Assigns. This Agreement shall be binding on and
             ----------------------
inure to the benefit or the parties hereto and the successors or permitted
assigns of the parties hereto; provided, however, that Licensee may not
                               --------  -------
sublicense or assign this Agreement, in whole or in part, without the prior
written consent of Licensor and any purported assignment without such consent
(which may be withheld without reason) shall be void and shall entitle Licensor
to terminate this Agreement forthwith. Licensor may assign this Agreement, in
whole or in part.

                                       4

<PAGE>

         15. Counterparts. This Agreement may be executed in two or more
             ------------
counterparts all of which shall be considered one and the same instrument and
each of which shall be deemed an original.

         16. No Third Party Beneficiaries. It is hereby agreed that the parties
             ----------------------------
hereto, their successors and permitted assigns shall have the sole right to
enforce the performance of the provisions of this Agreement, and that no other
person shall be entitled to, or shall have any claim, right, title or interest
to or in any such amounts by virtue of this Agreement.

         17. Specific Performance. Licensee acknowledges and agrees that any
             --------------------
material violation by it of its obligations hereunder will cause irreparable
injury for which adequate remedy at law is not available and that any violation
of any obligation under paragraph 2 of this Agreement shall constitute a
material violation of Licensee's obligations for purposes hereof. Accordingly,
Licensee agrees that its obligations hereunder shall be enforceable by an order
for specific performance or restraining the breach thereof from any court of
competent jurisdiction, in addition to any other remedies that Licensor may
have.

         18. Jury Waiver. LICENSEE HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
             -----------
HAVE TO TRIAL BY JURY OF ANY SUIT, ACTION PROCEEDING, CLAIM, DEFENSE, OR
COUNTERCLAIM ARISING BETWEEN LICENSEE AND LICENSOR HEREUNDER Ox IN CONNECTION
WITH OR RELATING IN ANY WAY TO THIS AGREEMENT.

         19. Costs of Enforcement. Licensee shall reimburse Licensor for the
             --------------------
costs, including reasonable attorneys' fees and disbursements, of enforcing
Licensor's rights under this Agreement.

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized representatives as of the day
and year first above written.

                                       [LICENSOR]

Attest:

____________________________________   By:______________________________________

                                       [LICENSEE]

Attest:

____________________________________   By:______________________________________

                                       APPLETON PAPERS INC.

Attest:

____________________________________   By:______________________________________

                                       5

<PAGE>

                                                                       Exhibit C
                                                                       ---------

                                       [*]

<PAGE>

                                                                       Exhibit D
                                                                       ---------

                                POWER OF ATTORNEY
                                -----------------

         _________________________ (the "Supplier") hereby appoints Appleton
Papers Inc. ("API") and its representatives as Supplier's lawful
attorney-in-fact to execute and deliver a license agreement pertaining to the
manufacture and sale of Black Colorforming Chromogens (substantially as in the
form attached), and not for any other purpose (including without limitation,
amending or modifying a license agreement).

         This power of attorney is coupled with an interest and is irrevocable
for the term of that certain Supply Agreement between Supplier and API, dated as
of December ____, 1997 and any extension thereof.

                                  ESCO COMPANY LIMITED PARTNERSHIP

                                  By:   YAMAMOTO CHEMICALS
                                        AMERICA, INC., General Partner

                                  By:   ________________________________________
                                  Title:

                                  By:   MTC AMERICA, INC., General Partner

                                  By  : ________________________________________
                                  Title:

                                        2

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